The review confirmed the technical, environmental, social and financial studies that the proposed dam and reservoir at full water supply level of 538 masl as proposed by NTEC was clearly the most favourable configuration.
The Study of Alternatives confirmed that the Project would represent a significant economic benefit to the Lao PDR and that the environmental and social costs of the Project were minimal. Indeed, one of the most striking findings of the Study of Alternatives was its finding of the benefits accruing to the global community due to the avoided emissions of CO2, the most important contributor to the “Greenhouse Effect”. At the time of the report, the estimated net present value of the savings from reduced CO2 emissions were estimated at USD 270 million. This was on the basis of a 680 MW plant. Given the increased size of the Project, allied to the post-Kyoto concept of the trading of CO2 allowances between countries, the value of this saving would now be considerably greater.
The report found that without the Project, it would be impossible for the GOL to honour its commitment to the Government of Thailand to provide the agreed generating capacity. At a national level, the GOL would be unable to take the appropriate measures to reduce poverty without the benefits of the revenues and taxes generated by the sale of electricity by the Project.
Without the Project, the only other possible alternative for the GOL to earn foreign exchange revenues would be through the further exploitation of the natural forests through logging. It is probable that under such circumstances, the Project area would suffer severe environmental degradation and decline in value to a point where the existing high biological diversity of the Nakai-Nam Theun NBCA would be severely compromised.
The Study of Alternatives concluded that, in respect of the five questions posed to assess the viability of the Project

   * even with sluggish growth of the Thai economy, the forecast growth in electricity consumption in Thailand would be sufficient to accommodate the 3,000 MW
      of power exports from Lao PDR;
   * the Project could compete on a pure cost basis with gas-fired combined cycle and coal generators in Thailand;
   * after review of all technical, environmental, social, financial and economic criteria the Project ranked second only to the Theun Hinboun run-of-river
      hydroelectric power scheme (which was then already under construction);
  * of the large number of alternative configurations investigated, the most attractive of the configurations then proposed was that proposed by the with a dam
      Sponsors, at Nakai, a full supply level of 538 masl, diversion into the Xe Bang Fai and 680 MW of installed capacity; and
   * the Project be recommended as one of the Projects to meet the Lao PDR’s 3,000 MW export commitment to Thailand.

5 Anticipated Project Impacts
The 450 km2 reservoir will, at full capacity, inundate approximately 40% of the Nakai Plateau. The area to be flooded has been severely environmentally degraded over the past decades and has been stated by internationally recognised environmental experts to be of limited environmental value. The remainder of the catchment area is mostly covered with pristine primary forest and comprises part of the Nakai-Nam Theun NBCA.
The reservoir will require the resettlement of approximately 1200 families in seventeen village community groups to other nearby areas on the Nakai Plateau. These sites have been selected through an extensive consultation process involving the affected people and other key stakeholders.
The reservoir will require the resettlement of approximately 1200 families in seventeen village community groups to other nearby areas on the Nakai Plateau. These sites have been selected through an extensive consultation process involving the affected people and other key stakeholders.
The Project will also directly affect local communities living on the Nam Theun River downstream of the dam and the Nam Kathang and Xe Bang Fai rivers downstream of the power station, although such impacts will vary from slight to moderate significance with the loss of land, fishery losses and possible changes in livelihood patterns.
Other impacts include changes to hydrology in both the source and receiving river systems as the Project will result in reduced flows in the Nam Theun River and increased flows in the Xe Bang Fai and Nam Kathang river systems. Hydrological impacts will be managed by adopting suitable operational measures including maintaining a minimum average weekly riparian release in the Nam Theun River. Operational guidelines have been developed to ensure that generation at the Project will cease when waters in the Xe Bang Fai approach a predetermined level. This is to ensure that the impact of flooding on these downstream communities will be unaffected by the development of the Project.
The Project has been designed such that the structures and associated plant will include provision for aeration of the released flows. The intake for the mini hydro and energy dissipating valve at the Nakai Dam will also have variable levels so as to only take upper level water.
The Downstream Channel will include an aerating weir at the end of the lined section of the channel. Water quality monitoring of the reservoir water and releases to the Nam Theun, Nam Kathang, Downstream Channel and Xe Bang Fai river systems will be performed to check the ongoing effectiveness of the aeration processes.