Hongsa Power Plant 100% completed, Xayaboury Hydropower 70% Completed

Laos proposes sale of more energy to Thailand


Laos proposes sale of more energy to Thailand

Laos has suggested that Thailand import more electricity from its neighbour as Laos is now able to generate more power for export.

Speaking after a ceremony to open Laos' first lignite-fired power plant in Hongsa district, Xayaboury province recently, Thai Energy Minister General Anantaporn Kanjanarat said his Lao counterpart wanted to revise their power purchasing agreement.

Under the proposed power purchasing agreement between Laos and Thailand, which is expected to be signed next year, Laos wants to increase the amount of electricity sold to Thailand from 5,000MW to 10,000MW, it was reported in Thailand's The Nation newspaper.

Thailand has committed to purchasing 5,000MW of electricity from Laos by 2015 and has expressed the intention to buy an additional 2,000MW next year. However, the surge in Lao power production has inspired the Lao government to offer Thailand an extra 3,000MW.

If Thailand accepts Laos' proposal, this would enable Thailand to boost the electricity it purchases from abroad to 14,700MW by 2036, General Anantaporn Kanjanarat said as quoted in the Thai media.

According to Thailand's 20-year sustainable-electricity plan, it will buy 7,000MW from Laos between 2015 and 2026, and a further 7,700MW from Laos and other Asean countries such as Myanmar from 2027 to 2036.

Thailand's commitment to purchase electricity from Laos will boost investment in the Lao power sector as investors will see that the market is expanding. Banks will also gain confidence about providing more loans to investors to do business in Laos.

The CEO of Banpu, Somruedee Chaimongkol, which holds shares in the Hongsa Power Project, said as quoted in the Thai media that the company formed a key element in its strategy to diversify further from mining to the power-plant business.

At present, up to 40 percent of Banpu's net profit is from power-plant operations driven by both lignite and renewable energy - while 60 percent is from mining. By 2020, the company targets its power-plant business will generate up to 50 percent of net profit, she said.

In Laos, besides the Hongsa Power Project, Banpu is interested in expanding its investment in other forms of electricity generation such as hydropower, to drive its electricity portfolio to 2,400MW by 2020 and 4,000MW by 2025.

The company has already expanded its overseas power-plant investment in Japan, Laos and China and is studying further investment - both lignite- and renewable energy-based - in Indonesia, Myanmar and Vietnam, the CEO said.

Ratchaburi Electricity Generating Holding CEO Rum Herabat said his company was also studying expanding its investment in hydropower projects in Laos after the Hongsa Power Plant's successful opening.

“We are considering expansion in Laos and other countries in Asean, such as Myanmar and Indonesia, which would both extend our investment and secure the country's electricity system,” he said as quoted in The Nation.