BusinessGovernmentInvestmentsLao EconomyUtilities (Water, Electricity etc)

Tackling Power Blackouts Key For Growth Of Business Sector

Source: Vientiane Times

Economists have called for the government to address power failures and blackouts in a move to further improve the business environment in Laos.

Many companies are unprepared for business disruptions caused by power outages, and are often unaware of the true costs and impact that they can have on operations.

The Minister of Energy and Mines, Dr Khammany Inthirath, clarified the situation to the National Assembly session this week that the government is working to deal with this issue.

He said the blackouts were due to several factors, including natural disasters and installation of substandard electricity equipment without approval from the relevant authorities.

Additionally, increased urbanisation has led to a demand for more electricity from consumers, but many generators and transmission lines are not capable of supplying adequate energy to the people. This sometimes leads to blackouts, he said.

Activities by construction projects near the power grid also sometimes caused short brown outs  (reduction in the voltage). Other reasons for blackouts include trucks hitting electricity poles and people cutting electricity wires.

Dr Khammany said the government plans to work with the private sector to develop transmission lines to ensure power security and to supply sufficient electricity to the business sector.

Experienced independent economist Dr Mana Southichak told Vientiane Times recently that power outages are one of the main barriers for investments in Laos.

Industrial parks, notably cement factories, telecommunication networks, financial services, and hospitals require sustained power supply to maintain their operations.

As a result of power outages, Dr Mana said, many business people decided to invest more in installing power reserve (generators) so that they could continue their operations during blackouts.

Critics say electricity is one of essential requirements of the investment sector. Without sustainable power supplies, it would be difficult for people to do business.

Quicker internet speed and upgrading of roads are also critical for investors to run effective businesses and reduce the cost of production, which will make their products more competitive in the regional and world markets.

Short outages are common during the hot season as too many air-conditioners switched on at once can overload the power grid. However, that isn’t the case right now.

Many expats living in areas with major infrastructure upgrades nearby have reported frequent blackouts and power cuts, especially on weekends.

Experts said frequent brownouts and blackouts occur in emerging economies which have typically under-invested in their energy infrastructure.

It is vital to invest more in aging national grid infrastructures to address power blackouts and ensure sufficient electricity is supplied to businesses and industries.

Laos has the potential to develop a number of hydroelectricity plants with a combined installed capacity of about 28,000 MW, according to the Ministry of Energy and Mines.

With a current installed capacity of about 6,000 MW, the Lao government expects to achieve 14,000 MW by 2020.


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