IEEJ : July 2013

Energy Sector Development in Lao PDR
Presented to: Energy Policy training course
24/06-12/07/2013, Tokyo , Japan
By: Akhomdeth VONGSAY
Deputy Director of Energy Cooperation Division,
Department of Energy Policy and Planning,
Ministry of Energy and Mines, Lao PDREnergy Sector
1. Oil and Gas
2. Coal
3. Power Sector/Electricity
4. Others Renewable energy Nuclear energy

BACKGROUND OF LAO PDR

 Area of 236,800 sq km;
 Population of 6.8 million (2009);
 GDP per Capita of USD 900 (2009);
 Mountainous area with major tributaries ofthe Mekong River covering 35% of total
Mekong River basin.
 Relatively high annual rainfall.
 Hydropower potential: 23,000 MW
 Existing installed capacity of 3,205 MW
 The Government has identified both thehydropower and mining sectors as
fundamental drivers of progress towardachieving the Millennium Development
Goals by 2015 and graduating from the listof least developed economies by 2020

Primary Energy Resources of Lao PDRResource

Reserves

Potential for Use in Power Generation

Oil and Gas

Two exploration concessions in central and southern LaoPDR. Mapping and geophysical investigations are being
carried out, including deep hole drill (2,560 m). Results arebeing evaluatedPossibly in the longer term (10-15 years), if
sufficient reserves foundCoal(Lignite)

Major resource located at Hongsa in north-west Lao PDR.
About 810 million tons proven reserve, of which over 530
million tons is deemed economically recoverable. Energy
content 8-10 MJ/kg, relatively low sulfur content of 0.71.1%

Sufficient reserves for about 2,000 MW
installed capacity

Coal(BituminousandAnthracite)

Reserves, mainly anthracite, dispersed in various fields
throughout Lao PDR. Exploration ongoing. Total provenreserve to date about 100 million tons.
Energy contents 23-35 MJ/kg.

Current annual production of 130,000 tons,used for local factories or export. Possible
longer-term option for around 500 MW installedcapacity, depending on results of exploration.

Solar

Annual solar radiation received in Lao PDR about 1800
kWh/m2, possibly less in mountain areas.
Corresponds to conditions in southern Europe (Italy,Spain).

Photovoltaic modules already used for smallscale (e.g. 100 W) remote applications.

WindMean wind speeds at Luang Prabang and Vientianearound 1 m/s, in mountain areas likely to be somewhat
higher.

Costs in areas of less than 4 m/s likely to be inupper end of range US$ 0.05-0.25 per kWh,hence limited potential

Geothermal

No significant known reserves.

Limited potential for power generation

Biomass(agriculturewaste)

Biomass resources dispersed throughout the country.

Current share of biomass (mainly wood fuel) in
total energy consumption about 88%. Woodfired cogeneration (heat and power) plants
could be economic for self-supply in woodprocessing facilities

Hydropower

Average annual precipitation about 2,000 mm. Total runoff
around 240,000 million m3. Theoretical hydropower
potential of 26,000 MW (excluding mainstream Mekong).

Exploitable hydropower potential, including
share of mainstream Mekong, around 23,000
MW.

Oil and Gas

• 100% imported as in 2008 the total import was558,426,822 Liter (motor gasoline, diesel, jet fuel,bunker oil, lubricant)• Annual growth rate 7-8% (Oil consumption)• Salamander Energy Group has been approved for
exploration concessions in central of Lao PDR theMapping and geophysical investigations are being
carried out, including deep hole drill (3,400 m).
Results are being evaluated• Petro Vietnam has been approved for exploration
concessions in southern of Lao PDR.

Coal• Coal mining activity inthe Lao PDR is medium
to small scale operation.
• 19 coal projects:
3 General survey,
8 Exploration,
8 Exploitation---> conducted by
8 foreign companies
and 5 local companies.

RESERVE AND COAL PRODUCTION• Geological reserve: about 630,901,776 t• Mineable reserve: about 370,000,000 t• Coal mining activities in Laos are almost open cast.
• Coal is mainly produced in northern Laos and in
Vientiane province.
• In 2009 Coal was exploited about 413,409 tones inwhich 100,985 t was supplied for domestic
consumption.
• The demand for coal for domestic consumption isincreasing.

Coal development in Laos is in the early stage
and mostly is small to medium scale activities.
• Coal-fired Hongsa power project is to be the firstthermal power plant in Lao PDR.
• Due to the heavy domestic demand all types ofcoal are preserved for supplying only fordomestic consumption.
• Ensure the environmental concerns andsustainable development .
•Hongsa Power Project• First ever thermal power plant inLaos (? 2015)• To be developed on a BOT basis• Capacity 1,653 MW(3 units of 626 MW each)• Consume about 1,923 t/h oflignite of average heating value ofapproximately 3,000 kcal / kg

Power Sector

Power Sector• The hydropower and mining sectors in Lao
People’s Democratic Republic (PDR) havedeveloped rapidly over the past ten years, andhave become the two primary commodities ofthe country• The Government Of Lao has set up the nationaltarget for the household electrifies (standardusage), which 70% and 90% in 2010 and 2020
respectively

HISTORY OF POWER SECTOR DEVELOPMENT Memorandum of Understanding on the power exchange program
were signed with the Royal Thai Government in 1993, 1996, 2006
and 2007 under which 1,500 MW is to be supplied to Thailand andsubsequently increased to 7,000 MW is agreed; In 1998 and 2006 MOUs were signed with the Government ofVietnam for 3000 MW and subsequently increased to 5,000 MW isagreed; In 1999 Agreement on Cooperation in Power Sector was signed withCambodia;
 Power Sector Strategy is being developed and updated from time totime; Power sector opened to private foreign direct investments;
 Legal framework has been improved from time to time to meetinternational financing requirements.

POWER SECTOR POLICY Maintain and expand affordable, reliable and sustainable
electricity supply to promote economic and socialdevelopment; Promote power exports as well as domestic power
supply to earn revenues to meet Government
development objectives with particular emphasis on
poverty eradication;
 Develop and enhance the legal and regulatory
framework to facilitate power sector development byeither public, private or public private partnership; Gain capacity building through international technicalknow-how and expertise; Ensure accountability and transparency ofenvironmental and social impacts and thereby achievesustainable development

OBJECTIVES OF POWER SECTORDEVELOPMENT
 Provide a source of foreign exchange to fund economic
and social development and alleviate poverty;
 Meet the commitments under intergovernmental MOUsand Agreements with Thailand, Vietnam and others;
 Extend rural electrification to promote better socioeconomic development and reach the government targetof 70% and 90% by year 2010 and 2020 respectively; Integrate power sector and maintain its economic
development as a whole with international communities
trough its power exchange programs and foreign direct
investment.

OWNERSHIP OF POWER GENERATIONThe country’s total installed Capacity (2012): 3,205 MW:
EdL 606 MW, IPP: 2,599 MW

Hydropower Generation
Year

Generation(Gwh)

Domestic supply(Gwh)Export (Gwh)

Import (Gwh)2001

3,653.7710.3

2,871.4

183.8

2002

3,604.1

766.7

2,798.3

200.8

2003

3,178.2883.7

2,284.6

229.3

2004

3,347.6

902.8

2,424.6

277.6

2005

3,509.4

1,011.1

2,506.0

329.5

2006

3,595.0

1,406.0

2,487.4

631.1

2007

3,373.6

1,615.7

2,230.4

793.4

2008

3,717.0

1,915.7

2,315.4

844.5

2009

3,384.3

2,257.8

1,920.8

1,175.1

2010

8,449.02,440.7

6,646.5

1,209.7

2011

12,979.5

2,555.7

10,668.4

904.3

STATISTICS OF ELECTRICITY GENERATION,SUPPLY, IMPORT AND EXPORTElectricity consumption in all categories from 2001-2011 (Gwh)Electrified households

EXISTING NETWORK AS OF 2009

DEMAND FORECASTS
Demand Forecasts
3,000.00
2,500.00
2,000.00
1,500.00

Average growth (2008-20) = 16.3%

1,000.00
500.002007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

DEMAND FORECASTS (CONT.)
Share in Total Demand (MW)
100%
80%
60%
40%20%0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Domestic Demand

Large industries

Electricity Tariff in Lao PDRMonth, Year

Lao Kip/kWh

Jan-08Jan-09Jan-10Jan-11

Lao Kip/kWh

175201231266

Lao Kip/kWh290

298307316

Lao Kip/kWh

765

765

765765

Lao Kip/kWh

826

826

826

826

Lao Kip/kWh

702

702

702

702

Lao Kip/kWh

1,095

1,095

1,095

1,095

Lao Kip/kWh

677

667

658

649

Lao Kip/kWh

575

567

559

551

Lao Kip/kWh

1,066

1,066

1,066

1,066

Lao Kip/kWh

610

601

593

584

Lao Kip/kWh

518

511

504

497

Lao Kip/kWh

341

359

377

395

Lao Kip/kWh

290

305

320

336

Residential

0-Œ25 kWh26Œ-150kWh>150 kWhBusiness

Intertratement
Government

Inter. Organization
Industry
Irrigation

Low Volt.

Med. Volt.
Low Volt.

Med. Volt.
Low Volt.

Med. Volt.
Low Volt.

Med. Volt.

Exchange Rate 1$=8450 Kip

Potential Export to Thailand
12345678910111213141516171819

Nam Theun 2
Nam Ngum 2
Nam Bak 1
Theun Hinboun Exp
Nam Ngum 3
Nam Theun 1
Nam Ngiep 1
Hongsa Lignite
Nam OuDonsahong (Mainstream)
Sepian Xenamnoi
Sekong 4
Sekong 5
Nam Kong 1
Xayabouly (Mainstream)
Pak Beng (Mainstream)
Pak Lay (Mainstream)
Sanakham (Mainstream)
Lat sua (Mainstream)

MW1088615
80
22046052326818001143
240
390
300
330
75
1260
1012
1002
692
686
12184

GWh
5936 Under testing
1976 under construction
240 FS Completed
1395 under construction
2077 FS Completed
1840 FS Completed
1327 FS Completed
12200 under construction
4977 FS on going
2375 FS Completed
1748 FS Completed
1901 FS Completed
1200 FS Completed
469 FS Completed
5602 FS Completed
4722 FS Completed
4369 FS on going3202 FS on going
2750 FS Completed
60306

Yes
Yes
No
Yes
No
No
No
Yes
No
No
No
No
No
NoNo
No
No
NoNo

Dec-09
2010
2012
??
??
??
2014??
??
??
??
??
??
??
??
??
??
??

Potential Export to Vietnam
No123456789101112131415161718

Install Capacity Energy Status of the project Tariff
MWGWh
NoXekaman 12901096 under construction
NoXekaman 2A
64241
FS on going
NoXekaman 2B
100
380
FS on going
YesXekaman 3250
982
under construction
NoXekaman 4A
96375
FS on going
NoXekaman 4B
74
301
FS on goingNo
Sekong 3Up.
145
598
FS on goingNo
Sekong 3dow.
90
375
FS on going
NoNam Ngum 4220813
FS Completed
NoNam Sam 194323
FS Completed
No
Nam Sam 3
196635
FS Completed
No
Nam Mo2105
496
FS Completed
No
Nam Mo166
280
FS on goingNo
Nam Ma-1,2,3
175820
FS on going
NoLuangprabang (Mekong)
1288
5602 FS on goingNo
Dak E Mule105506
FS on goingNo
Nam Kong 275310
FS on goingNo
Nam Kong 3
30
126
FS on going
3463
14259
Name of Project

COD
2012
??
??
2010
??
??
??
??
??
??
??
??
??
??
??
??
??
??

GMS Power Grid
1. Nabong (Laos) - Oudon (Thailand)
2. Ban Sok (Laos) – Pleiku (Vietnam)
3. Ban Sok (Laos) - Oubon (Thailand)
4. Hongsa (Laos) - Thailand
5. Nam Ou (Laos) - Thailand
6. Luangphabang (Laos) - Nho Quanor Than Hoa Vietnam
7. Xayabouli (Laos) – Khon Ken(Thailand)
8. Pakbeng (Laos)-Thailand

National Network up to 2020

Others• Renewable energy• Nuclear

Renewable energy• Currently Lao PDR is drafting the strategy policy forrenewable energy• Policies on the promotion and development of
renewable energy in Laos have emphasizedhydropower and should be focusing more on
producing feedstock for bio fuel which has potential
in the country• The Goals of 2025 state that production of renewableenergy should reach 30% of the total energy in thecountry, for use in production, agriculture, forestry,processing and industry. The specific goal for bio fuelis set at 10%, especially to replacing imported fossilfuel• The government defines priorities for development asfollows:– Promote sustainable renewable energy
development as important part for ensuring thesupply of energy in the social and economic
development– Facilitate financial aspects such as tax exemption
and incentive for investors– Prepare and improve law, regulations related tofacilitation of renewable energy development

Rural Electrification (Solar)
Year

Number of operational system (watts)

1999

257

2000

392

2001

392

2002

1,207

2003

3,531

2004

5,107

2005

6,357

2006

6,183

2007

9,431

2008

8,728

2009

13,339Nuclear energy• Government of Lao PDR is fully support
the nuclear energy in the developmental,
safety and environmental friendly aspectfor electricity generation

Thank You

Contact : report@tky.ieej.or.jp