Supply security through hydropower should enable Laos to expedite renewable development

With supply security through hydropower and being a net exporter of electricity, Laos has the capacity to expedite renewables development depending on funding support from developed countries, as it targets to achieve 30% of its energy consumption from renewable sources by 2025, says GlobalData, the data and analytics company.

GlobalData’s latest report, Laos Power Market Size, Trends, Regulations, Competitive Landscape and Forecast, 2022-2035, reveals that Laos’ total annual generation was recorded at 36.8 TWh in 2021, with 27.5 TWh of that capacity exported to neighbouring countries and only 8TWh consumed domestically. Due to its positioning within the Mekong River, Laos has a huge hydropower potential of 23GW, as per government estimates. Currently, hydropower capacity in the country is 9.6GW. There are several upcoming hydropower projects aimed at electricity exports.  

Attaurrahman Ojindaram Saibasan, Power Analyst at 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 1GW of total solar and wind capacity and 300MW 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 0.6GW 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 $12.6 billion that makes it difficult for the country to avoid the expansion of coal-powered plants. In March 2021, the government signed a $2 billion agreement with Electricite du Laos Transmission Company Ltd. (EDLT), 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 3.4GW of wind capacity, over 1GW utility-scale solar PV capacity, and over 9.1GW hydropower capacity.”