A new program helps Laos navigate its hydropower boom

In the past decade, Laos has built at least a dozen dams, drastically increasing its electricity generation and transforming the country’s rivers.

Many more are planned in the coming years. But the country – rich not only in the hydropower resources of the Mekong River and its tributaries, but also solar energy – lacks a process that navigates the opportunities and challenges of such a large-scale boom.

SEI is working with the United States Agency for International Development (USAID) to change that, with a new program that will guide government officials through a process of integrated energy system modelling and planning, leading to an update of official power development plans.

“This is a time of great change in the country’s electrical system, and it comes with difficult questions,” said SEI Senior Scientist Jason Veysey, who is managing SEI’s work on the program. “What is the best mix of supply and demand resources? And how do we make sure that the system performs well, under future conditions that we can only imagine today? This is a chance to give policymakers the tools they need to ensure sustainable, resilient power development.”

SEI and USAID launched the program in February at a workshop in Vientiane. In the coming months, researchers will work with officials from the Ministry of Energy and Mines and from Électricité du Laos to develop and refine the tools needed for an updated power development plan.

The project comes as hydropower continues to transform Laos. More than 92% of households now have electricity; seven years ago, that number was 79%. Electricity exports have also soared: most of Laos’ hydropower goes straight to neighboring countries.

This development comes with significant environmental and social risks that are not always addressed uniformly. Dams can block the migrations of fish, alter a river’s flow and degrade wildlife habitat. They can also introduce new risks to river communities; last year, for example, a dam broke along Laos’ Nam Ao River, unleashing a torrent of water that flooded seven villages and ruined acres of farmland.

These considerations can be lost in the status quo of piecemeal development. But Laos officials will work with SEI and USAID to implement a more holistic approach that aims for “least-regrets pathways” – or, in other words, development that is more likely to be successful, both for the economy and the environment.

The 20-month program is part of USAID Clean Power Asia, an initiative that works with countries in the Lower Mekong region to encourage power sector investments in environmentally friendly, clean energy sources.

For Laos, SEI scientists will work with government and utility planners to build an electricity planning model using the Long-range Energy Alternatives Planning system, known as LEAP. SEI will then help them to use the model to explore a number of long-term scenarios, in a process known as Integrated Resource and Resilience Planning (IRRP).

IRRP places emphasis on the uncertainties and risks of the future – including those related to climate change. Changes in rainfall and extreme weather, for example, could pose a risk to Laos’ hydropower-dominated electricity system.

At the February workshop, SEI and USAID began the program with a discussion of the many planning objectives – including a few non-negotiable items – that should inform the planning process. Stakeholder representatives from a wide variety of government ministries lent their perspectives, as did interest groups like the Lao PDR Women’s Union.

“There were actually a lot of different viewpoints – every priority from maximizing exports to protecting fish habitat to improving energy access,” said SEI Staff Scientist Taylor Binnington, who was at the workship and is contributing to capacity development and modeling activities. “That diversity of perspectives is an important part of why IRRP leads to enduring outcomes. The challenge for us is to help the government find a way to strike the right balance among them.”