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Thursday, May 24, 2007

More local power needed to meet industrial growth

The government has announced plans to introduce more hydro-power projects to supply electricity to meet growing local demand, particularly with the growth of new industry around the country.

It will also conduct detailed surveys on the number of factories being built in Laos each year, and what additional electricity demands there may be in the future.

Director General of the Ministry of Energy and Mines' Department of Electricity, Mr Homphone Bouliyaphon, said yesterday that Laos currently does not have enough reserve electricity to supply new factories being built amid the country's growing economy.

Most of the hydro-electricity produced in Laos is intended for export to neighbouring countries, but can be bought back when local demands increase because of new industrial developments. This has an impact on the national economy.

“Today, agreements between investors and the government to export electricity to other countries stipulate that only 5 to 10 percent of the supply will go to local villagers,” Mr Homphone said.

“The only way to ensure new factories have a sufficient electricity supply is to establish more hydro-power projects to produce enough energy for the country.”

Current hydro-power projects primarily built for local supply in Laos include Nam Ngum 5, Nam Lik 1 and 2.

Mr Homphone explained that, previously, information about new industry had not been comprehensive enough for sectors to make plans for projected demands on the electricity grid.

Electricity du Laos, the country's main electricity company, is already earning almost US$20 million a year from exports of electricity to Thailand and Vietnam , but around US$8 million of its electricity has been bought back from these countries to meet local needs.

Last year, the cost of electricity imports increased to US$11 million due to developments in the provinces of Khammuan, Savannakhet and Bokeo, which re-imported their power to meet local demands.

“During the dry season, we use a lot of electricity, causing us to buy back power from neighbouring countries,” Mr Homphone said.

Laos has plans to build another 29 hydro-power projects by 2020, aspiring to become the ‘battery' of Asia . Currently, many dam projects are under survey and construction, to fulfil plans to export 5,500 megawatts of electricity to Thailand by 2015.

But Mr Homphone was also concerned about climate change from deforestation in watershed areas which could impact the operation of hydro-power projects.

“We will work in cooperation with relevant sectors to ensure our watershed is protected,” he said.

Mr Homphone said the cost of electricity in Laos was considered low and his department would review electricity prices again in 2012. “We still don't know whether we will increase or decrease the price. This will be decided after thorough discussions between the relevant sectors,” he said.

Currently, Electricity du Laos is concentrating on improving the electricity system to reduce blackouts during the wet season. The improvements will involve updating transformers and installing new cables in some areas.

The company has given notice to inform the public about planned electricity blackouts, to avoid inconvenience to residents.

(Latest Update May 23, 2007)

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