Thailand agrees to buy more electricity from Laos

Thai environmentalists say the move favors profits over nature and riparian communities.

Thailand has agreed in principle to buy more electricity from Laos after the two Southeast Asian neighbors signed an agreement that expands energy cooperation between the two Mekong River neighbors.

The memorandum of understanding, signed by both countries’ respective ministers of energy on March 4, promotes clean energy and creates more opportunities to invest in Laos’ energy sector, an official of the Lao Ministry of Energy and Mines said Monday.

Laos has staked its future on power generation in a controversial bid to become “The Battery of Southeast Asia,” exporting electricity from more than 50 large and small-scale dams on the Mekong River and its tributaries.

Selling the excess energy has been a problem for heavily indebted Laos, which has agreements to buy the power from the dams at a fixed rate, but sells it at market rates, which have been lower due to the coronavirus pandemic.

Though the agreement paves the way for Thailand to purchase more power from Laos, prices still must be negotiated.

“The next step will be for each dam developer to negotiate prices and a power purchase agreement directly with the buyer, Thailand,” the Lao energy official said on condition of anonymity for safety reasons.

The energy official also said that Laos plans to build even more dams including at least five more on the Mekong River mainstream. Though he acknowledged that selling energy from the dams has been difficult recently as neighboring countries have their own power surpluses. Thailand, however, remains Laos’ largest market.

Laos’ state-run power company Électricité du Laos (EDL) is optimistic about the deal, an EDL official said.

“Data shows that the Electricity Generating Authority of Thailand is the most reliable buyer of our power,” the EDL official said.

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