B GRIMM POWER has taken an aggressive move in building and operating hydropower plants in Laos. The company officially opened on Friday the Xanamnoy 2 and Xekatam 1 hydropower plants in Champasak province that shares a border with Thailand’s Northeastern Ubon Ratchathani province.
It is a small scale hydropower plant with capacity of 20.1 megawatts (MWs) building on small rivers in Laos’ Southern Champasak province.
The electricity from this plant supplies the Laos government via its state enterprise Eletricite Du Laos (EDL) under a 25-year power purchase agreement (PPA), that is renewable for another 25 years. A 50-year land lease is also renewable for an additional 50 years.
It is a joint venture between B Grimm Power and SV Group Ltd, a leading engineering company in Laos. B Grimm Power holds 70 per cent equity and SV Group 30 per cent. The total development cost is Bt1.75 billion, according to B Grimm Power.
“Local people are happy with our hydropower plant due to its reliability of electricity supplies to them,” said Harald Link, chairman of B Grimm and B Grimm Power Group.
He said the small-scale runoff river plant has a very minimal impact on forests and the environment due to its very small construction site. Nearby residents will not be displaced, since there is no large water reservoir like occurs with a big dam, Link said.
In addition to this hydropower plant, the company has concessions on seven other hydro power projects with total installed capacity of 113 megawatts.
Their locations include the Nam Che 1 hydropower plant project in Xaisomboun province, Nam Khao 1-5 in Xiangkhouang province, and Tadsakoi in Suvannakhet province, said the company. These seven hydropower plants are expected to be completed and open in 2018, 2019 and 2021.
The seven planed projects do not include the Xekong 4 hydropower plant project. That facility, with an expected capacity of 300-400 MW, is in PPA negotiations with the Electricity Generating Authority of Thailand (EGAT). It would be a dam power-plant in partnership with Ratchaburi Electricity Generating. B Grimm Power would hold 25 per cent of the shares.
The company is also studying investment opportunities in power transmission lines linking Northern, Central and Southern regions of Laos, as well as to other Asean countries.
Link foresees a jump of electricity demand in Laos, Cambodia, Myanmar, Vietnam, Indonesia and the Philippines in the next 10 years.
“Electricity demand in those countries would triple, or more, increasing by 2030 while electricity demand in Thailand may be double,” said Link.
High demand for electricity in those five countries has been driven by their rapid economic growth. For example, the gross domestic product (GDP) of Laos has expanded 8 per cent on average over the past decade, according to World Bank data.
Laos, often touted as the “battery of Asia”, has been leveraging its rich water resources and mountainous areas with spare populations for developing its economy.
The country’s development potential was historically limited by a lack of financial resources and technology. International lenders including Asian Development Bank, Export-Import Bank of Thailand and Thai commercial banks have engaged to provide loans for hydropower plant projects in Laos.
According to the Laos Minister of Energy and Mines, Khammany Inthirath, Champasak province alone has potential to generate electricity from hydropower resources up to 8,000 MW annually.
Laos currently could produce electricity from both hydropower plants and coal firing facilities up to 6,700 MW, and plans to increase that to 14,000 MW by 2025, he said.
The local power industry had estimated that 80 per cent of generated power would be exported to the nearby countries of Thailand, Vietnam, Myanmar, Cambodia and China.
Khammany said 94.2 per cent of the Laos population can now access electricity supplies, and the coverage will reach 98 per cent by 2025.