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    Asian hydro woes offer opportunities for LNG [LNG Condensed]

Summary

Asian countries have long depended on hydropower as a mainstay of their electricity systems, but the rate of expansion is stalling with key targets missed or reduced. Existing hydro plants are also struggling to maintain output and construction costs are rising. LNG will not be the only beneficiary of reduced hydro generation, but with Asian countries entering the LNG market or expanding import capacity, gas looks well place to pick up the slack.

by: Martin Daniel

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Complimentary, LNG Condensed, Liquefied Natural Gas (LNG)

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Asian hydro woes offer opportunities for LNG [LNG Condensed]

Hydropower has been central to the development of the electricity sector throughout Asia, producing the great majority of grid power prior to the arrival of fossil fuels and nuclear. Large hydro dams were symbols of national pride -- long-lived projects offering low-cost indigenous energy and often forming part of multi-purpose projects with potable water, irrigation or flood control components. Hydro was universally regarded as a good thing.

However, while hydro is still a main source of generation in many Asian countries and a significant contributor in others, it is no longer viewed as unambiguously good. It now appears certain that less new capacity will be built than had been planned until recently, while output from many existing plants looks set to fall. In many cases LNG could be the beneficiary.

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Less predictable output

Output from many Asian hydropower projects is declining, in some cases because lower rainfall is causing reduced water flows to dams or through run-of-river projects. Output is also becoming more volatile as annual patterns of precipitation become less predictable.

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