Vietnam is keen to import more electricity from Laos to address its projected energy shortages, according to a senior official.

Deputy Minister of Energy and Mines Dr Daovong Phonekeo told Vientiane Times on December 9 that Vietnam is purchasing electricity from energy plants built by Lao and Vietnamese investors.

He said: “From now until 2025, Vietnam will purchase 3,000MW of electricity from Laos at a price of 6.95 US cents per kWh. It is expected that the amount of electricity sold to Vietnam will rise to 5,000MW between 2026 and 2030, with the price to be re-determined.”

National utility Vietnam Electricity (known by its French acronym EVN) signed three memorandums of understanding in Hanoi on December 6 to buy power from Lao companies, according to Vietnamese online newspaper VnExpress.

Vietnam will start importing power from the 84MW Nam Yeuang hydropower plant and the 300MW Nam Phan coal-fired thermal power plant in 2024 and 2025.

EVN will buy energy from two hydropower plants developed by the Phongsubthavy Group and one coal-fired power plant in Laos, starting in 2024.

Another hydropower plant, the Nam Neun 1, with a capacity of 124MW and developed by Kong Sup Hydro Development of Nam Neun 1 and Nam Neun 3, will also start transmitting power to Vietnam in those two years.

In January, EVN signed five deals with two Lao companies to buy 1.5 billion kWh of power each year in 2021 and 2022.

Dr Daovong said Laos has huge potential to produce energy from hydro, solar and wind-powered plants for sale to Vietnam and Cambodia.

Rapid economic growth in Vietnam is driving the demand for energy. Several multi-national corporations have relocated production to Vietnam to avoid the impact of trade tensions between the US and China.

Vietnam’s Ministry of Industry and Trade projected that power shortages could rise to 3.7 billion kWh in 2021 and nearly 10 billion kWh the following year. 2023 will be the most stressful with the shortage expected to be around 15 billion kWh.

Laos currently has 78 hydropower plants with a combined installed capacity of 9,972 MW in operation, which greatly exceeds domestic consumption needs. There is also a coal-fired power plant, four biomass projects, and six solar power plants.

Electricity is one of Laos’ main income earners, especially through sales to Thailand, Vietnam, Cambodia and Myanmar.

Meanwhile the demand for electricity in Laos grew significantly last year due to the increase in the population and the growing number of factories.

Last year, domestic consumption was 1,222MW, and the Ministry of Energy and Mines said consumption is expected to increase to 1,800MW between 2020 and 2025.