Laos Seals Malaysia Energy Deal

The energy purchase and wheeling agreement (EPWA), the first multilateral energy exchange or trade in Asean, was signed during the Asean Ministers on Energy Meeting (AMEM) in the Philippines.

Under the two-year agreement, Laos will export power to Malaysia beginning on January 1, deputy director of Laos’ state-owned Electricite du Laos (EDL), Bounma Manivong, said on Thursday.

Once the agreement ends its term, the involved parties will negotiate again (on future energy trading), said Mr Bounma, who accompanied the Lao delegation to the Philippines.

Malaysia’s The Star newspaper reported that Tenaga Nasional Bhd (TNB), the national utility company of Malaysia which signed the EPWA, will import the electricity from EDL via the existing transmission grid owned by the Electricity Generating Authority of Thailand (EGAT).

Without disclosing the price, TNB said it was under no obligation to purchase any minimum amount of energy from EDL, it was revealed.

The EPWA governs the obligations of the parties in the selling, wheeling and purchase of energy from EDL via EGAT (the wheeler) to TNB for the two-year period based on the agreed terms and conditions, according to The Star .

The EPWA was inked after energy authorities from Laos, Malaysia and Thailand signed a memorandum of understanding in September last year in Myanmar during the AMEM, which indicated that Malaysia intended to purchase power from Laos.

The 10-member Southeast Asian regional bloc is working towards setting up arrangements for electricity and natural gas within the region via the Asean Power Grid and Trans-Asean Gas Pipeline.

Laos has strongly supported the initiative as it seeks to export more electricity. The country boasts high potential to produce and export more power to its neighbours and other Asean members via the regional power grid.

By 2020, there will be more than 90 hydropower plants in Laos with combined installed capacity of almost 14,000MW.

The country has the potential to develop a number of hydroelectricity plants with combined installed capacity of about 28,000 MW overall, according to the Ministry of Energy and Mines. Lao authorities previously stated that they had engaged in talks with Thailand, Malaysia and Singapore to selling another 100MW of electricity to Singapore via the Thai and Malaysian power grids. Laos already exports electricity to neighbouring Cambodia, Vietnam and Thailand with the latter being |the biggest buyer of Lao-generated energy.During the first six months of this year, Laos exported more than 10,877 million kilowatt hours (kWh) of electricity worth more than US$596 million.

The exported power also included electricity generated by the Hongsa lignite power plant.