In an effort to address potential power shortages in its northern region, Vietnam is considering importing wind power from its neighboring country, Laos. The national energy monopoly, Vietnam Electricity (EVN), has requested approval to import at an economically viable rate of 6.95 cents per kilowatt-hour, lower than Vietnam’s own wind power rates.
Memorandum with Laos: a power pact
A memorandum signed between Vietnam and Laos in 2016 outlined a plan to steadily increase Vietnam’s power purchases, aiming to reach a target of 5,000 megawatts (MW) by 2030. Laos’ current supply stands at more than 4,100 MW, a considerable contribution towards this goal.
However, the energy pact has suffered some setbacks. Some Lao investors have withdrawn their stakes and there have been delays in the completion of the power plants, resulting in a shortfall of the 2,700 MW of hydropower expected to be imported. This has led Vietnam to explore additional import avenues, such as wind power plants in Laos.
Infrastructure and reliability concerns
Despite the economic benefits, analysts have expressed concern about the reliability of wind power due to its dependence on the weather. The current Vietnam-Laos transmission line can only handle 300 MW, prompting plans to expand its capacity to 2,500 MW by 2027. Additionally, local renewable energy companies in Vietnam are waiting for a commitment from EVN to purchase their electricity. .
The current situation has broader implications, which extend beyond the economic sphere and reach the political sphere. The relationship between Vietnam and Laos, traditionally strong allies, may be further tested by this development. Vietnam’s Ministry of Industry and Trade has proposed the installation of an additional power transmission line to Laos, a move that could potentially strengthen energy supplies between the two nations.
