Estimation of net benefit from the proposed ban la hydropower project in nghe an province vietnam

ESTIMATION OF NET BENEFIT FROM THE PROPOSED BAN LA HYDROPOWER PROJECT IN NGHE AN PROVINCE, VIET NAM NGUYEN THI HOANG HOA A thesis submitted in fulfillment of therequirements forthe degreeofMaster of EnvironmentalManagementinDevelopmentp l a n n i n g FacultyofSocialSciences UNIVERSITI MALAYSIASARAWAK2005 ACKNOWLEDGEMENTS Firstly, I would like to thank DANIDA funded WaterSPS Subcomponent 1.3 support to Capacity Building at the Hanoi Water resources University (HWRU), Vietnam for the sponsorship of my study I wish to express my appreciation and gratitude to those who had helped and supported me in the project that leads to this dissertation I wish to thank my major supervisor, Assoc Prof Dr Gabriel Tonga Noweg, for his guidance throughout my study at Unimas From him and his guidance, I have gained much knowledge and experiences, which I will pass on in my own future I alsowishto thank allmylecturers inUnimas fortheir assistanceandadvice Iwouldalso like tothankMr Robert Malongforhis help duringmyMasterCourse I am also grateful tomyco-supervisorDrNgoThi Thanh Van(HWRU) forher kindandvaluableassistanceduringmydata collection inVietnam.I am indebted to all the officers intheDANIDAand HWRU Board, Power Engineering ConsultingCompanyNo (PECC1), districts officials ofNgheAn province,Instituteof Waterresourcesplanning (IWRP) and Aquatic Product Research Institute, DoLuongweirmanager,Nam Dan sluicemanager,Department of Agriculture and ruraldevelopmentofNgheAn province,NationalCentralMeteo-HydrologyForecast (NCMHF),andlocal peoplein the ten districts ofNgheAn province Thankyouforyourfriendlyand warmassistance duringmyfieldtrip My special thanks go tomyhusbandand my children,wholovemeenough to letmegoandstudy abroad Thanksfortheir endlesssupportandencouragementduring thecoursework andcompletion of thisdissertation TABLE OF CONTENT Acknowledgment Table of content List of tables List of figures Abbreviation Abstract Abstrak ii iii vi viii ix xi xii C HAPTERI I NTRODUCTION 1 conomyofVietNam emandofenergyinVietNam E owerdevelopmentplan(2003-2020) T 0T 0T 0T T T T 0T T 0T T 0T 1 0T D T P GeneralfloodcontrolinVietNam Irrigation 6 0T T T T 0T 0T T roblemstatement 0T 0T P Objective Significanceofstudy 0 T T T 0T 0T .7 C L HAPTERII ITERATUREREVIEW Introduction 2 Approachinsustainabilitydevelopmentofreservoirformultipleuses Cost-benefitanalysis(CBA) Introduction 11 3.2 CostBenefitAnalysis(CBA)ofdams 3.1 Environmentalcost-benefit 15 3.2.2 Socialimpactmitigationcost 3.2.1 3.2.3 loodcontrolcosts-benefits T T 0T 0T T 0T 0T 0T T T 0T 0T T T T 12 0T 0T 0T 0T F 3.2.4 Irri T 17 21 T 0T T C M HAPTERIII ATERIALSANDMETHODS 11 0T T 0 9 gationcostsandbenefits T0 T T 0T 0T 26 26 24 Introduction 26 Studyarea T T 0T 0T 2.1 Location 2.2 opography eology T limate 2.3 ainfall emperature G 2.4 0 T T0 T 0T 0T 0T T T 0T T 0T 0T 0T 0T 0T 27 27 29 29 30 30 30 T 0T C 2.5 T R 2.6 0T T 0T T H umidity 2.8 iverflow 0 T T 0T 0T 31 0T T 0T 0T R L anduse 2.10 oilclassificationandsoilerosion eople S 2.11 31 T 0T 0T 0T 31 0T T 0T 0T 0T 0T 32 33 T 0T P 2.12 I rrigation 2.13 loodoccurance 0 T T T0 T 0T 0T F T T0 0T 34 34 3 Conceptualframeworks 37 Privatecostsandbenefits 3.2 Publiccostsandbenefits T 35 T0 0T 0T 0T T 38 3.1 Datacollection Primarydatacollection 39 4.2 Secondarydatacollection T 0T T 0T 4.1 39 T0 0T 39 Contingentvaluation 40 Floodcontrolcostestimate T T 0T 40 0T 41 Calculationprinciplesforfloodcontrolcost 6.2 Linkbetweendamagecostandreturnperiod 6.3 Costoftheenergyloss T T T 0T 0T 0T 42 42 6.1 Dataanalysis T C R HAPTERIV ESULTSANDDISCUSSION Int rivatecostsbenefits 43 T0 T 0T 44 44 roduction 44 0T 0 T 0T T T 0T 0T P 2.1 C 2.2 44 T 0T 0T T onstructioncosts perationandMaintenanceCosts 0T 0T 44 45 T 0T O 2.3 Resettlementcost 2.4 lectricbenefit T 0T 0T 0T T0 0T E Publiccostsandbenefits 3.1 Floodcontrolcostsandbenefits Floodcontrolcosts 47 3.1.2 Floodcontrolbenefits 0 0T 0T 45 45 T T 46 46 T0 T T T T 0T 48 0T 3.1.1 3.2 Irrigationcostsandbenefits Irrigationbenefits 52 3.2.2 Irrigationcosts 0T T 52 T0 0T 0T 58 0T 3.2.1 4 0T nvironmentalandsocialcostsandbenefits 0T 0T E 4.1 59 T 0T E 0T nvironmentalcost 0T 59 T 4 4 4 0T T T T 0T T Lossofpotentialtimberproduction 59 4.1.2 Lossofland 4.1.3 Lossofexistingagriculturalproduction 4.1.4 Carbonsequestration 4.1.5 Lossofbiodiversity 4.1.6 Lossofexistingfishingincome 4.1.7 Lossofexistinghuntingincome 4.1.8 Lossofrevenueofexistingcollectionofforestproduct 4.1.9 DisruptionofexistingRivertransportation 4 E nvironmentalbenefits 4.2.1 Merchantabletimber 4.2 F isheriesinCaRiver 4.2.3 otentialfortourism ransportation P 4.2.4 0T 4.1.1 T T T 0T 60 61 61 62 62 62 62 62 63 0T 0T 0T 0T 0T 0T 0T T 0T 0T 0T 0 T T T 0T 0T 63 64 0T T T 0T 64 65 0T 0T T 0T T 4.2 E mploymentopportunitiesforlocalpeople 4.2.6 oadaccess 0 T T 0T 0T 66 0T T 0T R ostbenefitanalysisoftheproject T 0T 0T 67 T C Economicevaluationparameters 5.3 Sensitivityanalysis 0T 67 T 0 T T 0T 69 0T 70 5.2 C HAPTERV T T0 73 C ONCLUSIONSANDRECOMMENDATIONS Conclusion ecommendation T T0 0T 0T T 0T 0T R T R EFERENCES T 73 73 75 T0 75 A S PPENDIXA OILMAP,SOILEROSIONPOTENTAILMAPANDLANDUSEMAP 80 80 A H PPENDIXB YDROLOGICALDATA 84 84 T T 0T 0T 0T T 0T 0T A S PPENDIXC URVEYQUESTIONNAIRES T T 0T 0T A PPENDIXD C ONTINGENTVALUATIONFORENVIRONMENTAL P ARAMETERS T T T 0T A C PPENDIXE OST-BENEFITANALYSIS 0T 0T 98 98 105 105 105 T 0T 0T 0T A P PPENDIXF ICTURESOFTHESTUDYAREADURINGTHEFIELDTRIP 109 109 0T T 0T 0T 134 134 LIST OF TABLES Page Table 1.1 GDP growth, GDP per capita and Population of Viet Nam from 1995 to 2003…………………………………………….…… Table 1.2 The power generation capacities by energy sources………… Table 2.1 Benefit of flood control of Klang river basin flood mitigation project ………………………………………………………….…… Table 2.2 26 Key dimensions and key impacts of access to good irrigation water ………………………………………………………….…… 29 Table 3.1 Land use in Ban La catchment and reservoir area………… 36 Table 3.2 Soil types of Ban La catchment area………………………… 37 Table 3.3 Potential erosion in Ban La catchment area………………… 37 Table 3.4 Data need and data collection method………………………… 45 Table 4.1 Construction cost of Ban La dam……………………………… 51 Table 4.2 Initial investment costs, annual operation and maintenance cost in percentage and value …………………………………… 51 Table 4.3 Basic data of Ban La hydropower project …………………… 54 Table 4.4 Damage cost of historical flood events ………………………… 57 Table 4.5 Flood damage Vs return period ………………………………… 57 Table 4.6 Flood routing by Ban La reservoir …………………………… 59 Table 4.7 Irrigated area and discharge of Do Luong system from Ca river ………………………………………………………………… Table 4.8 Irrigated area and discharge of pumping stations direct from Ca river in the NNAIS …………………………………… Table 4.9 60 Irrigated area and discharge of Nam Dan system from Ca river………………………………………………………………… Table 4.10 60 61 Irrigated area and discharge of pumping stations direct from Ca river in the SNAIS……………………………………… 61 Table 4.11 Irrigated failure in the future without Ban La project……… 63 Table 4.12 Irrigated failure in thefutureafter completed Ban Laproject ……………………………………………………………… 64 Table 4.13 Effective irrigated area………………………………………… 64 Table 4.14 Annual benefit from irrigation in the area 66 LIST OF TABLES (CONTINUE) Table 4.15 Forested area permanently flooded after creation ban La reservoir……………………………………………………… 67 Table 4.16 Estimation of timber loss in the reservoir area 68 Table 4.17 Estimation of land loss by Ban La project (current value)………………………………………………………………… 69 Table 4.18 Estimation of annual agricultural production loss ………… 69 Table 4.19 Average standing volume (or stock) of the forest …………… 72 Table 4.20 Estimation of timber can be harvest in the reservoir area 72 Table 4.21 Merchantable of timber in the reservoir area ……………… 72 Table 4.22 The water level along Ca river before and after construction Ban La project …………………………………………………… 75 Table 4.23 Construction period criteria …………………………………… 77 Table 4.24 Cost disbursement for Ban La hydropower project ………… 78 Table 4.25 Basic data for economic assessment of Ban La hydropower project (FSL= 200m; P = 320 MW; years construction time and 10% discount rate …………………………………… Table 4.26 Result of cost benefit analysis of Ban La hydropower project discount rate = 10% ………………………………………… Table 4.27 79 80 Results of sensitivity analysis with changes in discount rate, output and lifespan of the project 82 LIST OF FIGURES Figure 3.1 Figure 3.2 Figure 4.1 Location of the study area …………………………………… Total cost and total benefits ………………………………… Hydraulic network scheme …………………………………… Page 32 42 62