Laos’ Ministry of Energy and Mines (MEM) has set a goal of increasing hydropower capacity to 12GW by the end of 2025 and 20GW by 2030, to facilitate regional exports. The nation is poised to export renewable electricity to Thailand, Cambodia and Vietnam, and to a lesser extent, Myanmar and Malaysia. Against this backdrop, large hydropower capacity in the country is expected to reach 16GW in 2035, registering a compound annual growth rate (CAGR) of 4.8% between 2024 and 2035.

Annual large hydropower generation in Laos is expected to increase at a CAGR of 4.6% between 2024 and 2035 to reach 63.5 terawatt hours (TWh). Although at the current pace, the country is expected to fall short of its 2030 target, proper policy enforcement and time-bound targets will enable it to bridge this gap.

In 2011, the country issued its Renewable Energy Development Strategy, setting a target of 30% of energy consumption to be sourced from renewables by 2025. The government has primarily focused on hydropower along with biomass energy.

Laos has established itself as a net exporter of electricity, earning the moniker “the battery of Southeast Asia.” The nation produces an excess of electricity beyond its domestic needs, facilitating the export of this surplus to neighboring countries, with Thailand, Vietnam, China and Cambodia the primary beneficiaries. The country engages in the exportation of electricity through long-term power purchase agreements with these adjacent nations. Laos is planning to export 9GW of electricity to Thailand by 2025 and 5GW to Vietnam by 2030.

Thailand stands as the foremost recipient of Laotian electricity, utilising both 500kV and 230kV transmission lines for this purpose. Vietnam ranks next, receiving electricity via 220kV and 500kV transmission lines.

Laos relies significantly on export revenue, which renders its economy susceptible to fluctuations in external markets. To manage the increasing cross-border electricity flows, there is a pressing need for infrastructure enhancements. Moreover, as prices are frequently determined by purchasers such as Thailand and Vietnam, Laos finds its bargaining power constrained. The country should look to invest in energy storage systems and to upgrade its grid to overcome these challenges.