The Lao People’s Democratic Republic is taking key steps to harness its hydropower potential in a bid to become the “Battery of Southeast Asia”. The country has a hydropower potential of about 26 GW, of which one-third has been utilised so far but several projects are under planning/construction to increase hydro generation which would mainly be exported to the neighouring countries of Thailand, Vietnam, Cambodia and China. According to the International Hydropower Association, Laos added 1.89 GW of hydro capacity in 2019 – the third highest globally after China and Brazil. This was contributed by the commissioning of the 1,295 MW Xayaburi hydroelectric project (HEP), 272 MW Nam Ngeip1 HEP, and 260 MW Don Sahong HEP. Going forward, the Laos government plans to continue promoting sustainable hydropower with the aim of increasing energy exports as well as reducing electricity prices. Here is an overview of the country’s hydropower plans and progress, cross-border transmission interconnections and power trade opportunities…

Current status

As of end 2019, Laos had an installed power generation capacity of nearly 9,972 MW, of which over 80 per cent or 8,019 MW was contributed by hydropower. Coal-based power accounted for 19 per cent share (1,878 MW) while the rest was accounted for by biomass and solar (75 MW). The total electricity generation during the year stood at 52,211 GWh, of which about 47 per cent (or 24,399 GWh) was exported.

The total energy consumption in Laos stood at 6,596 GWh in 2019 of which the maximum (3,099 GWh) was consumed by the industry sector which accounted for 47 per cent of the total demand.  The residential sector followed next with 32 per cent (or 2135.8 GWh) share in total consumption, followed by the services sector (15 per cent), agricultural sector (1 per cent) and others (5 per cent).

Power trade

Laos has nearly 33 cross-border electricity interconnections at varying voltage levels (22/35 kV to 500 kV) with Thailand, Cambodia, Vietnam, China and Myanmar. The country trades about 4.5 GW of power presently which is set to grow to 14-15 GW in the near future. It is planning to develop a 500 kV backbone transmission line project to meet this target.

Power trade with Thailand: Thailand is Laos’s largest power trade partner as the latter exports about 4,260 MW of power to the former. This is set to grow to 9,000 GW in the coming years. The two countries have signed multiple MoUs in 1993, 1996 and 2016 to enhance power trade between them. Currently, power is supplied to Thailand from six projects – the 220 MW Theun Hinboun HEP, 149 MW Houay Ho HEP, 1,000 MW Nam Thuen 2 HEP, 615 MW Nam Ngum HEP, 220 MW Theun Hinboun Expansion HEP and the 1,778 MW Hongsa lignite power plant. New projects have recently been commissioned including the 272 MW Nam Ngeip 1, 390 MW Xepien-Xenamnoy and 1,260 MW Mekong Sayabury projects to further increase power export to Thailand. Another project, the 600 MW Nam Thuen 1 is under construction from which nearly 520 MW will be supplied to Thailand.

Power trade with Vietnam: The Laotian and Vietnamese governments have MoUs in place to continuously enhance cooperation in hydropower development. Laos currently exports 250 MW to Vietnam and imports 18 MW (mainly to provide electricity to border towns). However, agreements are in place between the countries to increase power export to 1,000 MW by 2021 via the existing 220 kV line in the southern region. By 2025, power export is likely to reach 3,000 MW via a planned 220 kV interconnector between the two countries and in the long term (up to 2030) the export quantum will be enhanced to 5,000 MW via a proposed 500 kV transmission line which is currently under study.

Power trade with Cambodia: Laos signed an agreement on cooperation in hydro power sector with Cambodia in 1999 to trade up to 300 MW of power. Presently, only about 10 MW is being exported via a 115 kV transmission link. By 2021, Électricité du Laos plans to export 200 MW of power to Electricity du Cambodge via a 500 kV cross-border interconnection (which will be initially energised at 230 kV).

Power trade with China and Myanmar: Currently, Laos is importing about 60 MW of power from Yunnan province in China though a 115 kV cross-border link. The two countries plan to exchange 1,000-3,000 MW of power in the coming years.  Meanwhile, with Myanmar, only up to 10 MW is being exported but the MoU is in place to export 300-500 MW of power.

Multilateral power trade with Malaysia: In September 2019, Thailand, Laos and Malaysia decided to extend the Laos-Thailand-Malaysia Power Integration Project (LTM-PIP). The first phase of the LTM-PIP, seen as a milestone to enhance multilateral electricity trade under the Asian Power Grid project, was launched in January 2018. The agreement enabled Thailand to buy power from Laos, which generates surplus electricity from dams along the Mekong river, to be sold to Malaysia. Now, the project is set to transition to the second phase under which Thailand will increase the amount of electricity that it buys from Laos from 100 MW to 300 MW. This will result in a surplus in its own power grid, which the country will sell to Malaysia.

Targets and outlook

The country plans to develop all hydropower potential as far as practical for export and provide electricity throughout the country. Lao aims to implement a policy on sustainable hydropower development as well as increase access to electricity by grid extensions and off-grid rural electrification. As per the Laos Power Development Plan, the country’s hydropower capacity is expected to reach over 14 GW by 2025 while coal-based power capacity would increase to 2.5 GW. The total generation is expected to be around 82,733 GWh by 2025.

There are plans to increase a share of renewable energy to 30 per cent in the total energy mix by 2025 and hydropower will be a major contributor to meet this target. Also, it aims to increase power export to 15,000 MW by 2030.

Overall, hydropower development is a top priority in the country’s National Energy Policy in order to stimulate the regional power trade and for optimising the energy mix in ASEAN. However,

this requires optimal development of the country’s hydropower resources in a sustainable way so that the multifaceted benefits are delivered to all stakeholders.

Based on a presentation by Litthanoulok Laspho, Chief of Electricity Generation Planning Division, Ministry of Energy and Mines, at a recent virtual conference on “Hydropower Asia” organised by Southeast Asian Infrastructure.