NA calls on govt to address electricity issues

The government has been urged to address the fact that it buys electricity from dam operators at a high cost but sells it at a lower price, which is contrary to general business principles.
National Assembly member for Vientiane and Vice President of the Lao National Chamber of Commerce and Industry, Ms Valy Vetsapong, recently asked the government to clarify the matter and seek possible solutions.
“We request the government to address this issue while looking for more markets to boost the export of Lao electricity in order to lower the nation’s debt burden,” she said.
Deputy Prime Minister and Minister of Planning and Investment, Dr Sonexay Siphandone, said the government will look into investment in the energy sector to better understand the root cause of the problem.
“In the past, when investors/developers proposed the cost of dam construction at about US$2-3 million per MW, deals were made based on those proposals,” he said.
“We have to base agreements on national interests. If investors misrepresent the actual cost of dam construction, our country will lose money.”
“We will re-assess the true construction cost of dams so that the nation does not suffer further damage,” he added.  “Electricite du Laos (EDL) will have to re-negotiate with the dam builders to find the best solution that benefits both investors and our country.”
It is important that the government determines the exact cost of dam construction because high production costs will result in high electricity charges.
For instance, Laos buys electricity from some dam projects for 6 US cents per kWh, but Yunnan province in China and Thailand can buy power from Laos for 4 and 5 cents per kWh respectively.
Dr Sonexay acknowledged that in the past the government had concentrated on quantity by speeding up the production of electricity. This had happened because the projected need for energy was higher than the actual demand.
He said the government projected that industrial projects would need a large amount of electricity, particularly special economic zones and mining operations.
But many of those projects have not even got under way or progressed as planned. Some operators are still looking for investors or development partners.
The projected high energy demand to supply industry resulted in massive development of hydropower plants.
Currently, there are 78 hydropower plants with a combined installed capacity of 9,972 MW in operation, which greatly exceeds domestic consumption needs.
There are also a coal-fired power plant, four biomass projects, and six solar power plants.
Another challenge is that transmission lines don’t connect all areas of the country, meaning that some places have to buy electricity from other countries.
In some years, Laos buys a lot of electricity from its neighbours at a high price, to meet increased demand in the dry season. The government is attempting to ensure that sufficient transmission lines are installed to connect all parts of the country, so that imports can be minimised.

By Somsack Pongkhao
(Latest Update November 11, 2020)