Did you know that Laos exports hydroelectric power even though the country has no access to the sea?
The Lao People's Democratic Republic is on the path to becoming the "Battery of Southeast Asia'' by taking crucial steps to harness its hydropower potential. With a potential of about 26 GW, one-third of it has been utilized so far, and several ongoing projects are planned to increase hydro generation, mainly for export to neighboring countries such as Thailand, Vietnam, Cambodia, and China.
In 2019, Laos added 1.89 GW of hydro capacity, the third-highest globally, after China and Brazil, with the commissioning of major projects like Xayaburi hydroelectric project (HEP), Nam Ngeip1 HEP, and Don Sahong HEP. The Laos government aims to continue promoting sustainable hydropower, intending to increase energy exports while reducing electricity prices.
Lao PDR occupies a large portion of the Mekong River basin and its tributaries, playing a crucial role in providing approximately 35% of the Mekong River's overall inflow. Hydropower has become an affordable energy option for Laos. With the government's decision to open up the power sector to foreign investment in 1993, the country has experienced rapid growth in installed hydropower capacity. Before this, only four operational hydropower stations with a total installed capacity of 206 MW were available. The growth in the Laotian hydropower sector has been fuelled by the demand for electricity exports to neighbouring countries such as Thailand and Vietnam. As a result, these countries have provided support for the development of hydropower projects in Laos.
Laos is committed to developing its abundant hydropower potential to not only supply electricity domestically but also to export it to other countries. The government is focused on pursuing a sustainable approach to hydropower development, while also expanding the electricity grid to rural areas. The Laos Power Development Plan has set ambitious goals, aiming to increase the country's hydropower capacity to over 14 GW by 2025, alongside an increase in coal-based power capacity to 2.5 GW. It is projected that the total electricity generation will reach approximately 82,733 GWh by 2025.
There are targets to increase the proportion of renewable energy in its overall energy mix to 30% by 2025, with hydropower playing a significant role in achieving this objective. Additionally, it has set a goal to enhance its power exports to 15,000 MW by 2030.
Over the past two decades, the electrification rate in Laos has significantly increased due to investments from neighbouring countries. In 1995, only 15% of the population had access to electricity, but by 2015, this number had reached almost 90%. However, it should be noted that the remaining areas that lack access to electricity are situated in remote and hard-to-reach regions. Besides that, Laos' gross domestic product (GDP) could be significantly boosted by power and mining exports, which are currently the largest contributors. These sectors have the potential to make up almost one-third of the country's GDP before 2020.
Hydroelectric power provides affordable and dependable means of accessing electricity, which is vital for sustainable development, poverty reduction and economic growth. Furthermore, unlike fossil fuel-based energy, hydroelectric power is eco-friendly and renewable. Laos' plans for hydropower development were included in its intended nationally determined contribution (INDC) to the United Nations Framework Convention on Climate Change (UNFCCC). It is expected that more than 50 hydropower sites will be operational in Laos by 2025.
Hydropower development is a top priority in the country’s National Energy Policy to stimulate regional power trade and to optimize the energy mix in ASEAN. Nevertheless, achieving this goal requires the optimal and sustainable development of the country’s hydropower resources to ensure that all stakeholders can benefit from its multifaceted advantages.
Zachau, Ulrich, Vientiane Times. (2015). Can We Make Hydropower Work for All in Laos?. World Bank
Mega Trends & Analysis. (2020). Laos Promotes Hydropower to Become the Battery of Southeast Asia. Reglobal: Analysis and Perspective for CXOs
Hydropower.org. (2022). Country Profile: Laos
Tan, Florence. (2014). Interview-Laos’ Hydropower Generation Capacity to Jump Almost Four-Fold by 2020. Reuters.com