- Reliance on hydroelectricity becomes risk as demand grows in Thailand, Vietnam
According to Nikkei Asia article published on April X, 2023, Laos, one of Asia's biggest exporters of hydroelectricity, is poised to make a leap into wind power as a hedge against overreliance on its strained water resources.
Deep in the sparsely populated mountains of southeastern Laos, the sprawling Monsoon wind farm is under construction.
The farm, scheduled to start operation in 2025, is a project by Japanese trading house Mitsubishi Corp., Thai state-owned oil refiner Bangchak's renewable energy subsidiary BCPG and others. When completed, it will cover 70,000 hectares with 133 wind turbines.
A generation capacity of 600 megawatts will make Monsoon one of the largest onshore wind farms in Southeast Asia. The output will be sold to a state-owned power company in Vietnam for 25 years.
This is not the only wind power project on the horizon for landlocked Laos, which has positioned itself as the "battery of Southeast Asia" with an export-oriented energy policy.
A proposal for a 250 MW Vietnamese-backed wind farm has been under consideration since December. At least 10 projects are thought to be in the planning stages nationwide.
Around 80% of the power generated in Laos is sold to neighboring Thailand and Vietnam, accounting for 30% of the country's exports by value. Laos started power exports to Singapore in 2022 and began building transmission infrastructure in January for selling electricity to Cambodia.
More than 70% of the land in Laos consists of mountains and highlands, with many areas suitable for dams. Hydropower accounts for 70% of total generation in Laos. But concerns about the country's dependence on hydropower have driven a shift toward wind.
Hydroelectric output declines in dry seasons. China's control over the upstream portions of rivers also creates the risk of sudden changes in water levels -- a threat to farming and fisheries as well.
In 2018, the collapse of a dam built by South Korean and Thai companies in southern Laos resulted in at least 71 deaths and left more than 6,000 people homeless.
Wind farms offer a promising complement to hydropower dams. Driven by steady winds blowing over changes in elevation, turbines can operate day and night, and they are more efficient than solar panels.
Vientiane's development plan through 2030 calls for maintaining the current ratio of hydroelectric generation, while gradually shifting the nearly 30% generated by thermal power to other renewable sources, such as wind.
Laos sees growing demand for renewable energy among its neighbors. Thailand aims to achieve carbon neutrality by 2050. Vietnam is also making a big move toward decarbonization. Prime Minister Pham Minh Chinh pledged to reach carbon neutrality by 2050 at the COP26 U.N. climate conference in 2021.
One challenge for Vietnam will be to secure renewable energy to replace coal-fired power, which accounts for about 50% of the nation's supply. Power shortages stemming from the country's rapid economic growth have become an urgent problem.
Electricity demand in Vietnam was increasing by 10% a year before the coronavirus pandemic. By some estimates, demand will rise fivefold by 2050. Large-scale blackouts hit Hanoi and other areas in 2022, and more outages may occur this summer as the economy roars back to life from the COVID-19 pandemic.
While some areas off Vietnam's southern coast are suitable for offshore wind power generation, domestic generation alone cannot cover the country's shortage, a power industry source said.
Hanoi's territorial disputes with Beijing in the South China Sea make importing a large amount of electricity from China geopolitically risky. Against this backdrop, friendly Laos stands as an important power source.
China has financed hydroelectric dams in Laos but has had little involvement in wind power generation there. That could change as Chinese manufacturers of wind turbines see rapid growth tapping the huge domestic market.
"There is a lot of room for Chinese companies, which have a wealth of onshore wind power development know-how, to get involved in landlocked Laos," said Toru Nishihama, chief economist at the Dai-ichi Life Research Institute.
