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Hydropower supply security should allow Laos to pick up the pace of renewable development
8/2/2023
News
With supply security through hydropower and being a net exporter of electricity, Laos has the capacity to expedite renewables development as it aims to reach 30% of the country’s energy consumption to be met by renewable sources by 2025, according to GlobalData.
Laos’ total annual electricity generation reached 36.8 TWh in 2021, of which 27.5 TWh was exported to neighbouring countries and only 8 TWh consumed domestically, reports the market analyst.
Due to its positioning within the Mekong River, the country has huge hydropower potential of 23 GW, according to government estimates. Currently, hydropower capacity stands at 9.6 GW, with several upcoming hydropower projects aimed at electricity exports.
Attaurrahman Ojindaram Saibasan, Power Analyst, GlobalData, comments: ‘Laos is diversifying its power mix through renewable expansion, particularly hydro, solar and wind. The country also has set a conditional target to achieve 1 GW of total solar and wind capacity and 300 MW of biopower capacity by 2030 depending on the level of support it receives from developed countries. As per current estimates, the country is expected to achieve 0.6 GW solar PV capacity and 150 MW biopower capacity by 2030, falling short of its targets.’
However, Laos has shifted towards coal power in recent years as it struggles with a massive sovereign debt of $12.6bn that makes it difficult for the country to avoid the expansion of coal-powered plants. In March 2021, the government signed a $2bn agreement with Electricite du Laos Transmission Company, a Chinese owned company, to manage a significant part of Lao’s power grid for the next 25 years.
Saibasan concludes: ‘Laos is looking towards foreign investments for renewable power development to avoid coal-power expansion. The country currently has a project pipeline of 3.4 GW of wind capacity, over 1 GW utility-scale solar PV capacity, and over 9.1 GW hydropower capacity.’
