25 July 2018

The International Hydropower Association (IHA) is deeply saddened to hear of the major flood incident at the Xe-Pian Xe-Namnoy project in Laos on Monday night.

Our thoughts are with everyone affected and all those involved in the recovery and relief effort.

The Xe-Pian Xe-Namnoy project

On Monday 23 July, one of the Xe-Pian Xe-Namnoy project’s saddle dams failed and caused severe flooding into the Xe-Pian River, affecting several villages in the Sanamxay district. Detailed investigations by authorities and SK Engineering & Construction, the lead company responsible for building the dam, are still underway.

Xe-Pian Xe-Namnoy Power Company (PNPC), the owner of the project, is a joint venture between SK Engineering & Construction, Korea Western Power, Ratchaburi Electricity Generating Holding and Lao Holding State Enterprise.

Underpinning the financing of the project was a Power Purchase Agreement (PPA) between PNPC and the Electricity Generating Authority of Thailand, which would see 90 per cent of electricity exported to Thailand. The remaining 10 per cent is part of a PPA between PNPC and Électricité du Laos. Under the terms of development, the project is intended to become the property of the Laotian government after 27 years.

Hydropower in Laos and regional interconnections

Laos has 4,984 MW of installed hydropower capacity and generated an estimated 22.7 TWh last year. It has a much larger theoretical potential of around 26.5 GW.

Laos continues to expand its generating capacity with an increasing emphasis on regional integration. Over 50 new hydropower projects are under consideration across the country, representing 8,000 MW of additional capacity if all were to be realised. Several projects totalling 166 MW were commissioned in 2017.

Driven by strong economic growth, energy demand in Southeast Asia has grown by 60 per cent over the past 15 years. According to the International Energy Agency, the region is expected to grow by a further 60 per cent by 2040.

Laos is a key power exporter to the Southeast Asia region. Currently, Laos sells its electricity to Thailand, Cambodia, Malaysia and Vietnam. Thailand is its main market, requiring up to 9,000 MW capacity by 2025. Laos is looking to expand its sales to Malaysia via Thailand’s electrical interconnection, and then to Singapore through Malaysia. In the first nine months of 2017, Laos exported 19 TWh of electricity, worth about USD 975 million. This was an increase of 25 per cent compared with the same period in 2016.

Laos transmits electricity into Thailand at various locations, including from the Nam Theun 2 hydropower station (1,090 MW), through an interconnection at the Thai border near Savannakhet, and at further connections to the northeast of Thailand. Theun Hinboun hydropower station (440 MW) exports electricity through transmission lines in south central Laos into Thailand, and the Nam Ngum hydropower stations (Phase 1 is 155 MW and Phase 2 is 615 MW) export electricity further to the north.

Hydropower stations are also connected to Vietnam’s electricity grid, with interconnections in the south of Laos fed by the Xekaman Phase 1 (290 MW) and Phase 3 (250 MW) stations.

IHA has offered collaboration to Laos on sharing relevant experience within its international network of members and partners, and stands ready to support the government and all organisations involved in hydropower development and operations.