The deluge came from a burst giant metal pipe supposed to channel water from a reservoir higher up to an electricity-generation station in the village. After that incident in 2010, Mr Phau was moved to higher ground and given $3,000 by the Vietnamese firm responsible for the hydroelectric project. Yet the soil is poorer, and he can no longer grow enough rice to sell. He finds himself $300 worse off each year.

Hydropower has boomed in Vietnam over the past decade and now generates more than a third of the country’s electricity. In 2013 the National Assembly reported that 268 hydropower projects were up and running, with a further 205 projects expected to be generating by 2017. They are helping to meet a national demand for energy that the authorities forecast will treble between 2010 and 2020. Other power sources are less promising, at least in the short run. A plan to build several nuclear reactors by 2030 is behind schedule, for example. And Vietnam’s coal reserves, mostly in the north, are not easy to get at.

Yet the hydropower boom comes at a price. Rivers and old-growth forests have been ravaged, and tens of thousands of villagers, often from ethnic minorities, displaced. Many have been resettled on poor ground. Those who have stayed are at risk of flash floods caused by faulty dam technology and inadequate oversight. Green Innovation and Development Centre, an environmental group in the capital, Hanoi, says shoddy dam construction is the norm, and developers ignore the question of whether their projects could trigger earthquakes.

Some improvements are at hand. A national tax on power generation, established in 2010, requires hydropower companies to pay farmers to protect forests within water catchments. In recent months the government has scrapped or scaled back plans for future dams while drafting regulations that tighten oversight of existing ones. Vu Xuan Nguyet Hong at the planning ministry says that officials are much more sensitive to the environmental and social impacts of hydropower than they were even a year ago. And a campaign by the prime minister, Nguyen Tan Dung, to part-privatise more than 400 state-owned enterprises by late 2015 could help attract badly needed foreign capital and expertise in the energy sector.

Yet reformists like Ms Hong face an uphill battle. Mr Dung’s privatisation plan is going too slowly. Meanwhile, the energy sector is hobbled by the government’s fuel and electricity subsidies to consumers. Many hydro-electric companies are owned by or affiliated with Electricity Vietnam (EVN), the loss-making state power monopoly. Because hydropower is Vietnam’s cheapest source of electricity, EVN resists investing in measures such as dam-safety assessments that would further erode its financial position. As it is, even though environmental-impact assessments for hydropower projects are required, they are never published, according to the United Nations Development Programme.

One problem when officials have vested interests in hydro-electric projects is that they place generation capacity over the need to manage water for the benefit and safety of locals. Hydropower companies want to keep their mountain reservoirs as full as possible in order to generate as much electricity as Vietnam’s rivers allow. But that narrow focus can deprive farmers of irrigation in the dry season. And when heavy rains come in the summer and autumn, floodwaters cascade over the dam walls with little or no warning. When a dam broke in August in the south-central province of Gia Lai, a villager told Thanh Nien, a newspaper, that the noise and the panic made it feel like a bombing raid from the war.

The Economist - January 10, 2015