Utilities (Water, Electricity etc)

Electricity Unit Price ‘Not Expensive’: Laos

The unit price of electricity in Laos is not expensive, it is even cheaper than those of other countries in the region, a deputy minister has said.

Deputy Minister of Energy and Mines, Mr Viraphonh Viravong spoke to local media in a press conference last week held at the National Assembly (NA) in response to public complaints made through the hotline of the NA’s ordinary session recently.

Members of the public have complained that the unit price of electricity in Laos is high, despite the fact that Laos has developed a number of hydroelectricity dams in recent years. They called for consideration to lower the unit price.

The deputy minister said the unit price of electricity in Laos is already lower than prices in many other countries in the region.

Laos’ average unit price is currently charged at 600 kip per kilowatt hour (kwh), equivalent to slightly more than seven cents, lower than about 16 cents (1,280 kip) charged in neighbouring Cambodia, and lower the than 10 cents (800 kip) charged in neighbouring Thailand.

“We are the lowest,” he said.

The deputy minister explained that although Laos is rich with natural rivers favourable for developing hydropower dams, construction of the dams requires huge investment.

In addition, constructing the electricity grid and network also costs plenty of money meaning that spending for all these investments must be taken into account when calculating the unit price of electricity.

The unit price is calculated by Electricite Du Lao and the Ministry of Energy and Mines, and then proposed to the government for recommendation and approval.

Calculation of the unit price is based on the current economic situation and the purpose of use of the electricity in accordance with Law on Electricity.

For instance, the unit price for electricity used for agricultural production purposes is cheaper than that used by businesses.

Those people who use less electricity will be charged at a lower rate.

People who use less than 25 kwh per month of electricity [could be those using three lights, a fan and an electric cooking pan] are charged at around 300 kip per kwh, lower than the average rate of about 600 kip per kwh.

Describing the unit price in Laos as a reasonable price, Mr Viraphonh stated the government subsidising the price too much is not a good idea as people will not use electricity in an effective manner.

He said money earned from the electricity sector will play a crucial part in expanding the electricity network to pursue the government’s target set that 90 percent of the Lao population should have access to electricity by 2020.

“To achieve this, we need huge capital investment,” he said.

So far, 14 hydroelectricity dams with installed capacity of 15 Megawatts and more have been completed with combined installed capacity of about 3,200 Megawatts. Another 15 dams are being constructed with combined installed capacity of about somewhere between 4,000 to 5,000 megawatts.

More than 20 dams are planned to be constructed with a combined installed capacity of about 4,000 megawatts.

Source: Vientiane Times