Laos expects continued growth in the energy sector
Laos expects continued growth in the energy sector
The Lao energy sector is expected to see continued growth in the coming years despite the economic slowdown, a senior government official has said.
Deputy Minister of Energy and Mines Mr Viraphonh Viravong said recently continuing growth would be possible due to increasing foreign investment in the energy sector and rising demand for cheap energy in Laos and its neigbouring countries.
“For example, in Thailand, they are more than willing to buy cheaper hydropower from Laos to replace gas-fired power projects ... so I don't envisage any slowdown in power projects,” he told Reuters on the sidelines of Singapore International Energy Week which took place from October 26 to 28.
Laos' economic growth stood at 7.5 percent growth last fiscal year, dropping from 8 percent in the previous fiscal year. The dip in the growth rate caused widespread speculation among journalists that investment in the Lao energy sector would be suspended.
But Mr Viraphonh said the production capacity of the energy sector would climb to 10,000MW in 2020. At present, the country's generation capacity is 3,000MW.
There are also several energy generation projects under construction, including the 1,285MW Xayaboury dam, which is about 60 percent complete and expected to become operational in 2019.
Apart from hydropower, Laos is also exploring for shale gas at coal deposits scattered around the country and could consider exports if finds are made, Mr Viraphonh said.
“Some companies are in the preliminary stages of investigating shale gas exploration,” he said. “We have a few coal deposits, but they are scattered and not in blocks, so they expect shale gas to be trapped in those areas and will be looking at that rather than oil.”
If shale gas is found, it will mainly be exported as demand in Laos is not sufficient to absorb the volumes even though they are unlikely to be large, he said. Concessions to explore for oil in central and southern Laos have not yielded anything substantial, he added.
Regarding power exports, the main markets for Lao energy are Thailand and Vietnam. Mr Viraphonh said Singapore had also expressed interest in buying electricity from Laos, adding that officials were now discussing legal, commercial and technical issues.
The transmission of 100MW between Laos and Singapore would be made through the Thai and Malaysian power grids, Mr Viraphonh said.
Laos has the potential to build more than 100 dams with a total capacity of 30,000MW, thanks to the abundance of rivers and mountainous terrain.
If this potential can be unharnessed, it has the power to fuel Laos' ambition to become a major supplier of electricity within the Asean bloc.
