Lao Economy

Lao Hydro: Wind To Ease Asean Energy Shortage

Source: The Nation

LAOS, OFTEN called the “Battery of Asean”, will live up to its name by supplying Asean power at a critical time, when energy demand in the region’s fast growing economies threatens shortages amid several infrastructure and urbanisation projects, pledged Laos Vice Minister for Energy Viraphonh Vilavong.

Thailand, which depends on natural gas for 70 per cent of its electricity needs, has been struggling due to the depletion local reserves while suppliers like Myanmar are cutting back supplies to keep for its own use.

Viraphonh said Laos was now “optimising” its electricity production with the help of development agencies such as the World Bank and the Asian Development Bank to increase output more efficiently. Already Laos produces some of the world’s cheapest and cleanest electricity, selling 75 per cent of it to Thailand at a low seven US cents a kilowatt-hour. The 20-year electricity partnership makes the two countries reliable allies, bringing benefits to both sides, he noted.

“Hydropower, which is clean and renewable, is the chief and best form for Laos to produce electricity. We do not have oil, and hydro does not pollute the environment,” he said.

Coal and shale are more costly and emit carbon dioxide, the minister added. “Laos will support renewable projects for wind and solar as long as they do not need [a] government subsidy,” he said.

Laos will soon have the region’s biggest and most advanced wind farm. It will be located on 8,000 rai and supplying 600 megawatts of non-subsidised electricity. Valued at about Bt54 billion, it will use the latest wind turbine technology from General Electric and Vesta.

A turnkey project with Thailand’s Impact Energy Group, the farm is expected to be operational in two years. The sale of the farm’s energy will not affect Thai wind farms, as it will come from the Laos portion of the electricity quota to the Kingdom, Viraphonl said.

A further indication that Laos will play a key role in energy is the rapid formation of the Laos-Thai-Malaysia-Singapore power transmission project after its launch two years ago in Vientiane.

The project will allow Singapore and Malaysia and other connected member states to buy electricity from Laos, a feat performed immediately using existing grid connections. “We hope to sign the MoU [memorandum of understanding] for the project at the next Asean gathering in Myanmar this year,” Viraphonl said.

What started as a simple Thai-Laos electricity link is fast becoming a multiple Asean member project with Singapore and Malaysia saying they will buy a token 100MW to get it off the ground. Vilaphonl said Myanmar and Laos officials were in talks for a power grid connection across the Mekong where they share a border. That makes Myanmar a possible fifth country in the project.

The minister, who is Australian trained in engineering, recalled how he worked on one of the first Thai-Laos hydro projects – Theun Hinboun – about 20 years ago. “There were some people who almost stopped the project by saying there was a risk that Laos would stop supplying power to Thailand,” he said.

He said mistrust among members states would allow planners to add big “risk premiums” when evaluating the cost of investing in the country.