Mekong Utility Watch

Lao-Thai Hydropower Purchase

September 16, 2008

A possible increase in the price of electricity from Laos forces Thailand to consider seeking alternative electricity sources.

The suggestion for increasing price of electricity from Laos an average of 6 cents/kWh to 8 cents/kWh recently makes Thailand to reconsider seeking alternative sources of its electricity instead of being committed to purchasing electricity from five Hydropower projects in Laos.

It may turn to domestic sources, including building a nuclear power station. However, according to Mr. Kraisy Kannasoud, Consultant and the former Director of Electricity General Authority of Thailand (EGAT), since the amount of 7,000 Megawatt of electricity, which Thailand agreed to purchase from Laos starting from 2015, is only a small amount of electricity compared to the country’s demand for electric power. Thus, Laos’ electricity is still needed as it can be reserved as a source of power to respond to the increase of demand for electricity, which between 5% and 6% or approximately to 2,000 Megawatt annually.

As a result, Thailand has to make a hard decision between canceling its purchase agreement of electricity from Laos and buying electricity at the new rate, which is approximately 33% higher than the average price agreed previously.

Songrit’s report is available in Lao online.


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