Energy policy in Lao PDR has gained much public attention since the establishment of the Ministry of Energy and Mines (MEM) in 2006. Under MEM, the country’s energy policy has evolved from a singular power sector policy to broader policies supporting the development of a sustainable and environmentally friendly energy sector.
Exportation of electricity could bring about US$121 billion in cross-revenue by 2050, excluding the potential of carbon credits from renewable energy projects of carbon of-setting and forest reserves.3 Lao PDR could also earn foreign exchange through electricity export, cutting the cost of imported petroleum products and fertilizer.
As shown in Figure 1.1., electricity will have the largest share in the final energy consumption of Lao PDR by 2050 under both the baseline and carbon-neutral scenarios. Electricity’s share is expected to increase from 13% in 2017 to 42% or 43% by 2050. Oil and biomass would remain dominant fuel sources in 2050 under the carbon-neutral scenario.
Lao PDR has a long journey ahead in decarbonising its whole energy system; it has the current 1,878-MW Hongsa coal-fired power plant as well as additional already-committed coal-fired power plants in the southern part of the country.
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