October 28, 2014 / 8:22 AM / 5 years ago

INTERVIEW-Laos' hydropower generation capacity to jump almost four-fold by 2020

* Power, mining to account for about a third of GDP by 2017-18

* Sees hydropower generation capacity at 24,000 MW by 2030

* To explore power exchange with China

By Florence Tan

SINGAPORE, Oct 28 (Reuters) - Laos plans to quadruple its hydropower generation capacity from current levels by the end of the decade and step up electricity exports to its neighbouring countries, its vice minister of energy and mines said on Tuesday.

Laos is among Asia’s poorest countries but has big ambitions to become the “Battery of Southeast Asia” by exporting power generated from its ample water resources. The country shares borders with China, Myanmar, Thailand, Cambodia and Vietnam.

Laos currently exports two-thirds of the 3,200 megawatts (MW) of hydropower it generates and has another 6,000 MW under construction, Viraphonh Viravong told Reuters.

“We expect by 2020, we’ll have 12,000 MW in operation with two-thirds for the export market,” Viravong said on the sidelines of the Singapore International Energy Week.

“By 2030, we may double that capacity to 24,000 MW which is nearly all the hydro potential in Laos.”

Power and mining exports, the biggest contributors to Laos’ gross domestic product (GDP), could account for nearly a third of its GDP before 2020, up from over 20 percent now, he said.

Thailand is currently the biggest buyer of electricity from Laos, which has agreements to supply to Vietnam and Cambodia as well. The power exporter is also looking at ways to exchange electricity with China.

Laos imports power from China, Vietnam and Thailand to supply to its remote northern areas where the country’s power grid does not reach.

But now Laos is exploring the possibility of China buying back “what they are developing” in case of a power excess in Laos, Viravong said. China and Thailand are the biggest investors in Laos’ power sector.

Laos will also benefit from hydropower sales to multiple parties under two regional power grids, studies for which are under way, Viravong said.

The Greater Mekong Subregion (GMS) will see power exchange between Laos, Yunnan province in China, Vietnam, Thailand and Cambodia while under the ASEAN project, electricity could flow from Laos to Singapore through Thailand and Malaysia.

“It may take some time because it’s the first to be done in Asia,” Viravong said, referring to the ASEAN project.

Infrastructure for the Laos-to-Singapore electricity sale is in place but Thailand and Malaysia may have different approaches to deal with technical issues, he added.

While hydropower is a renewable source of energy that could last for 100 years, Laos faces opposition from environmentalists seeking to prevent the building of dams on the Mekong River.

Such projects, including the 1,285 MW Xayaburi dam which is under construction, could threaten the livelihood of people along the river, environmentalists say.

“We want to develop all the (hydropower) potential in Laos that is environmentally acceptable and financially viable,” Viravong said. (Editing by Himani Sarkar)

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