IEEJ : May 2011

“Energy Policy in Lao PDR”
Phonepasong SITHIDETH.
Technical staff
Ministry of Energy and Mines. (MEM)
Department of Electricity. (DOE)
IEEJ, May 2011
Tokyo JapanIEEJ : May 2011

Content•

Background•

Current energy policy and measures•

Energy demand and supply (statistics)•

Major difficulties and bottlenecks currently
faced in formulating energy policies•

Expectation

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Background• Area 236,800 Km2 ;•Population about 6.2 million,• Over 80% lives in rural areas• GDP around US$ 900 per annum.
(2010)• Less developed country• Hydropower potential 26,000 MW• Existing installed capacity of
1,804 MW (7%)

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• The main economic in Laos
– Agriculture– Power Generation,– Mining– Services

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Background (Power Sector Development)• MOU with the Government of Thailand (Dec 2007)– Recent agreement saw the power purchase scheme expanded to cover thesupply of 7,000 MW of electric power to Thailand by 2020.

• MOU with the Government of Vietnam ( Jan 2008)– 3,000 MW to 5,000 MW for the supply of electricity to by 2020, wasagreed in principle.

• In 1999 Agreement on Cooperation in Power was
signed with Cambodia.
• Power Sector Strategy developed and update time totime

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Current energy policy and measures (1)• Government set up the Power Sector Policy:– Maintain and expand affordable, reliable and sustainable
electricity supply to promote economic and social development;– Promote power exports as well as domestic power supply to earnrevenues to meet Government development objectives withparticular emphasis on poverty eradication.
– Develop and enhance the legal and regulatory framework tofacilitate power sector development by either public, private or
public private partnership;– Gain capacity building through international technical know-howand expertise;– Ensure accountability and transparency of environmental andsocial impacts and thereby achieve sustainable development.

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Current energy policy and measures (2)• In order to meet the government
target for the increasing thehouseholds electrification frompresent 70 % of total households
to 90% in 2020.

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Current energy policy and measures (3)National Policy Environmental and Social
Sustainability of the Hydropower sector in Lao PDR(2006)

1. Economic sustainability relies upon the maintenance of therenewable resource base, and the use of non-renewable resource
rents to support the development of other factors of production;
2. Social sustainability is based upon the principles ofinclusiveness, mutual understanding and consensus;
3. Ecological sustainability relies upon the avoidance ofirreversible environmental impacts such as the loss ofbiodiversity, accumulation of persistent pollutants, or disruptionof ecology cycles

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Current energy policy and measures (3)Renewable Energy Development Strategy in Lao
PDR (Draft, 2010)• Priorities for development as follows:– Promote sustainable renewable energy development as animportant part of ensuring energy supply for social and economicdevelopment– Provide financial incentives to investors who aim to produce
clean energies to meet domestic demand and, who take sociallyand environmental corporate responsibility in order to increase
investments in renewable energy projects– Formulate and improve laws and regulations to facilitate
renewable energy development.

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Current energy policy (Renewable Energy)
 Targets for 2025 *• The Government aims to increase the shareof renewable energies to 30% of the totalenergy consumption in 2025.
• To reduce the importation of fossil fuels, theGovernment outlines a tentative vision toreach 10% of the total transport energy
consumption from bio-fuels
Source: * Renewable Energy Development Strategy in Lao PDR (MEM, 2010)

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Current energy policy (Renewable Energy)• Financial measures which include:– Policies on subsidizing tariffs bought from energy
until 2015, especially the revision of the tariff rate, inreference to appropriate technological and economic
conditions– Policies on the supply of investment capital to assist
in initial investment on renewable energy, including
low interest loans for the investment in the productionof renewable energy– Improve law and regulations related to renewableenergyIEEJ : May 2011

Energy demand and supply• Energy use based on sectors

Source: MEM, 2011

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Energy demand and supply (2)Energy demand and consumption

Source: MEM, 2011

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Energy demand estimation (kTOE)

Source: MEM, 2011

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Major difficulties and bottlenecks currently faced informulating energy policies– There is a lack of an integrated national energy policy andno clear or existing vision to cover all energy sub-sectors.
– In the area of baselines and scenarios, the main gap is lackof data and information of all sub-sectors of energy.
– The limitation of manpower with the knowledge of knowhow, experience and skills in strategic planning and those ofimplementing the plans.
– Responsibilities among agencies, which are in charge ofenergy sector, are not clearly described and co-ordinated.

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Major difficulties and bottlenecks currently faced informulating energy policies (cont’d)– Lao PDR has not yet Policy on Energy Efficiency as wellas the legal framework and public campaign on energy
efficiency and conservation.
– Establish appropriate incentive policies to facilitate thedevelopment of renewable energy and fairness for theconsumers– Set up, improve and implementation the regulations andexisting laws to develop effectively develop the electricity
sector.
– Promote the renewable energy for the rural electrification
to result in poverty reductionIEEJ : May 2011

• Transmission Line is notconnected all country• Promoting 500 kV griddevelopment within theGreater Mekong Sub-region(GMS) to integrate thepower systems of Lao PDRand its neighbors.
• Lack of human resource• Budget constraintIEEJ : May 2011

Conclusion• Hydropower resource is the most abundant energy
resource in Lao PDR• All refined petroleum products consumed in thecountry are imported• Energy use in the country is mainly in the form of
traditional fuels, i.e. the use of biomass such as woodand charcoal for cooking and heating in rural areas• Review the existing policy measures with view todeveloping more cost effective policies and to adjust
the new energy policy

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Expectation• To improve my skill and experience fromJapan and other countries, in order to myfuture work on Energy policy.
• All policy

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Contact : report@tky.ieej.or.jp