Energy

Energy

Mountainous terrain and heavy annual rainfall give Laos considerable hydroelectric potential. The Mekong River and its tributaries in Laos have an estimated hydroelectric potential of between 18,000 and 22,000 megawatts, or roughly half that of the river as a whole. The remaining potential belongs to Cambodia and other riparian countries. Total installed capacity in 1991 was 212 megawatts, the majority of it hydroelectric, or only about 1 percent of the potential.

Production of hydroelectricity, the country's major export until 1987, expanded slowly throughout the 1980s, from 930 thousand megawatt-hours in 1980 to about 1.1 million megawatt-hours in 1989, an increase of about 17 percent. The majority of electricity produced--approximately 75 to 80 percent, as of 1992--is exported to Thailand, which has an agreement to purchase all surplus electricity. The remainder is supplied to power networks for domestic consumption. Through 1986 the sale of electricity to Thailand was the country's most important source of foreign exchange. Despite increased production, in 1987 hydroelectricity yielded its place as the principal export to wood products, because of the drought, which lowered water levels, and a reduction in the unit price of electricity to Thailand. By 1991 a new agreement between Laos and Thailand had raised the unit price of electric power.

The largest hydropower facility in Laos is the Nam Ngum dam, sited on the Nam Ngum River, north of Vientiane. The Nam Ngum plant began operation in 1971 with an installed generating capacity of thirty megawatts; by 1987 additional turbines had increased capacity to 150 megawatts. In the early 1970s, the Nam Ngum facility provided electricity to Vientiane; the supply was gradually extended to surrounding villages on the Vientiane plain. As of the early 1990s, approximately 80 percent of the power produced at Nam Ngum was exported to Thailand; some was diverted to the south for town and village electrification.

A second hydroelectric dam was completed at Xeset near Saravan (Salavan) in southern Laos in 1991. The Xeset plant has an installed capacity of twenty megawatts.

About twenty smaller hydropower facilities and diesel plants supply additional power. Since the mid-1980s, Thakhek and Savannakhét had access to a regular power supply through a repurchase agreement with Thailand whereby a cable under the Mekong diverts power from the Thai electrical grid; villages along Route 9 east of Savannakhét have been receiving electricity since the late 1980s. Louangphrabang has seasonal access to power from a hydroelectric dam supplemented by diesel generators. A power transmission line from Nam Ngum to Louangphrabang is scheduled for completion in the mid-1990s and will bring electrification to many villages near Route 13 that previously relied on kerosene lamps and battery-operated florescent lights.

Hydroelectric capacity will further increase as a result of agreements signed either for construction of new facilities or for conducting feasibility studies for additional sites. Thailand is the primary investor in the hydroelectric sector; Australia, Denmark, Finland, Japan, Norway, and Sweden also have companies with interests in various projects.

As of 1992, other provincial centers relied primarily on diesel generators, which are run for three to four hours nightly and serve only a fraction of the surrounding population. Most district centers do not have electricity other than small private generators that light the houses of a few dozen subscribers for several hours each evening. Automobile batteries and voltages inverters are used as a means of supplementing the limited hours of power. These devices enable Laotians to watch television and listen to stereo cassette players, even in remote locations.

Despite assistance from the International Development Association, the Asian Development Bank, the United Nations Development Programme (UNDP), and other donors to increase rural electrification services, national consumption of electricity increased slowly. The average annual increase between 1970 and 1980 was 14.5 percent--an overall increase of 287 percent- -to 325 million kilowatt-hours. After 1980 the growth of consumption slowed greatly, to an average annual rate of just 1.5 percent, reaching 365 million kilowatt-hours in 1988. Per capita consumption was just 93.6 kilowatt-hours, one of the lowest rates in the region.

According to the World Bank, energy consumption grew at an average annual rate of 4.2 percent between 1965 and 1980, slowing to 1.8 percent in the 1980-90 period. Fuelwood constitutes about 85 percent of total energy consumption. Per capita consumption of fuelwood is between one and three cubic meters annually, accounting for more that ten times the consumption of wood for commercial purposes. Total usage--including fuelwood and charcoal--was 3.9 million cubic meters in the 1985-87 period, a 21 percent increase over the 1975-77 period. In 1985 hydroelectric power accounted for approximately 5 percent of annual energy consumption. Most consumption was in Vientiane; domestic use accounted for about 89 percent in 1983 and industrial use, only about 10 percent. The transportation sector, especially civil aviation, which consumed imported petroleum products, accounted for the remaining 5 percent of energy consumption.

The cost of fuel imports--primarily from the Soviet Union until 1991--has placed a heavy burden on the economy, constituting nearly 19 percent of all imports in 1986. In 1989 approximately 124,000 tons of petroleum fuel were imported, an increase of nearly 40 percent over the preceding year.

In 1987 an oil pipeline of 396 kilometers was laid from Vientiane to the border with Vietnam, close to the port of Vinh, facilitating the import of oil from the Soviet Union. The pipeline's capacity is 300,000 tons annually, considerably in excess of the annual national oil consumption rate of approximately 100,000 tons.

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