Analysts argue that importing electricity from Laos presents a cost-effective solution to address power shortages in the northern region, aligning with a 2016 agreement between the two countries.
Vietnam Electricity (EVN), the national power monopoly, has recently requested approval to import wind power from Laos at a rate of 6.95 cents per kilowatt-hour.
EVN is also pushing for the installation of additional transmission lines to facilitate increased imports, addressing concerns about shortages in northern Vietnam stemming from a lack of new power plants.
In 2016, the governments of both countries signed a memorandum outlining Vietnam’s commitment to purchasing a minimum of 1,000 megawatts from Laos by 2020, 3,000 MW by 2025, and 5,000 MW by 2030.
While Vietnam initially agreed to import 2,700 MW of hydropower from Laos, the actual amount may hover around 1,300 MW due to some Laotian power plant investors withdrawing from the deal, and others completing their plants only by 2025, as per the Ministry of Industry and Trade.
To compensate for the shortfall, Vietnam is exploring alternative sources, including wind power projects. Laos’s wind power plants are offering over 4,100 MW for sale to Vietnam.
Priced at 6.95 U.S. cents per kilowatt-hour, Laos’s wind power proves more economical than Vietnam’s 8.5-9.8 cents for projects completed by October 2021.
Despite having numerous renewable power plants, Vietnam’s main challenge lies in their concentration in the central and southern regions, while the primary transmission line to the north is already operating at full capacity.
The Vietnam-Laos transmission line, currently capable of handling 300 MW, is expected to increase to 2,500 MW by 2027 with the installation of new lines.