Lao People’s Democratic Country Reportlcc.ait.asia/publication/Lao_People_s_Democratic_Country... · 2010. 8. 1. · exploitable hydropower potential of Lao PDR is around 23,000

Draft Final Report

PROMOTION OF RENEWABLE ENERGY, ENERGY EFFICIENCY AND GREENHOUSE GAS

ABATEMENT (PREGA)

Lao PDR

Country and Policy Report

May 2006

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Contents

List of Figures..........................................................................................................................4

List of Tables..........................................................................................................................5

List of Abbreviations...........................................................................................................6

Executive Summary................................................................................................................8

1. COUNTRY BACKGROUND.......................................................................................11

1.1 Geography...........................................................................................…....…11

1.2 Population...........................................................................................…........11

1.3 Economy............................................................................................….........12

1.4 Natural Resource...........................................................................................13

1.5 National Poverty Eradication Program and Poverty Reduction Fund.............14

2. ENERGY SECTOR REVIEW.....................................................................................15

2.1 Overview…………..…………………………………............................…..........15

2.2 Energy Resources in Lao PDR………………………………...........................15

2.3 Electricity generation / domestic use / export / and import Energy.................16

2.4 Energy Consumption.……………………........................................................17

2.5 Renewable Energy Resources in Lao PDR....................................................18

2.6 Energy Tariff System…………………………..................................................20

2.7 Lao PDR’s Policy Framework on Energy……....................................….........22

2.8 Institutional Arrangement for Lao PDR's Energy Sector........................….....24

2.9 Organizations Chart of the Power Sector Agencies..................................…..25

3. TECHNICAL POTENTIAL FOR REGA TECHNOLOGIES.........................................27

3.1 Renewable Energy Technologies…......................................…………...…….27

3.2 Energy Efficiency…………………………………………...............................…34

3.3 Greenhouse Gas……………………..………………........................................35

4. REVIEW OF SKILLS AND INSTITUTIONAL CAPACITIES RELEVANT TO REGA

TECHNOLOGIES.......................................................................................................36

4.1 Technical Institutions...............................................................................……36

4.2 Financial Institutions..................................................................................….39

4.3 Non-Government Organizations.....................................................................39

4.4 Donor Agencies..............................................................................................39

4.5 Private Sector Participation............................................................................40

4.6 Government Institutions..................................................................................41

5. POLICY AND INSTITUTIONAL FEATURES IMPACTING REGA TECHNOLOGY……

DISSEMINATION.......................................................................................................41

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5.1 National Poverty Eradication Programme (NPEP)….....................................41

5.2 Rural Electrification Master Plan................................................................….41

6. REVIEW OF SUSTAINABLE DEVELOPMENT PRIORITIES....................................45

6.1 RE Sustainable Development Priorities in Lao PDR..................................... 49

6.2 RE Sustainable Development as Supplied by ADB Lao PREGA Project.......49

6.3 Priorities for Mitigating Greenhouse Gas Emissions...................................…50

6.4 Policy Support for Sustainable Development..........................................……52

7. IDENTIFICATION AND PRIORITIZATION OF REGA TECHNOLOGIES..................60

7.1. GHG Emissions Inventory...........................................................................…60

7.2. Technology Needs and Priorities for Mitigating Greenhouse Gas

Emissions in the Energy Field………................................................……....…….......61

7.3. Optional Ways of the Energy Utilization for Dwelling Sector ......................64

7.4. Technological Options and Reduction of Greenhouse Gas………...……………

Emissions in Transportation Field…………………..................………………..67


Emissions in Agriculture Field……………...................………………… ……..68


Emissions in Forestry Field…………………..................……………………….69


Emissions in the Toxic Waste Field…………………......................…………..71

8. CONCLUSIONS AND RECOMMENDATIONS..........................................................73

8.1. Conclusions………………...........................................................................…73

8.1. Recommendations………...............................................................................74

REFERENCES..............................................................................................................….....76

Attachment…………………………………………………………………………………………..78

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List of Figures

Figure 1.1: General Map of Lao PDR..............................................................……………….11 Figure 2.1: Exploitable Hydropower Potential of Lao PDR……………………………………..16 Figure 2.2: Electricity Generation, Domestic Use, Export and Import up to 2004……17 Figure 2.3: Energy Consumption by Energy Type in Year 2002…………….……………18 Figure 2.4: Energy Consumption by Energy Sectors in Year 2002………………………….19 Figure 2.5: Organizations Chart of the Power Sector Agencies……………………………….26 Figure 3.1: Distribution of Annual Solar Insolation, at the Earth’s Surface…………….28 Figure 5.1: National Poverty Eradication Programme Process………….…………………..42 Figure 5.2: Map of Lao PDR, 72 Districts Identified as Poor…………………………………44 Figure 5.3: Rural Electrification Master Plan Organization……………………………………48

List of Tables Table 1-1: GDP Growth and Inflation Indicator in Lao PDR (2004)……………………………12 Table 1-2: GDP per Electric Consumption and Elasticity in Lao PDR ………………………..12 Table 1-3: Elements of the 2020 Development Vision………………………………………….13 Table 2.1: Primary Energy Resources of Lao PDR…………………………………..…………15 Table 2.2: Electricity Generation, Domestic Use, Export and Import………………………….16 Table 2.3: Importing of Petroleum and City Gas in Year 2003-2004………………………….17 Table 2.4: Energy Consumption Comparison by Energy Type………………………………...18 Table 2.5: Energy Consumption by Sectors……………………………………………………..18 Table 2.6: Historical EDL’s Power Tariff (by Dec. 2001)…………………………………….….20 Table 2.7: New Power Tariff (Effective on May 2002)…………………………………………..20 Table 2.8: Trading Tariffs for Export and Import…………………………………………………21 Table 2.9: Other Import Tariffs…………………………………………………………………….21 Table 2.10: Theun Hinboun IPP Tariffs for Export to EGAT……………………………………21 Table 2.11: Theun Hinboun IPP Tariff for Export to EGAT and EDL………………………….22 Table 2.12: Houy Ho IPP Tariffs for Export to EGAT and EDL………………………………...22 Table 3.1: Average Daily Radiation on Horizontal Surface (kWh/m2/day, 10-year ave.)……27 Table 3.2: Average Daily Wind Speed (m/s)……………………………………………………..29 Table 3.3: Production of Crops (Possible Biofuels) for Year 2003……………………………30 Table 3.4: The Efficient Development of the Electric Light/Lamp……………………………..34 Table 3.5: General Summary of Assessment on the Utilization of the Energy for Lights…..35 Table 3.6: Institutions and their Mandates in the Area of Environment…………………… Including CDM and Climate Change…………………………………………………36 Table 5.1: Elements of the 2020 Development Vision…………………………………………..45 Table 7.1: The National Inventory on the Greenhouse gases Emission………………………60 Table 7.2: General Summary Regarding the Assessment of the Cost …………….…………… of Electric Energy Production………………………………………………………….51 Table 7.3: Biomass Technology Chart……………………………………………………………52 Table 7.4: The Cost Benefit Analysis Regarding Various Cooking Stoves…………..……….54 Table 7.5: The Efficient Development of the Electric Light/Lamp……………………………...54 Table 7.6: General Summary of the Assessment on the Utilization of Energy for Lights…...65 Table 7.7: General Summary of the Assessment on the Recycling Energy Utilization as the

Lights……………………………………………………………………………………66 Table7.8: General Summary of the Methane Gas Reduction (CH4) in Agricultural Field……69

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List of Abbreviations ADB Asian Development Bank ASEAN Association of South East Asian Nations BCS Battery Charging Station BOOT Build, Operate, Own and Transfer BOT Build, operate and transfer BTF Build, transfer and finance CCEAP Climate Change Enabling Activity Project CDM Clean Development Mechanism CFL Compact Fluorescent Lamp CH4 Methane CIDA: Canadian International Development Agency CO Carbon Monoxide CO2 Carbon Dioxide CPC Committee for Planning and Cooperation CTTE Canada-Thailand Tri-bilateral on Environment NAPA National Adoption Program of Action DANIDA Danish International Development Agency DNA Designated National Agency DOE Department of Electricity ECS Electric Cooking Stove EDL Electricité du Laos EE Energy Efficiency EGAT Electricity Generation Authority of Thailand EIAs Environmental Impact Assessments EMP Environmental Management Plan EMMUs Environmental Management and Monitoring Units ESCOs Energy Service Companies FAO Food and Agricultural Organization (of United Nations) FIMC Investment Management and Foreign Economic Co-operation GDP Gross Domestic Product GEF Global Environment Facility GIS Geography Information System GHG Greenhouse Gas GMS Greater Mekong Sub-region GOL Government of Lao PDR HDR Global Human Development Report ICS Improved Cook Stoves IPCC Intergovernmental Panel on Climate Change IPP Independent Power Producer JICA Japan International Cooperation Agency LDC Least-Developed Country LNCE Lao National Committee for Energy LNMC Lao National Mekong Committee LPG Liquefied Petroleum Gas LRMC Long Run Marginal Cost MAF Ministry of Agriculture and Forestry MAT Multiple Aeration Technique MCTPC Ministry of Communication, Transport, Post and Construction MHP Micro-Hydropower MIH Ministry of Industry and Handicrafts MLSW Ministry of Labour and Social Welfare MOC Ministry of Commerce MPH Ministry of Public Health MRC Mekong River Commission

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MSW Municipal Solid Wastes MUB Multi-nutrient Urea Block N2O Nitrous Oxide NASA National Aeronautical and Space Agency NAFES National Agriculture and Forestry Extension Service NDF National Long-Term Development Framework, of Lao PDR NEDO New Energy Development Organization (Japan) NGO Non-governmental Organization NOx Nitrogen Oxide NPEP National Poverty Eradication Programme NREL US National Renewable Energy Laboratory NSC National Statistical Centre NTFP non-timber forest products O&M Operation and Maintenance PAPs Project Affected Persons PDIH Provincial Department(s) of Industry and Handicrafts PEA Provincial Electricity Authority of Thailand PPA Power Purchase Agreement PPAg Power Purchase Agreement PPP Purchasing Power Parity PREGA Promotion of Renewable Energy, Energy Efficiency and Greenhouse

Gas Abatement PRC People’s Republic of China PV Photovoltaic R&D Research and Development RE Renewable Energy REGA Renewable Energy, Energy Efficiency and Greenhouse Gas

Abatement RESDALAO The Renewable Energy for Sustainable Development Association RET Renewable Energy Technology RETC Renewable Energy Technology Centre SHP Small Scale Hydropower Potential SHS Solar Home System SIDA: Swedish International Development Agency SPRE Southern Provinces Rural Electrification Project STEA Science, Technology and Environment Agency SNV The Netherlands Development Organization SWH Solar Water Heater TCD Tons of Crushing per Day UNCED United Nations Conference on Environment and Development UNDP United Nations Development Programme UNEP United Nations Environment Programme UNFCCC United Nations Framework Convention on Climate Change Vientiane Cpt. Vientiane Capital WB The World Bank

Currency Unit

Unless otherwise specified, the term “dollar” refers to US$

Currency = Kip (KN) $1 = KN10,300 KN1 = $0.00009

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Units km Kilometers ha Hectares GJ Giga Joule GWh Gigawatthour ktoe Kiloton of Oil Equivalent kW Kilowatt kWh Kilowatt hour m2 Square meter m3 Cubic Meter MW Megawatt TgC/EJ toe Ton of Oil Equivalent kWh/m2 kilowatt-hours per square meter kWp kilowatt-peak m/s Meter per second

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Executive Summary 1. Lao People’s Democratic Republic (Lao PDR) is a landlocked country in the heart of

Southeast Asia at the centre of the Indochinese peninsula. Lao PDR has eastern border with the Socialist Republic of Vietnam, a western border with the Kingdom of Thailand, a southern border with the Kingdom of Cambodia, a northern border with the People’s Republic of China and a northwestern border with the Union of Myanmar. The country is centrally located in the Greater Mekong Sub-region (GMS) with high rainfall and steep river valleys that are well suited to hydropower generation.

2. Lao PDR is one of the 13 least developed countries in the Asia Pacific Region; it is ranked 135 out of 175 countries in the Global Human Development Report (HDR) 2004. The narrowly based economy is one of the least developed in Asia with an approximate per capita Gross National Product (GNP) of around US$ 370 annum. Real GDP growth over the last few years has been in the range of 5.5 – 6.5 % / year. Lao PDR is the recipient of about US$ 200 million annually in international grant support, which is largely targeted at social and environmental projects designed to alleviate poverty in the country.

3. The National Poverty Eradication Programme (NPEP) is central to the national development agenda. The NPEP encapsulates the essence of the Lao PDR’s approach towards achieving the goal set in 1996 by the 6th Party Congress, namely, exiting the group of LDCs by 2020. The Lao PDR’s long-term national development goal is to be achieved through sustained equitable economic growth and social development, while safeguarding the country’s social, cultural, economic and political identity. The foundations for reaching this goal have been laid during the past 28 years of peace and development in the country by:

Moving consistently towards a market-oriented economy. Building-up the needed infrastructure throughout the country; and Improving the well being of the people through greater food security,

extension of social services and environment conservation, while enhancing the spiritual and cultural life of the Lao multi-ethnic population.

4. Lao PDR is endowed with significant indigenous energy resources, in particular for electricity generation. Hydropower is the most abundant and cost-effective resource for electricity generation. The energy resources range from traditional energy sources such as fuel-wood to coal and hydropower. The forest areas, which cover over 47 % of the total land, are a potential source for substantial traditional energy supplies. The total exploitable hydropower potential of Lao PDR is around 23,000 MW. Major Mekong tributaries are estimated at around 56%, followed by 35% of mainstream Mekong and 9% of the rest of the country. The Lao PDR’s hydropower potential is very considerable and its development offers extensive benefits for the country. Hydropower is a major contributor both direct and indirect to economic output, government revenues and export earnings. However, only 623 Megawatts (MW) has so far been developed.

5. The Government of Lao PDR’s goal is to increase the electrification ratio for the whole country from 41% to 90% by 2020, with intermediate targets of 45% in 2005 and 70% in 2010. This goal will be achieved through:

• On-grid household electrification – involving main transmission / distribution grid extensions to meet the 90% target, after deduction of off-grid installations.

• Off-grid household electrification – an embryonic but successful program of electrification of off-grid households employing state, donor and private resources is underway in Lao PDR and targets electrification of 150,000 households by 2020. However this program will need to be substantially scaled-up, if this target is to be achieved by 2020. Current projections of village and household electrification are as follows:

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Year 2004 2005 2010 2013 2015 2020 No. of Villages Electrified

3,464 3,574 5,584 6,433 7,024 8,906

% of Villages Electrified 31% 32% 50% 58% 63% 80% No. of Households Electrified

395,598 423,122 733,926 858,794 914,894 1,140,396

% of Households Electrified

41% 45% 70% 76% 79% 90%

6. Lao PDR ratified the United Nations Framework Convention on Climate Change (UNFCCC) on 4th April 1995. Awareness about climate change, however, has been stirred in Lao PDR since it participated in the Rio Earth Summit in 1992. The first major climate change activity in the country was the Lao National Greenhouse Gas (GHG) Inventory Project (GEF Climate Change Enabling Activity project, CCEAP) and the capacity building project of GEF implemented through UNDP. The GOL has ratified the Kyoto Protocol on Clean Development Mechanism by February 6, 2003 and the Designated National Agency (DNA) has been established as the Science Technology and Environment Agency.

7. Renewable energy resources will most likely be developed under the direction of MIH and /or EDL, coordination with renewable energy sector organizations is recommended so that their data, experience and expertise can be accessed for the future projects. As well, staff of these organizations may be able to contribute practical experience on appropriate technologies, implementation approaches and pilot projects. The STEA and / or the Technology Research Institute (TRI) of STEA is an important institution for any renewable energy related work, and their staff should be consulted particularly in respect of the biomass energy assessment, but also in respect of mini / micro hydropower, wind power assessments and solar PV energy technologies.

8. It can be said that the financial factor is one of the most important issues that will contribute towards the success of the planning and implementation process in Lao PDR, but the Government has constraints in finance. Based on previous developments, it is indicated that most of the funding sources for energy / renewable energy sectors will come from the loans and grants of multilateral financial organizations and international and local participants into this sector, although these are still limited.

9. There is a lack of Renewable energy / efficiency energy Promotion Fund, lending conditions and procedures are complicated and often changed, Bank/financial organizations lack the necessary capacity to evaluate EE&RE projects, Banks also face high transaction costs due to the smallness of potential EE/RE projects, Credit institutions are hesitant to lend to EE/RE projects due to perceived high risks and long time to recover the investment cost. Renewable energy / efficiency energy financing is feasible but there are risks and barriers that need to be resolved. It requires detailed analyses to be carried out by both the ESCO and the financier. Performance contracts, insurance, owners’ commitments & other safety measures are key elements that enhance its attractiveness over other investment opportunities.

10. The limitation of manpower with the knowledge of know-how, experience and skills in strategic planning and those of implementing the plans. On the contrary, distributing that manpower from ministerial to provincial workplaces is not balanced. In addition, responsibilities among agencies, which are in charge of energy sector, are not clearly described and co-coordinated. The separate energy organizations also mean reduction of efficiency of planning, implementing and managing energy resources. At present, there is only the hydropower sub-sector becoming the main priority for the energy sector, however other energy type sub-sectors are not well determined and not under the single responsibility of any one organization.

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11. Policy options and strategies for increasing the scale and application of energy / efficiency energy sources must take account of the diversity of national circumstances, as well as of technology options. It requires reliable support from the government in the form of incentives. The creation of an enabling policy environment, with appropriate institutional arrangements at the national level, would accelerate the development and wider scale application of new and renewable sources of energy. Available policies in Lao PDR include the following: (i) Linking new and renewable energy policies to sustainable development policies

and to actions consistent with international agreements; (ii) Legal and regulatory policies and frameworks for attracting investment; (iii) Providing a clear policy message to mobilize all key actors and catalyze them into

action.

12. As for the Lao PDR, the socio-economic development must be implemented with efficiency, continuation and stability so as to guarantee the balance between the economic growth and the social and cultural development as well as the eternally sustainable environmental protection. Consequently, the utilization of advanced technology is considered which needs to be developed and resolved to suit the real situation of each field of work.

13. In order to achieve the above-mentioned issues for supporting the additionally technical know-how, capacity and expertise of the technocrats; hence, the staff must be supported and promoted. To take for example, it is essential to make use of all-existing technocrats’ competency so as to systematically train them in the environmental field as well as carefully set plans of human resource development within this field of work. It is urgently necessary to guarantee providing the fund for the environmental protection. Thus, one of the most important things is to raise money for the contribution for the National Environmental Fund simultaneously in an attempt to not only search for the financial assistance from the friendly international agencies, but also to better promote the bilateral and multilateral cooperation.

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1. COUNTRY BACKGROUND 1.1 Geography

Lao People’s Democratic Republic (Lao PDR) is a landlocked country in the heart of Southeast Asia at the centre of the Indochinese peninsula between latitude 13-23 degrees north and 100-108 degrees east. Lao PDR has eastern border of 1,957 kilometres (km) with the Socialist Republic of Vietnam, a western border of 1,730 km with the Kingdom of Thailand, a southern border of 492 km with the Kingdom of Cambodia, a northern border of 416 km with the People’s Republic of China (PRC) and a north-western border of 230 km with the Union of Myanmar. The country is centrally located in the Greater Mekong Sub-region (GMS) with high rainfall and steep river valleys that are well suited to hydropower generation. The climate is monsoonal, bringing rain from May to September and a dry season from November to February.

The topography of the nation is mostly mountainous ranging from 200 to 2820 metres (m) with mountains covering about two-thirds of the land area. The country is crisscrossed by a number of rivers, including a1856 km stretch of the Mekong, which defines its border with Myanmar and a major part of border with Thailand.

The country’s situation provides a land link to all of the countries in the region. It connects its five neighbours to each other and has the potential to be a valuable transportation link. Two main geographical zones characterize Lao PDR: the central plains along the Mekong River and the mountainous regions to the north, east and south. The major cities are Vientiane Capital, Savannakhet, Pakse and Luang Prabang. The administrative system of the country includes about 11,000 villages in 142 districts in 16 provinces, 1 capital city (Vientiane Capital) and 1 special zone (Xaysomboun). 1.2 Population As of 2004, Lao PDR had a population of approximately 5.6 million people with a population growth rate of 2.7% per year. Buddhism is the dominant religion with more than 85% of the population as believers. The official language of the Lao PDR is Lao. The adult literacy rate is 62% and life expectancy at birth is 57 years for males and 61 years for females. The population comprises three main ethnic groups: the Lao Loum (Low land) with 68%, the Lao Theung (Low mountains) with 22%, and Lao Sung (High mountains) with 10%. The

Figure 1.1: General Map of Lao PDR

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population density is 23 persons per square kilometre (km2) and roughly 85% of the population lives in rural areas. Education is compulsory through age 12. The education system is organized with five years of primary education starting at age six, three years of middle, and three years of high school; secondary education is offered with 5 years of undergraduate level (Bachelor Degree). University enrolments have been expanding rapidly over the past decade. 1.3 Economy Since the late eighties, economic policy has moved the country from a centralized, planned economy toward an open, liberalized, market-oriented economic system. Gross Domestic Product (GDP) has been growing annually at 4% to 7% since the 1997 Asian economic crisis and the economy is expected to continue on this trajectory for the next few years. With the opening of foreign exchange markets and lifting of formal exchange controls, the Lao currency (kip) now floats freely with its value based on supply and demand. As a result of the Asian economic crisis in 1997 and other local and regional economic influences, the Lao currency (kip) devalued from about US$ 1.00 = 726 kips in the mid-nineties to its present value of around US$ 1.00 = 10,820 kips. Although being a landlocked country inhibits the potential for international trade, Lao PDR has a comparative advantage due to its considerable hydropower energy resources and its common borders with Thailand, Viet Nam, PRC and Cambodia. Lao PDR, at its present stage of development, has few industries in which it enjoys a comparative advantage in the region. The most important of these is the generation of electricity based on Lao PDR’s large, almost untapped, energy reserves, principally hydropower, and a central location in a region characterized by expanding electricity demands. Lao PDR is one of the 13 least developed countries in the Asia Pacific Region; it is ranked 135 out of 175 countries in the Global Human Development Report (HDR) 2004. The narrowly based economy is one of the least developed in Asia with an approximate per capita Gross National Product (GNP) of around US$ 370 per annum. Agriculture provides about 50 % of the GNP. Real GDP growth over the last few years has been in the range of 5.5 – 6.5 % / year. External debt as a percentage of GDP has risen, but is thought to have peaked and a decline is predicted from 2005. The trade balance is stable and the current account deficit as a percentage of GDP is therefore also expected to decline. Lao PDR is the recipient of about US$ 200 million annually in international grant support, which is largely targeted at social and environmental projects designed to alleviate poverty in the country. Table 1.1: GDP Growth and Inflation Indicators in Lao PDR (2004)

Indicators

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Real GDP Growth (%)

7.0 6.8 6.9 4.0 7.3 5.7 5.5 5.8 6.0 6.5

Average Inflation (%)

25.7 7.3 26.6 142 86.5 30.0 7.8 10.6 N/A N/A

Source: Committee for Planning and Cooperation (CPC), Vientiane Capital, Lao PDR, 2004. Table 1.2: GDP per Electric Consumption and Elasticity in Lao PDR

Year GDP (Million Kip)

Consumption (GWh)

% Change of Consumption

% Change of GDP

GDP Elasticity of Electricity

2000 13672336 626.346 - 2001 15704870 710.33 13.41 14.87 0.90 2002 18390375 766.738 7.94 17.10 0.46 2003 22536107 883.738 15.26 22.54 0.68 2004 N/A 902.762 2.15 N/A N/A

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External debt as a percentage of GDP has risen, but is thought to have peaked and a decline is predicted 2005. The National Long-Term Development Framework (NDF)1 builds on progress since 1975 to realize the Government’s goal of poverty eradication by 2020. The NDF incorporates the guidelines of the 6th and 7th Party Congresses (1996 and 2001, respectively). Table 1.2 provides a summary of the main elements of the NDF, including the long-term development indicators regarding living standards of the Lao multi-ethnic population. The main objectives and targets for the period 2001-2010 and for 2001-2005 are also presented. The National Poverty Eradication Programme (NPEP) is the NDF’s operational format. Table 1.3: Elements of the 2020 Development Vision

Indicators

2000 2005 2010 2015

Total population (million) 5.2 5.9 6.6 8.2 Population growth rate (%) 2.6 2.5 2.3 2.2 GDP growth rate (%) 5.8 7.0 7.0 7.0 - Agriculture (%) 4.9 4.5 4.2 3.8 - Industry (%) 8.5 10.0 10.0 8.5 - Service (%) 5.0 10.0 10.0 9.0 Life expectancy at birth (years) 59 63 67 70 Adult literacy over 15 years (%) 70.0 78.0 84.0 90.0 Total education enrolment rate 70.2 85 90 95 Infant mortality under 5 (per 1,000 live births) 82 62 40 20 Maternal mortality (per 100,000 live births) 530 350 250 130 Access to clean water (% of population) 52 57 100 100 Source: Committee for Planning and Cooperation (CPC), Vientiane Capital, Lao PDR, 2000. 1.4 Natural Resources Around 70% of its terrain is mountainous, reaching a maximum elevation of 2,820 metres at Phou Bia (Bia Mountain) in the Xiengkhouang province. The landscape of northern Laos and the regions adjacent to Vietnam in particular, are dominated by hills. Although the country has no direct access to the sea, but it has an abundant of rivers, including a 1,856 kilometres stretch of the Mekong, defining its border with Myanmar and a major part of its border with Thailand. Within the Mekong basin, the rivers most important for meeting the government’s development objectives are Nam Tha, Nam Beng, Nam Ou, Nam Souang, Nam Khane, Nam Houng, Nam Nam Ngum, Nam Ngiep, Nam San, Nam Theun, Nam Hinboun, Se Bang Fai, Se Bang Hieng, Se Bang Nouane, Sedone and Sekong. Lao PDR is abundant in natural resources like water, forests and minerals. The country has abundant surface and groundwater resources. It has a per capita availability of 66000 cubic metres and despite expected increase in future demands; there are no expected water problems in the foreseeable future. The mountainous terrain, combined with a large river network, provides a large hydroelectric power generation potential, which has barely been tapped. Forest resources are an important source of income, construction material, fuel wood, and other non-timber products in the Lao PDR. They also contribute significantly to the foreign exchange earning of the country. The total forest are of the Lao PDR is 11.17Mha (million hectares), covering 47% of the total land area. Over the last two decades forest areas have decreased due to shifting cultivation practices, poorly planned logging activities, and forest fires.

1 Source: National Poverty Eradication Programme, Vientiane Capital, Lao PDR, September, 2003

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The country has an abundance of mineral resources such as gold, copper, ferrum, limestone, gypsum, lead, and tin, which have so far been little exploited due lack of resources for development and limited infrastructure to access the resources. 1.5 National Poverty Eradication Program and Poverty Reduction Fund

The National Poverty Eradication Programme (NPEP) is central to the national development agenda. The NPEP encapsulates the essence of the Lao PDR’s approach towards achieving the goal set in 1996 by the 6th Party Congress: that is, exiting the group of Least-developed countries (LDCs) by 2020. Lao PDR’s long-term national development goal is to be achieved through sustained equitable economic growth and social development, while safeguarding the country’s social, cultural, economic and political identity. The foundations for reaching this goal have been laid during the past 28 years of peace and development in the country by:

(i) Moving consistently towards a market - oriented economy; (ii) Building-up the needed infrastructure throughout the country, and; (iii) Improving the well being of the people through greater food security, extension of

social services and environment conservation, while enhancing the spiritual and cultural life of the multi-ethnic population.

The 7th Party Congress (March 2001) defined the following guidelines for poverty eradication and sustainable economic growth:

The socio-economic development of the country must be balanced between the three

pillars of economic growth, socio-cultural development and environmental preservation.

Socio-economic development must be based on sound macro-economic management and institutional strengthening and must be harmoniously distributed between sector and regional development, and between urban and rural development, so as to fully and efficiently utilize human and natural resources.

Lao PDR must combine The national development potential and strengths with regional and global opportunities in order to enable participation in regional and international economic integration.

Socio-economic development must be closely linked with national security and stability.

Within these guidelines, the main objectives of the long-term development strategy include:

a) Sustaining economic growth at an average rate of about 7 per cent (to triple the per-capita income of the multi-ethnic Lao population by 2020);

b) Halving poverty levels by 2005 and eradicating mass poverty by 2010, and; c) Eliminating opium plantation in remote area by 2005 and phasing-out shifting

cultivation by 2010.

2. ENERGY SECTOR REVIEW 2.1 Overview

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The Lao power sector is still in its infancy with only 38% of the population2 having access to electricity. The sector has the potential to play a pivotal role in achieving the social and economic development objectives of the Government of Lao PDR (GOL) by expanding the availability of low cost, reliable electricity within the country and earning foreign exchange from export sales to the region. GOL power sector policy facilitates these objectives by encouraging optimal use of the country’s natural resources, promoting efficiency in power sector institutions and creating a conductive environment for responsible infrastructure investment, both public and private. 2.2 Energy Resources in Lao PDR Lao PDR is endowed with significant indigenous energy resources, in particular for electricity generation. Hydropower is the most abundant and cost-effective resource for electricity generation. The energy resources range from traditional energy sources such as fuel-wood to coal and hydropower. The forest areas, which cover over 47 % of the total land, are a potential source for substantial traditional energy supplies. The table below shows the primary energy resources of Lao PDR. Table 2.1: Primary Energy Resources of Lao PDR

Resource Reserves Potential for Use in Power Generation

Oil and Gas

Three exploration concessions in central and southern Lao PDR. Mapping and geophysical investigations carried out, including one deep drill hole (2,560 m). Results not yet evaluated

Possibly in the longer term (10-15 years), if sufficient reserves found

Coal (Lignite)

Major resource located at Hongsa in northwest Lao PDR. About 810 million tons proven reserve, of which over 530 million tons is deemed economically recoverable. Energy content 8-10 MJ/kg, relatively low sulfur content of 0.7-1.1%

Sufficient reserves for about 2,000 MW installed capacity

Coal (Bituminous and Anthracite)

Reserves, mainly anthracite, dispersed in various fields throughout Lao PDR. Exploration ongoing. Total proven reserve to date about 100 million tons. Energy contents 23-35 MJ/kg.

Current annual production of 130,000 tons, used for local factories or export. Possible longer-term option for around 500 MW installed capacity, depending on results of exploration.

Solar Annual solar radiation received in Lao PDR about 1800 kWh/m2, possibly less in mountain areas. Corresponds to conditions in southern Europe (Italy, Spain).

Photovoltaic modules already used for small-scale (e.g. 100 W) remote applications. Current costs of large-scale photovoltaic power (around US$ 0.50 per kWh) make large plants infeasible.

Wind Mean wind speeds at Luang Costs in areas of less than 4 m/s 2 Source: Hydropower Office, Department of Electricity, Ministry of Industry and Handicrafts, Vientiane Capital, Lao PDR, 2005

16

Prabang and Vientiane around 1 m/s, in mountain areas likely to be somewhat higher.

likely to be in upper end of range US$ 0.05-0.25 per kWh, hence limited potential

Geothermal No significant known reserves. Limited potential for power generation

Biomass (waste)

Biomass resources dispersed throughout the country.

Current share of biomass (mainly wood fuel) in total energy consumption about 88%. Wood-fired cogeneration (heat and power) plants could be economic for self-supply in wood processing facilities

Hydropower Average annual precipitation about 2,000 mm. Total runoff around 240,000 million m3. Theoretical hydropower potential of 26,000 MW (excluding mainstream Mekong).

Exploitable hydropower potential, including share of mainstream Mekong, around 23,000 MW.

Figure 2.1: Exploitable Hydropower Potential of Lao PDR

Figure 2.1 represents the share of exploitable hydropower potential of the country. The total exploitable hydropower potential of Lao PDR is around 23,000 MW. Major Mekong tributaries, is estimated at around 56%, and followed by 35% of mainstream Mekong and 9% of the rest of the country.

2.3 Electricity generation / domestic use / export / and import The power demand increases by 8-10% annually. In 2002, energy generation was 3604 GWh annum of which 767 GWh was for domestic use and 2798 GWh was for export to Thailand. However, Lao PDR also imported power energy from neighboring countries to provide power supply to border communities. The power energy consumption was 173 kWh per capita. Table 2.2: Electricity Generation, Domestic Use, Export and Import (kWh/year)

Year Generation Domestic Use Export Import 1998 2,156,619,542 513,272,507 1,613,448,685 142,283,8401999 2,806,272,537 565,546,838 2,228,816,655 172,197,1302000 3,438,381,570 626,346,000 2,792,838,789 180,167,0002001 3,653,660,230 710,330,142 2,871,413,817 183,802,5492002 3,604,109,207 766,738,823 2,798,343,351 200,797,0002003 3,178,201,652 883,738,983 2,284,638,513 229,343,5542004 3,347,625,644 902,762,784 2,424,685,423 277,588,003

Source: Department of Electricity, MIH, Vientiane Capital, Lao PDR.

Exploitable Hydropow er Potentia l

35%

56%

9% Mainstream Mekong

Major MekongTributaries

Rest of the Country

17

Table 2.2 above, shows the electricity generation, domestic use, export and import of electricity, and Figure 2.2 represents its generation, domestic use, export and its import for the year 2004. Figure 2.2: Electricity Generation, Domestic Use, Export and Import up to 2004, (kWh/year)

2.4 Energy Consumption The petroleum energy is totally imported and its average consumption is 143 million litres per annum (period 1992-2000). With regard the energy supply available for consumption, in fiscal years 1995-2000 increased by 25% in average of total energy consumption and in the period 2000-2002 was increase from 146.6-175.95 million liters and about 9.5% increased annually. Table 2.3: Importing of Petroleum and LPG Gas in the Period 2003-2004

Total Importing In the Period 2003-2004

No.

Company

Names Total Amount (litre) Total Cost (US$) I Petroleum 357,760,827.00 88,276,732.00 1 Lao State Fuel Company 148,360,450.00 35,653,624.002 Shell Company 96,298,540.00 23,100,745.003 Caltex Lao Co. Ltd. 66,768,301.00 19,554,323.004 Vientiane Petroleum State Company 10,879,682.00 3,206,754.005 Houakhong Trading Co., Ltd. 13,786,910.00 3,032,767.006 Saysavang Lublicating Oil Factory 21,666,944.00 3,728,519.00

II LPG Gas 2,088,214.00 823,479 1 Lao State Fuel Company 381,060.00 156,832.002 Prasansack Gas 608,500.00 242,103.003 Bounnam Gas Factory 664,154.00 263,100.004 Sun Gas Company 434,500.00 161,444.00

Source: Department of Electricity, MIH, Vientiane, Lao PDR. The fossil fuel for energy generation is very low but the transport sector is the largest user of fossil fuel, while it is anticipated that commercial energy use is expected to increase as result

Electricity Generation, Domestic Use, Export and Import

0500,000,000

1,000,000,0001,500,000,000

2,000,000,0002,500,000,000

3,000,000,0003,500,000,000

4,000,000,000

1998 1999 2000 2001 2002 2003 2004

GenerationDomestic UseExportImport

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of population growth3. The LPG gas imports are mostly in bulk of 8 or 16 tons. But merchants in provinces at the border with Thailand and Vietnam also import full cylinders and this increased from 1.07 ktoe in 1999 to 1.37 ktoe in 2002 for an average growth of around 8.5% a year. Table 2.4: Energy Consumption Comparison by Energy Type

Energy Consumption (ktoe) Year Electricity Petroleum LPG

Gas Coal Fuel

Wood Charcoal Saw

Dust 1996 84.38 590.30 1.76 21.75 847.46 179.40 4.121997 96.33 895.63 2.68 11.34 868.65 183.70 3.831998 114.00 561.62 1.60 13.76 890.36 187.90 3.561999 125.65 339.56 1.07 16.33 912.60 192.40 3.312000 179.70 301.20 1.37 53.03 930.80 197.10 N/A2001 199.00 325.70 1.37 30.45 949.50 201.60 N/A2002 212.50 301.20 1.37 53.03 1031.50 211.40 N/A

Covered 11.74% 16.63% 0.08% 2.93% 56.96% 11.67% Source: Department of Electricity, MIH, Vientiane, Lao PDR. Most of the population depends primarily on biomass (Fuel wood) for its domestic energy needs and on petroleum product imports for its commercial energy requirements. As much as 69% of the average energy use is covered by fuel wood, using wood fuel of about 0.75 cubic metres (cm3) per capita per year, approximately 2.4 million tones per year. In 2001-2002 the total energy consumption increased by 6%, primary energy supply totaled 1811 ktoe per year, over 69 % being covered by biomass (fuel wood and charcoal). Figure 2.3: Energy Consumption by Energy Type in Year 2002

Figure 2.3 illustrates the percentage of energy consumption by type in year 2002. The major energy consumption is fuel wood, which estimated at around 56% of the total. Fuel wood is followed by petroleum, which is estimated at around 17%, while electricity and charcoal are at the same rate at 12%. The lowest of energy consumption are

coal with 3% and city gas with 0.08%.

Table 2.5: Energy Consumption by Sectors

Total Industrial Sector

Agricultural Sector

Commercial Sector

Residential Sector

Transportation Sector Year

(ktoe) (ktoe) (%) (ktoe) (%) (ktoe) (%) (ktoe) (%) (ktoe) (%) 1995 1,344.31 155.80 11.59 14.20 1.06 8.62 0.64 777.09 57.81 388.60 28.911996 1,662.89 184.74 11.11 14.71 0.88 9.04 0.54 798.51 48.02 655.89 39.441997 2,090.33 246.45 11.79 16.57 0.79 11.05 0.53 821.12 39.28 995.14 47.61 3 Source: Ministry of Commerce, Vientiane Capital, Lao PDR

Energy Consumption by Energy Type

Electricity12%

Petroleum17%

LPG Gas0%

Coal3%

Fuel Wood56%

Charcoal12%

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1998 1,786.13 280.20 15.69 20.56 1.15 13.79 0.77 847.55 47.45 624.02 34.941999 1,594.40 307.56 19.29 21.33 1.34 15.45 0.97 872.77 54.74 377.29 23.662000 1,667.04 314.86 19.15 22.75 1.34 17.78 1.04 900.45 53.10 411.20 24.252001 1,704.62 319.04 18.00 25.23 1.42 18.48 1.04 913.50 51.56 438.37 24.172002 1,810.33 367.60 20.30 27.31 1.50 19.90 1.09 920.30 50.83 475.22 26.25Source: Department of Electricity, MIH, Vientiane, Lao PDR. The energy consumption can be divided into the energy categories of energy consumers which considered are industrial, agricultural, residential, transportation and commercial sectors. Table 2.4 shows the historical data of the share of domestic energy consumption by categories during 1995–2002, and Figure 2.4 represents their percentage share in year 2002.

Figure 2.4: Energy Consumption by Energy Sectors in Year 2002 2.5 Renewable Energy Resources in Lao PDR Available renewable energy resources in Lao PDR generally include solar power (for water heating and solar photo-voltaic for electricity generation), hydropower (including pico village, micro, mini, small, medium and large), wind power and biomass. Of these:

Solar PV and mini/micro hydropower have the highest potential and applicability in Lao PDR.

Village hydro systems have been promoted under the Off-Grid Promotion and Support Program (run by DOE) over the last 2-3 years. However uptake of village hydro systems to date has been poor and this technology is not expected to be a major contributor to rural electrification within the country.

Pico hydro usage is common in some areas of the Northern provinces, but this technology is usually abandoned upon the arrival of more robust electrification systems.

Biomass generation systems have not yet been developed (apart from a trial installation at the Renewable Energy Technology Centre). However, a significant list of potential resources (mainly utilizing wastes from pig farms and sawmills) has been developed as part of this assignment.

Wind resources are generally poor, except (possibly) in some areas of the central provinces (along the border with Vietnam).

Geothermal resources in Loa PDR are essentially un-explored and while some surface geothermal activity is found, these manifestations are small. We conclude, therefore those geothermal resources are unlikely to be a significant contributor to renewable energy generation in the country, at least in the medium-term.

2.6 Energy Tariff System

Energy Consumption by Setors in Year 2002

20%

2%

51%

26%1% Industrial Sector

Agricultural SectorResidential SectorTransportation SectorCommercial Sector

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The Government should approve being regulated in the Electricity Law of the country, the power tariff of domestic and export/import.

2.6.1 Domestic Power Tariff System

The following tables are the historical and increasing EDL’s power tariff per kWh by the end of the year 2001. The Government decided to apply the following new tariff system with monthly rate increase of 2.3% from May 2002 by the year 2005, on the basis of examination of a foreign consultant. The consultant also estimated Long Run Marginal Cost (LRMC) at customer’ end to be 741 kips/kWh. The Government is still to set a subsidy for irrigation, industrial and handicraft and governmental agencies sectors.

Table 2.6: Historical EDL Power Tariff (by Dec. 2001) (Tariff Unit Kip/kWh)

Category 1998 Jan 1999 Jun 2000 Dec 2000 Dec 2001 Residence

1~50 kWh 51~100 kWh

101~200 kWh 201~500 kWh

More than 500 kWh

10.521.031.584.063.0

15.831.547.378.8

126.0

3269

104225

-

39 88

132 287

-

56133200433

-Industry & handicraft 63.0 94.5 208 265 400Commercial & business 84.0 126.0 257 316 450Entertainment 105.0 157.5 321 395 563Irrigation 26.3 39.4 87 110 167Governmental Agencies

63.0 94.5 208 265 400

Diplomacy & foreigners US$ 0.095 US$ 0.095 US$ 0.0969 US$ 0.0969 US$ 0.0988Source: EDL, System Planning Office

Table 2.7: New Power Tariff (Effective on May 2002) (Tariff Unit Kip/kWh)

Rates Forecasted Category May 2002

Increasing Monthly

Rate May 2003

May 2004

May 2005

Residence 1~50 kWh 51~150 kWh

More than 151 kWh

64150433

2.3% 2.3% 2.3%

84197569

110 259 747

145340982

Industry & handicraft 360 2.3% 473 621 816Commercial & business 468 2.3% 615 808 1,061Entertainment 620 2.3% 815 1,070 1,406Irrigation 167 2.3% 219 288 379Governmental Agencies 400 2.3% 525 690 907Diplomacy & foreigners US$ 0.099 US$ 0.095 US$ 0.0969 US$ 0.0969 US$ 0.0988Source: EDL, System Planning Office

2.6.2 EDL’s Export and Import Tariff

The tariffs for energy export and import have been determined through regular negotiation with the related authorities of Thailand and Vietnam. The common export/import rates are applied to the trade with EGAT of Thailand for the Nam Ngum/Nam Leuk, Savannakhet and Thakhek systems.

Table 2.8: Trading Tariffs for Export and Import

Hour Export to EGAT Import from EGAT Peak Time

(18.30-21.30) 1.22 Baht/kWh 1.41 Baht/kWh

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Off-Peak Time (21.30-18.30)

1.14 Baht/kWh 1.33 Baht/kWh

Source: EDL, System Planning Office Remark: - Tariffs of the off-peak time are applied for the whole day on Sunday

- Payment is made in US Dollar (50% by a fixed rate of US$ 1= Baht 38, and 50% by an exchange rate on paying date)

The tariffs were agreed in “Power Purchase/Sale Agreement between Electricity Generation Authority of Thailand (EGAT) and EDL” on December 13, 1999 and are effective from October 1, 1999 to September 30, 2003.are as the table above:

As seen in the table above, the import tariff are set at approximately 16% to 17% higher than those rates for export to EGAT.

As below, the import tariffs from Provincial Electricity Authority of Thailand (PEA) and Vietnam are set further higher rate as EGAT.

Table 2.9: Other Import Tariffs

Hour Energy Tariff Demand Charge Import from PEA of Thailand to

Bokeo and Ken Thao Peak Time (9.00-22.00)

Off-Peak Time (22.00-9.00)



Import from Vietnam to

Huaphanh and Bolikhamxai

0.04-0.06.US$/kWh

Source: EDL, System Planning Office)

2.6.3 IPP Tariff for Export to EGAT and EDL

Power rate for IPP projects are determined project by project through negotiation between EGAT and respective power supply consortium. Upon conclusion of negotiation, a Power Purchase Agreement (PPAg) is signed:

(1) Theun Hinboun IPP: the PPA’s of Theun Hinboun and EGAT stipulate their trading tariffs in the table below.

Table 2.10: Theun Hinboun IPP Tariffs for Export to EGAT

Manners Tariffs a Pre-commercial operation 0.0341 US$/kWh b After 1st unit commissioned 0.0390 US$/kWh compounded annually by 3%

increase c After fully commissioned to 10th

contract year The rate of the year being compounded annually by 1% increase

d After 11th contract year To be negotiated Source: EDL, System Planning Office And EDL’s purchasing tariff from the Theun Hinboun IPP for domestic supply is set at a lower rate than that to EGAT with some discount. The tariffs since its commercial operation to date were as table below.

Table 2.11: Theun Hinboun IPP Tariff for Export to EGAT and EDL

Year Tariff to EGAT Tariff to EDL 1998 4.84 US cent/kWh 3.86 US cent/kWh 1999 4.88 US cent/kWh 3.97 US cent/kWh 2000 4.92 US cent/kWh 4.08 US cent/kWh

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2001 4.97 US cent/kWh 4.78 US cent/kWh 2002 5.02 US cent/kWh 4.83 US cent/kWh

Source: EDL, System Planning Office

(2) Houy Ho IPP: trade is made under the similar conditioned agreement between EGAT and IPP.

Table 2.12: Houy Ho IPP Tariffs for Export to EGAT and EDL

Year Tariff to EGAT Tariff to EDL 1999 4.89 US cent/kWh 4.96 US cent/kWh 2000 4.98 US cent/kWh 4.08 US cent/kWh 2001 5.06 US cent/kWh 2.25 US cent/kWh 2002 5.15 US cent/kWh N/A 2003 5.24 US cent/kWh N/A

Source: EDL, System Planning Office 2.7 Lao PDR’s Policy Framework on Energy 2.7.1 Electricity Law The Electricity Law which became effective on 29 August 1997, sets out the regime for the administration, production, transmission and distribution of electricity, including export and import, through the use of a productive natural resources potential to contribute to the implementation of the national socio-economic development plan and to upgrade the living standards of the people (Article 1). Amongst other things it provides a suitable framework for the promotion and implementation of rural electrification. With respect to concessions for electricity activities, it is stipulated that investment is by the state solely or with foreign parties. Co-operative investments are allowed. Modalities may be:

• Build, operate, own and transfer (BOOT), • Build, operate and transfer (BOT), • Build, transfer and finance (BTF), • Operation by the State Electricity Company, • Some other form.

However, in the section relating to concessions, the law stipulates that small-scale hydro generators under 2 MW, and thermal electricity generators under 500 kW, are exceptions to concession applications. As the majority of rural electrification projects will be under 2 MW (or under 500 kW in the case of diesel generators), concessions for such projects will not generally be required. The law stipulates that MIH, the provincial and district authorities and the village administrative authorities have coordinating and supervisory duties and rights. Electrification projects between capacities of 100 kW and 2 MW are handled by the respective PDIH (with approval from MIH), and projects under 100 kW are handled at the district authority level (with approval from PDIH / MIH). In village schemes (generally less than about 10 kW), the village chief has the right and duty to facilitate parties who are undertaking electricity enterprises. This represents current practice, in that small entrepreneurs (ESCOs) use solar PV, thermal diesel and micro hydro generators for very small commercial distribution networks, operated as private investments, presumably with district authorization through the village chief. These systems assign operational control and ownership to customers and to village scheme managers.

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In rural areas generally, DOE undertakes surveys, while the provincial and district authorities may give approvals after referral to DOE/MIH. The provincial authorities, DOE/MIH, or private parties may undertake construction for transfer later or thereafter to the provincial authorities. No mention is made specifically of operational aspects or which types of parties can operate systems. The law stipulates that electricity pricing is specific to several types of electricity supply, one of which is rural and remote area supply. Prices are subject to socio-economic conditions. The Government agrees to and approves pricing levels for each type of electricity supply, allowing for periodic revisions of these levels. The law stipulates that an off-grid fund may be established by the State, financed from various sources, including the State, the people, and foreign or domestic assistance. The State may have a policy of reducing or exempting equipment, operation, and vehicles, from taxes and duties in order to facilitate off-grid development. 2.7.2 Power Sector Policy Power sector policy is outlined in the Government’s Power Sector Policy Statement, September 2000 (revision 4). The main power sector priorities are to:

(i) Maintain and expand an affordable, reliable and sustainable electricity supply in Lao PDR to promote economic and social development.

(ii) Promote power generation for export to provide revenues to meet the Government’s development objectives.

(iii) Develop and enhance the legal and regulatory framework to effectively direct

and facilitate power sector development.

(iv) Reform institutions and institutional structures to clarify responsibilities, strengthen commercial functions and streamline administration.

2.7.3 Other Relevant Laws, Policies and Regulations A program of legislative reform has been in progress in Lao PDR for more than a decade, aimed at creating amongst other things a legal environment that encourages investment in the country. In addition to the Electricity Law (1997) already discussed, relevant legislation includes the:

• Law on Foreign Investment (1988) • Contract Law (1990) • Commercial Bank and Financial Institutions Act (1992) • Customs Law (1994) • Labor Law (1994) • Business Law (1994) • Law on the Promotion and Management of Foreign Investment (1994) • Secured Transaction Law (1994) • Water & Water Resources Law (1996) • Environmental Protection Law (1999) and the • Rules for Consideration and Approval of Foreign Investment Projects in Lao PDR

(2002). 2.8 Institutional Arrangement for Lao PDR's Energy Sector Lao PDR potentially offers great opportunities for development of hydropower due to one of the top priorities of the GOL being to develop electricity project, especially the hydropower

24

generation for domestic consumption to meet the requirement of energy demand within the country and also to export electricity and thus earn foreign exchange to achieve GOL‘s socio-economic development objectives. The outline of perspective plan (Vision for 2020, Strategic 2010 and Action Plan 2003-2005) applies as follows. Relevant line ministries and organizations manage the institutional arrangement for Energy Planning-the energy sub-sector in Lao PDR, namely:

The petroleum and gas under Ministry of Commerce (MOC), Electric Power including New and Renewable Energy and Coal under Ministry of

Industry and Handicrafts, Fuel-wood under Ministry of Agriculture and Forestry,

At the energy sub-sector:

The Ministry of Commerce is responsible for entire petroleum and gas sector planning for commercial aspects,

The Department of Electricity, Ministry of Industry and Handicrafts is in charge of the power sector strategic planning which includes hydropower and The Department of Geology and Mining, Ministry of Industry and Handicraft is responsible for Coal.

The Department of Forestry, Ministry of Agriculture and Forestry is responsible for overall supervision of the fuel-wood sector planning, in addition to its main forest sector planning.

The Science, Technology and Environment Agency, Technology Research Institute is responsible for research on sustainable utilization of natural resource (including New and Renewable Energy).

At National Level: The Committee for Planning and Co-operation is the high-level government organization responsible for coordinating with different economic sectors in formulating sect-oral plans and in compiling and consolidating the national development plan. The Lao National Committee for Energy acts as the Government Agency with powers to manage the development and marketing of the electricity across the whole country. 2.8.1 Ministry of Industry and Handicrafts (MIH) The overall responsibility for power sector development rests with the Department of Electricity within MIH. Policies and strategies for IPP development are formulated jointly with the Committee for Investment Management and Foreign Economic Co-operation (FIMC). Under Article 43 of the Electricity Law, MIH has the main duties of preparing strategic power sector plans; collecting and processing data on electricity generating potential; preparation of regulations regarding generation and transmission development; preparation of recommendations on tariff levels for submission to GOL; administration and inspection of electricity enterprises; and liaison with “foreign parties” in seeking funding for electricity sector development. Department of Electricity (DOE) acts as the focal unit for many of the Ministry’s duties relating to generation and transmission planning and development, including strategic power sector planning; IPP project identification, planning, and evaluation; development of hydropower projects with an installed capacity between 2,000 and 5,000 kW; technical support to provincial authorities in developing hydropower projects with installed capacities less than 2,000 kW; review environmental studies and monitoring of environmental impacts related to hydropower development.

25

2.8.2 Committee for Planning and Cooperation (CPC) CPC administers and regulates foreign and domestic investment management and promotion in Lao PDR at Prime Ministerial level. The committee includes the Minister of Industry & Handicrafts and Minister of Finance. By providing a single link between the sponsor and GOL, CPC simplifies and guides the initial project approval processes for project sponsors seeking a concession (i.e. a license). MIH, STEA, Ministry of Finance, Ministry of Justice and other relevant agencies provide advice in their areas of competence to assist CPC in its decision-making. 2.8.3 Science, Technology and Environment Agency (STEA) STEA is the main co-coordinating agency for environmental planning and management across all sectors. Its responsibilities are set out in Article 36 of the Environmental Protection Law and include establishment of strategies for implementing environmental policy; issue or revoke licenses of organizations engaged in providing environmental services; receive and evaluate Environmental Impact Assessments (EIAs) and other environmental reports from sponsors of development projects; and regulation of agencies to curtail or modify activities that are having an adverse impact on the environment. 2.8.4 Lao National Committee for Energy (LNCE) LNCE acts as a GOL agency with powers to manage the development and marketing of electricity across the whole country “to ensure effective implementation of strategic plans for energy and electric power development in Lao PDR”. It negotiates on behalf of GOL and reports to it on matters concerning investment in power projects, regional grid interconnection; export sales of electricity and contracts with project sponsors. Its responsibilities are also reported as including the promotion of investment in the power sector and meeting market demand for power in neighboring countries. 2.8.5 Electricité du Laos (EDL) EDL is a state-owned corporation under the Minister for Industry and Handicrafts, which owns and operates the country’s main generation, transmission and distribution assets in Lao PDR, and manages electricity imports into its grids and exports from its stations. EDL also has a project development role and has been the implementing agency for government hydropower power projects and in the case of IPP projects is the Government’s shareholder. It has been past practice for EDL to take over from MIH the responsibility for a project once a shareholders’ agreement is executed and the project loans are closed. 2.8.6 Other Ministries and Agencies

The Ministries of Finance, Agriculture & Forestry, Transport Communication & Construction, Commerce and other ministries and agencies, are also involved in the planning, review and development of power projects throughout the implementation process of hydropower IPP and Domestic projects.

2.9 Organization Chart of the Power Sector Agencies The organization of the power sector in Lao PDR is diagrammatically represented below. The function of the key agencies is briefly outlined below:

Figure 2.5: Organizations Chart of the Power Sector Agencies

Electricity Ma-nagement Div.

Commercial Units Departments:

Business Ventures

Generation Distribution ServicesDevelopment

Admin. & Finance

Internal Auditor GM's Office

General Manager

Board of Directors

Electricité du Laos

Power Sector Construction Companies

Ministry of Industry &

Handicrafts

Public Services

- Secretariat- Administration- Personnel- Documents- Finance

Council of Ministers

Prime Minister's Office

Cabinet

Ministry of Agriculture &

Forestry

Ministry of Finance

Min of Transport, Communications & Construction

Committee of Investment Management & Foreign Economic Cooperation

Science, Technology & Environment Agency

Lao National Committee for Energy

Electricity

Hydropower Office

Rural Elec-trification Div

Geology & Mines

Industry

Personnel

Administration

Handicrafts

Inspection

ECI / Off-Grid Project

District Authorities

Provincial Authorities

Committee Planning Committee

Off Grid Agencies (public)

Power System Plannng Div.

Social & Envi- ronmental Div.

Administration Div.

27

3. TECHNICAL POTENTIAL FOR REGA TECHNOLOGIES 3.1 Renewable Energy Technologies This section covers detail of the requirement for renewable energy resources data and renewable energy technologies, as follows:

Solar PV Resources, Wind Resources, Biomass / Biogas Resources, Existing Micro / Mini Electrification systems, New Mini / Micro Hydro Resources, Village Hydro Resources, Other Resources (Biogas digestion, geothermal, clean coal)

The existing renewable technology projects (battery charging station, wind pumping, mini/pico hydroelectric, and biogas digester) are included in Attachment 3.1. It should be noted that current status and potentialities have to be periodically reviewed and updated because of technological developments and socio-economic transformations in the country. 3.1.1 Solar Power Potential NASA Solar Insolation Global Dataset: The National Aeronautical and Space Agency (NASA) / Langley Research Center solar insolation dataset4 covers most countries, and is currently the only source of insolation data that covers Lao PDR. The NASA data has a resolution of 100 km (i.e. 1o incremental of latitude and longitude) and for Lao PDR; the accuracy of the data is around +/- 15%, due to low number of data stations in the country5. Table 3.1: Average Daily Radiation on Horizontal Surface (kWh/m2/day, 10-year average)

Average Daily Radiation on Horizontal Surface (kWh/m2/day, 10-year average)

Province Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Mean Vientiane (central)

3.98 4.57 5.20 5.47 5.01 4.24 4.34 4.18 4.55 4.03 3.97 3.98 4.46

Phongsaly (north-west)

3.47 4.34 5.16 5.56 5.07 4.19 3.98 4.37 4.44 3.82 3.56 3.59 4.30

Luangnamtha (north-east)

4.44 5.27 5.99 6.17 5.45 4.36 3.92 4.24 4.49 4.22 3.99 4.12 4.72

Attapeu (south)

4.38 4.74 4.88 5.11 5.04 4.13 4.49 3.58 3.80 4.03 4.08 4.17 4.37

Source: http://eosweb.larc.nasa.gov/ (uncertainly of values = 10% to 17%) The table above extracted from the NASA database, gives average values of daily radiation at selected locations. The NASA dataset indicates the solar radiation levels within the country average around 4.5 kWh/m2/day and show only moderate fluctuations during the year ranging from 3.5 – 6.2 kWh/m2/day. Higher fluctuations are likely in the hilly areas of the country. While the

4 National Aeronautical and Space Agency, Atmospheric Sciences Data Centre, Surface Meteorology and Solar Energy Data Set, http://eosweb.larc.nasa.gov/sse/RETScreen/ 5 Solar Insulation Long term-records are available from six climate stations in Lao PDR (including Luang Prabang, Vientiane/Wattay, Savannakhet and Pakse). Long term insolation records from climate stations in neighbouring countries provide additional useful data.

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resolution of the NASA dataset is relatively coarse, the range of variation in solar insolation levels across the country is relatively small. In the absence of better data, the NASA datasets is currently being used by DOE and private sector organizations to assist in the selection of solar PV systems in Lao PDR, but is considered barely for adequate for this application. The data is generally not adequate for design/selection of solar heating applications and electricity generation. The following database resource map, extracted from the NASA data shows the distribution of annual solar insolation, at the earth’s surface, across Lao PR: Figure 3.1: Distribution of Annual Solar Insolation, at the Earth’s Surface,

Across Lao PDR 3.1.2 Solar Home Systems Lao PDR is situated in the tropical zone in Southeast Asia, the country has about 300 days of sunshine per year and the annual mean daily global solar radiation in the country is in the range of 4.5 – 4.7 kWh/m2/day, which makes it a potentially good location for solar energy utilization. Solar insolation at the earth’s surface is required for evaluation of the technical viability of solar photovoltaic (PV) and solar heating.

Solar PV systems were first introduced in Lao PDR during the early 1980s, more than 5,000 solar homes have already been installed in Lao PDR under various programs and indications are that the popularity of solar PV systems is increasing. General experience has been that the systems work quite well in most areas. However, solar PV system performance reduces somewhat in

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some areas of the country, where rainfall/cloud cover is higher, and larger capacity systems are required to achieve comparable performance. The GOL currently targets electrification of 100,000 households through off-grid systems (mainly solar PV) by 2020, and our view is that this target is likely to increase once the rural electrification master planning process is complete. Accordingly, a reasonable accurate solar insolation dataset covering the entire country will be required to allow selection/costing of solar PV systems that will provide adequate performance under varying solar insolation levels. Solar PV system costs can then be compared with other rural electrification approaches, and the least-cost approach selected. 3.1.3 Wind Energy Potential Wind velocity data will be required for the evaluation of small wind power generation installations. This will allow identification of rural villages that have adequate wind velocities, and where small-scale wind generation systems could be considered for village/household electrification as part of the master planning process. The Mekong River Commission (MRC) has completed long-term wind speed data for about 38 sites within the basin. Of these, 7 sites are within Lao PDR, as follows: Table 3.2: Average Daily Wind Speed (m/s)

No. Site Period of Record Mean Wind Speed (m/s)

1 Seno 01 Jan 1985 – 31 Dec 2001 2.6 2 Pakse 01 Jan 1985 – 31 Dec 2001 2.5 3 Savannakhet 01 Jan 1985 – 31 Dec 2001 1.5 4 Vientiane 01 Jan 1985 – 31 Dec 2001 1.4 5 Thakhek 01 Jan 1985 – 31 Dec 2001 1.4 6 Sayabuly 01 Jan 1985 – 31 Dec 2001 1.2 7 Luang Prabang 01 Jan 1985 – 31 Dec 2001 0.6

Source: Mekong River Commission These wind speeds are below the wind speeds that are required for economic wind power generation. Referring to the Wind Energy Resource Atlas of South Asia prepared by the World Bank Asia Alternative Energy Programme (ASTAE, 2001), good to excellent wind resource areas for large-scale wind generation are found in central Laos. Also, good to excellent wind resources for village power generation and water pumping using small turbines are predicted for south-central Lao PDR. However, a detailed assessment of wind energy potential in Lao PDR has yet to be carried out (LNCE, 2002). Lao PDR is not included in this work, but there is an opportunity to have NREL extend this work to cover part or all of Lao PDR (at cost of perhaps US$ 100,000 to cover the south-central provinces of Bolikhamxay, Khammouane, Savannakhet and Saravan, which are the only areas where economic wind power developments may be found). Opportunity for village wind power may be more widespread, because small wind turbines are able to operate satisfactorily at lower wind speed. 3.1.4 Biomass Potential The wood-fuels form by far the largest source of energy in Lao PDR. According to an estimate of the Food and Agricultural Organization (FAO), wood-fuel consumption in 1993-94 was more than 2.3 million tons and accounted for nearly 90% of the total energy consumption of the country. It is estimated that about 92% of households use wood-fuels for

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cooking. Besides wood-fuels, an estimated 0.343 million tons of agricultural wastes were also available for use as a fuel in 1993-94 (FAO, 1997).

There is little experience of biomass system in Lao PDR, information on various biomass sources is sketchy, and studies providing any quantification or assessment are non-existent. The obvious biomass source is rice husks, given the predominance of rice in Lao PDR’s agriculture. RETC have established a 160 kW pilot gasification plant using rice husks under NEDO financed support with Chinese technology. There is a potential for gasification of agriculture wastes in a number of rural areas of Lao PDR, but it is not clear if there have been any

studies that have sought to identify and quantity the available resources. It is understood that in rural areas, rice is generally processed in a large number of relatively small, dispersed mills (there are 49 rice mills in Lao PDR according to government statistics), and the available rice husk supply is thus widely distributed. This militates against the development of biomass plants, as economic viability is generally only attained when a significant and concentrated supply of rice husk (and other agriculture wastes) is available. 3.1.5 Biogas Potential

Livestock plays an important role in an agriculture-dependent country like Lao PDR, but where there has been little experience of biogas systems. Animal and human excreta is generally available within rural areas, and there would appear to be potential for a larger biogas digester program for cooking, lighting and other purposes within the country (RETC has set up five demonstration units, and have completed a feasibility study of a support program for domestic biogas plants in rural households in Lao PDR). There are 1.1 million

cattle, 1.2 million buffaloes and 1.5 million pigs in Laos, though widely dispersed. Data will need to be collected on the average number of animals per household. Large-scale biogas digesters using pig farm wastes could be established and be used to generate electricity. It is understood that there are no cultural inhibitions towards use of biomass digesters based on human and animal excreta. Biogas obtained by anaerobic fermentation of cow/pig dung and other organic matters can be used as an energy source for cooking, lighting and other purposes. Biogas technology was introduced in Lao PDR in 1983 through the assistance of Food and Agricultural Organization (FAO). Initially, three family-size biogas units were set up by the Ministry of Agriculture and Forestry with the cooperation of FAO. Since 1983, STEA has been involved

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in the development of pilot biogas plants. At present 14 biogas plants with capacity ranging from 12 to 16 m3 each have been installed in the country. Pig waste in large pig farms are a potential source of methane gas and most pig farms (35 in total) are concentrated around Vientiane Capital City. The data on large pig farms within Vientiane Capital City are shown in Attachment 3.2. Municipal Solid Wastes (MSW) from Vientiane Capital–apparently 170 tons/day of organic waste is available, have not yet been studied as a combined fertilizer / energy / CDM project. A pilot plant is currently underway to produce organic fertilizer, which will provide useful insight into this market. Apparently recyclable materials are already separated out and sold to Thailand and paper waste is already used in a Lao paper mill. Vientiane MSW was apparently considered by the EU-Cogen 3 project but was not large enough for mass burn approach with boilers and steam turbines, so could be worth looking at in terms of digesters and using resulting biogas in gas engines or as a local cooking fuel to replace imported LPG. 3.1.6 Biofuels Potential Table 3.3: Production of Crops (Possible Biofuels) for Year 2003

Peanut Sesame Sugarcane Province Area

(ha) Production

(t) Area (ha)

Production (t)

Area (ha)

Production (t)

Phongsaly 353 325 320 314 765 39,092Luangnamtha 154 137 22 21 1,263 66,926Oudomxay 500 740 200 140 433 15,884Bokeo 83 81 121 80 6 192Luang Prabang 1,085 1,102 1,937 1,259 180 3,960Houaphanh 303 257 315 208 260 5,980Xayabouly 2,115 2,816 1104 607 Vientiane Cpt. 64 64 2,149 82,789Xiengkhouang 492 477 32 29 230 5,750Vientiane 1,783 1,983 157 149 427 9,906Bolikhamxay 647 647 8 8 1,110 27,750Khammouane 39 36 4 4 350 7,775Savannakhet 803 832 179 4,245Xaysomboun Saravan 3,985 4,331 82 2,050Sekong 95 93 29 16 318 7,248Champasak 2,064 2,079 1,010 24,240Attapeu 20 19 200 4,630

Total 14,585 16,019 4,249 2,835 8,962 308,417Source: Agriculture Statistics Centre, MAF, Vientiane Capital, 2003 Basic production data on peanut, sesame, sugarcane crops is available from agricultural statistics, which can be used to make projections for energy supply; the production figures for 2003 stand at 16,000 tons for peanut, 2,835 tons for sesame and 308,000 tons for sugarcane. However, a detailed study will be needed to understand the current use pattern, the opportunity cost for diverting crops or residues to energy use, collection issues, etc.

Data on biofuels has been extracted from agriculture production statistics for peanut, sesame and sugarcane, and is provided as table above. Further, a significant palm oil industry is reported to be developing in Savannakhet Province, and a study needs to be made to examine its energy potential. Information is not readily available for coconut plantations and industry.

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3.1.7 Existing Micro Hydro Electrification Systems Since 1999, a number of micro hydro projects have been initiated or completed, giving a total of some 38 existing micro hydro systems (with individual capacities in the range of 5 – 250 kW and an aggregate capacity of 2,381 kW) capable of serving more than 12,000 households via simple, isolated distribution systems that have been developed within the country. The majority of the systems are located in the northern provinces of Phongsaly, Luangnamtha, Luang Prabang, Houaphanh, Xiengkhouang and Sayabuly. In 1999, the Hydro Power Office of MIH (with financial support by JICA) completed a study of existing micro hydro projects in Lao PDR, with the aim of assessing their current operational condition and need for rehabilitation. The study identified 3 mini hydro stations (capacities above 1 MW) plus 34 existing micro hydro stations (generally between 5–100 kW), and was able to physically inspect / report on 26 of the micro hydro stations. While two of the stations were constructed in 1910, the majorities were developed between about 1970 and 2001 under funding provided by a variety of agencies, including GOL (MIH and Provincial Authorities), PR of China, Government of Vietnam, USA Ministry of Agriculture and Forestry, Nghe Tinh Irrigated Company of Vietnam, and others. 3.1.8 Micro / Mini Hydro Potential: The potential of micro / mini hydro systems (capacity up to 5 MW) has been prepared from information provided by MIH. The list contains 53 potential sites with total capacity of about 60 MW in northern provinces and 15 sites in southern and central provinces. The majority of the potential systems are located in the eight northern provinces of Phongsaly, Luangnamtha, Oudomxay, Bokeo, Luang Phrabang, Houaphanh, Xayabouly, and Xiengkhouang. 6 sites having feasibility studies completed; 12 sites having site identifications or reconnaissance work carried out, and the potential viability of these sites has not been ascertained. We understand that a number of the sites identified are unlikely to be viable due to the high cost of providing access. Some 15 sites in the southern and central provinces (mainly Bokeo, Savannakhet, Khammouane, and Xaysomboun Special Zone) have been identified, but have not been investigated to any significant extent. Preliminary technical, economic, environmental, and social assessments will be required if hydro resources in the southern and central provinces are to be considered in the RE Master planning process. 3.1.9 Village Hydro Systems

A small number of village systems, typically serving individual villages through a small distribution grid and with installed capacities of 5 – 10 kW, have been constructed and installed in Lao PDR. A small diesel gen-set is usually provided as back-up generation, as stream flows are usually too low to fully power the village hydro unit during the dry season. Expansion of the number of village hydro systems is planned as part of the World Bank assisted SPRE II Project.

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In the hilly areas, mostly in the northeastern provinces, where topographical and hydrological conditions are more suitable, significant numbers of Chinese-manufactured personal hydro generators (‘pico’ hydro units, typically of 100 – 300 Watts output) are in use in Lao PDR. Anecdotal evidence is that pico hydro usage by over 50% of households is common in many northeastern villages. Pico hydro installations require a head of only 1.0 – 1.5 m and a small flow. The low cost of these systems (US$ 50 – 200) is within the willingness to pay of many rural households, and this makes them popular, despite drawbacks such as their low reliability and poor electrical safety.

3.1.10 Hybrid Power System Potential

Under a program called “International Cooperative Demonstration Project Utilizing Photovoltaic Power Generation Systems”. It is one of the world’s first cases to generate power by combining two different natural resources. The project serves as an example for many areas in the world that are in need of such environmental and locally procurable generation systems. Lao PDR enjoys abundantly strong sunshine that can be turned into solar energy. However sunshine cannot be used at night when electricity is needed for lighting. Sunshine is also a form of energy that is easily affected by changes in the natural conditions. Our hybrid system can offset these shortcomings by using pumped water storage technology that can convert solar energy into a storage form. In daytime, power is generated by solar panels (100 kW); the electricity made from solar panels is used to run a highly efficient pump to draw water from Nga River into the upper reservoir. During nighttime, this water is used to run the power generator. 3.1.11 Other Resource Potentials

(i) Geothermal Resources: Geothermal resources in Lao PDR are essentially un-

explored and while some surface geothermal activity is found, these manifestations are small. We conclude, therefore that geothermal resources are unlikely to be a significant contributor to renewable energy generation in the country, at least in the medium-term.

(ii) Coal Resources Potential: Lignite reserves, sufficient for about 2,000 MW of generating capacity, have been identified in the country. Anthracitic and bituminous

Solar panel collects sunshine and turn into electricity, and Solar energy pumps river water into reservoir.

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coal is also available, providing a possible long-term option for around 500 MW of generation. These reserves are generally more suitable for larger-scale generation than those needed to support rural electrification.

(iii) Co-Generation Potential: Wood fired co-generation (heat and power) or gasifier plants could be economic for captive use in wood processing facilities. Just as for the case of rice mills, wood processing factories are also widely dispersed across the country. The National Statistical Centre (NSC) lists 112 saw mills without providing their capacities, whereas the Ministry of Agriculture and Forest (MAF) list 65 saw mills (licensed in 2003-04). It will be necessary to reconcile this variation, identify factories with large capacities and estimate the available wood waste. Some factories are converting the wood waste into charcoal briquettes for sale or export to Thailand. So a comparative cost-benefit analysis will be necessary to identify saw mills, evaluate waste steam supply constraints and conduct pre-feasibility studies.

3.2 Energy Efficiency In Lao PDR, although there is not yet a formal overall policy on energy efficiency (EE) and conservation, in many sectors of the country, the activities towards energy efficiency and conservation are being promoted. As the responsibility for the energy sector is divided and there is a lack of the relevant experience and expertise, the country is a little bit facing some difficulties in establishing the policy of the energy efficiency and conservation. However, the Ministry of Industry and Handicrafts (MIH) still intends to develop such a policy. It encourages the society acknowledging the importance of using energy efficiently. Moreover, the ministry also sends its officials to trainings, workshops and seminars on these issues abroad. In the past, the MIH has also carried out a number of activities regarding to energy efficiency and conservation. Table 3.4: The Efficient Development of the Electric Light/Lamp

Currently Utilized Technology

Recommended to Change to

Utilize New Technology

Sector The Increase of light

Efficiency (%) Light bulb 36-watt fluorescent light tube Household 70 40-watt fluorescent light

36-watt fluorescent light Household 8

40-watt fluorescent light

Compact Fluorescent Tube Household 17

Light bulb 36-watt fluorescent light Commercial 70 40-watt fluorescent light

36-watt fluorescent light Commercial 8

36-watt fluorescent light

Compact Fluorescent Tube Commercial 17

Source: Assessment Report on Technology Needs and Priorities for Mitigating Greenhouse Gas Emissions These activities include public and private participation. For the public sector, with financing support of ASEAN Center for Energy, Lao PDR has been organizing a few workshops and seminars, which were attended by different stakeholders such as hotel managers, officers of electric utilities and architectural institutions. The table above shows the development of the efficient lighting, which has been utilized in cities, towns, countryside and commercial sectors. The energy reduction methods below which use energy with high efficiency (33-watt fluorescent light tube, compact fluorescent tube and electronic ballasted fluorescent light tube) or a number of advanced technologies using renewable energy (solar photovoltaic energy lamp and household solar photovoltaic energy system).

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The annual energy-economizing assessment and benefit received (per year) is shown in table below: Table 3.5: The General Summary of the Assessment on the Utilization of the

Energy for Lights

Currently Utilized

Technology

Recommended to Change to Utilize New Technology

Sector

Annual Energy Saving

(kWh/Year)

Received Benefit

(Kip/Year) (*) Light bulb 36-Watt fluorescent

light Household (in cities)

21.9 10,640

40-Watt fluorescent light


-//-

8.76 4,284


Compact Fluorescent -//- 76.65 37,482

Light bulb 36-Watt fluorescent light

Household (in rural)

18.25 8,924



-//- 7.3 3,570



Light bulb


commercial N/A



-//- N/A



Source: Assessment Report on Technology Needs and Priorities for Mitigating Greenhouse Gas Emissions (*) Received benefit tariff calculation is referred to new power tariff for 2005 3.3 Greenhouse Gases Lao PDR developed its first national GHG (greenhouse gas) inventory for the year 1990 using the IPCC guidelines. The inventory was developed for four of the six sectors mentioned in the guideline, namely energy, land use change and forestry, agriculture and waste. The GHG covered in the inventory include CO2, CH4, CO, N2O and NOx . Industrial processes were not covered because as only significant operative industrial activity in the category is a cement plant, and this plant was not operational in 1990. The inventory for solvents was not estimated, as there is no data on the use of solvents and other chemicals covered under this category. The revised Intergovernmental Panel on Climate Change (IPCC) guidelines (1996) methodology were used to develop the GHG inventory. Emissions were estimated from the volume of the activities. The volume data for each activity was collected from the National Statistics Centre and various report published by international agencies in cases where data was not available from the national sources. The present data collection system is geared to the needs of development planning and thus, does not cover certain areas that are necessary for estimation of GHG inventory. The Lao PDR is still in the process of building a system of collecting data on various economy and social indicators. This implies that a number of assumptions had to be made in preparing the inventory in absence of adequate data availability. The Department of Environment, Science Technology and Environment Agency is the focal point for three international environmental conventions, namely the Convention on Biological Diversity, the Framework Convention on Climate Change, and the Convention on Combating Desertification and the Kyoto protocol on Clean Development Mechanism and much effort centered on implementing these.

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The Lao PDR ratified the United Nations Framework Convention on Climate Change (UNFCCC) on 4th April 1995. Awareness about climate change, however, has been stirred in Lao PDR since it participated in the Rio Earth Summit in 1992. The first major climate change activity in the country was the Lao National Greenhouse Gas (GHG) Inventory Project (GEF Climate Change Enabling Activity project, CCEAP) and the capacity building project of GEF implemented through UNDP. Its aim was to assist the government in fulfilling its obligations under Articles 4 and 12 of the UNFCCC. The activities undertaken included greenhouse gas inventory of sources and sinks, identifying greenhouse gas mitigation options, formulating GHG mitigation strategies, the national implementation plan and the first national communication. The Lao PDR also benefited from the project by initiating public awareness on climate change issues. At this stage, vulnerability and adaptation assessments were not included to the list of activities. Notwithstanding this large gap in information on vulnerability and adaptation to climate change, Lao PDR is seen to be highly vulnerable to changes in climate, particularly of rainfall amount, as can be seen in the year-to-year flooding and drought events that occur in the country. The key activities are:

Develop a First National Communication on Climate Changes in the Context of UNFCCC,

Assessed technology needs and its priorities for mitigating GHGs in the Country, Participated in meeting, seminars, workshop and training on Climate Changes.

The planned activities are:

To develop and implement the National Adoption Program of Action (NAPA), To assess national needs on capacity building, To carry out the mitigation measures for GHG emission through implementation

of suitable projects, To continue in raising public awareness on climate change, Cooperation with international agencies on climate change activities and related

issues, Curriculum design for climate change - The present awareness of climate change

issue is limited to a few policy makers. A wider dissemination of this information calls for including climate change information in the educational curricula for the benefit of the younger generation,

Vulnerability and adaptation assessment - Lao PDR is highly dependent on natural resources for its prosperity: agriculture, forest resources, and water resources. The likely transition in climate change will therefore, not only have physical impacts on these resources but also a larger impact on the socio-economic situation of the country.

The GOL has ratified the Kyoto Protocol on Clean Development Mechanism by February 6, 2003 and the Designated National Agency (DNA) has been established as the Science Technology and Environment Agency, the medium to large CDM potential in Lao PDR are the following sectors are (i) hydropower, (ii) waste management, (iii) afforestation and reforestation and bio-energy. The main constrains are (i) DNA structure and rules are unclear including the sustainability criteria and demonstration needed for approval (ii) private and consultancy sector is underdeveloped (iii) general lack of attractiveness to foreign investors, (iv) CDM potential difficult to mobilize (a) hydropower include additionally and methane emission from reservoir, (b) waste management which it only applicable for large city (c) afforestation and reforestation include the long gestation period, (d) bio-energy where a critical issue is feed-in tariff levels and their practical accessibility by project developers.

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Table 3.6: Institutions and their Mandates in the Area of Environment Including CDM and Climate Change

Institution Department / Division Area of Responsibility Science Technology and Environment Agency

Department of Environment, Environmental Research Institute Cabinet of STEA.

Overall responsibility and coordinating role for environment, including climate change and biodiversity, Coordination of MEAs and ASEAN Cooperation

Ministry of Agriculture and Forestry

Department of Forestry, Department of Agriculture, National Agriculture and Forestry Extension Service (NAFES), Department of Meteorology and Hydrology.

Forestry, agriculture, shifting cultivation; Biodiversity, watershed management; Management of Protected Area, etc. Hydrological data, Climatological data.

Ministry of Industry and Handicrafts

Department of Industry, Department of Geology and Mines, Department of Electricity.

Industrial pollution, Air pollution, Mining and environment, Hydropower development.

Ministry of Communication, Transport, Post and Construction (MCTPC)

Department of Transport, Department of Housing and Urban Planning.

Vehicle emissions, household and municipal, Wastes, burning, methane emissions.

Ministry of Public Health (MPH)

Department of Hygiene, Department of Preventive and Curative Medicine and Rehabilitation.

Hospital waste, occupational health standards.

Ministry of Labour and Social Welfare (MLSW)

Committee for Disaster Management.

Coordination of activities on disaster management

Committee for Planning and Cooperation (CPC)

Department of Planning, Department of Monitoring and Evaluation, National Statistics Centre.

National development, public investment programming, National socio-economic data.

Lao National Mekong Committee (LNMC)

River management, flood mitigation, and basin development.

National Environment Committee

Coordination of environmental management.

Source: Department of Electricity, Ministry of Industry and Handicrafts, Vientiane, Capital, Lao PDR 4. REVIEW OF SKILLS AND INSTITUTIONAL CAPACITIES RELEVANT TO REGA

TECHNOLOGIES 4.1 Technical Institutions The institutions with, a particular interest in / association with renewable energy / renewable energy resources / renewable energy technologies (RETs) in Lao PDR are:

Ministry of Industry and Handicrafts (MIH),

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Committee for Planning and Cooperation (CPC), Science, Technology and Environment Agency (STEA), Lao National Committee for Energy (LNCE), Electricité du Laos (EDL), The Ministry of Agriculture and Forestry (MAF), Ministry of Finance, Ministry of Communication, Transport, Post and Construction (MCTPC), Ministry of Commerce.

These technical institutions have a role basically in providing necessary information, research and development (R&D), technical and financial support and training programs in addition to supplying the necessary hardware.

4.1.1 Training and Capacity Building Training and capacity building programmes will need to be prepared and delivered by the following levels:

STEA is the main coordinating agency for science, technology development, and for

environmental planning and management in all sectors. In the scientific and technology areas, STEA’s role is to support the government socio-economic development plan through sustainable development / application of science / technology to improve the living standards of people in Lao PDR.

DOE and EdL - DOE will be charged with RE off-grid planning and the ongoing

maintenance and upgrading of the RE Database / GIS and RE Master Plan. EdL will be charged with grid expansion planning and the ongoing maintenance / upgrading of the RE Database / GIS. The RE Master Plan consultant will provide training to DOE and EdL in each of the relevant areas. It is proposed that the RE Planning Manual serve as the main source of training material.

PDIH – PDIH offices will be responsible for organizing the basic data surveys of the

rural villages, entry of the data received into computers provided for the purpose and emailing the data to DOE. The RE Planning consultant will provide training to the PDIH staff on survey process and implementation, the use of the survey forms, computer basics, data entry, quality control and email.

District and Provincial Authorities - These authorities will be responsible for

undertaking the basic data surveys at village level. The PDIH staff should provide training to the district and provincial authority staff on communications procedures, the survey process and implementation and the use of the survey forms.

4.1.2 End Use Promotion It is a matter of curiosity that the government institutions concerned tend to be excluded in the end-use promotion of RETs. Currently, all existing RET end-use promotion activities are conducted by the private sector and NGOs such as financial and technical support. Unfortunately this lacks continuity and is dependent upon the availability of funds and a profitability margin for NGOs and the private sectors. 4.1.3 Research and Development (R&D) While renewable energy resources will most likely be developed under the direction of MIH and /or EDL, coordination with renewable energy sector organizations is recommended so that their data, experience and expertise can be accessed for the future projects. As well, staff of these organizations may be able to contribute practical experience on appropriate technologies, implementation approaches and pilot projects.

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The STEA and / or the Technology Research Institute (TRI) of STEA is an important institution for any renewable energy related work, and their staff should be consulted particularly in respect of the biomass energy assessment, but also in respect of mini / micro hydropower, wind power assessments and solar PV energy technologies. Several institutions have been established for R&D purpose in Lao PDR; examples are the Renewable Energy Technology Centre (RETC) of STEA, under the direction of a Deputy Director of STEA, the TRI undertakes research and development on renewable energy technology, mechanical engineering and new material technology. RETC is a division of TRI, and support research and development into energy technologies in support of the Government’s socio-economic development objectives. While the Renewable Energy for Sustainable Development Association (RESDALAO) is still being formed and currently has only limited capacity, consultation with members of this Association is recommended, as RESDALAO represents a wider group of renewable energy stakeholders than STEA / TRI / RETC. Such consultation will allow RESDALAO to become more closely involved with and contribute to MIH / EDL renewable energy projects. 4.2 Financial Institutions It can be said that the financial factor is one of the most important issues that will contribute towards the success of the planning and implementation process in Lao PDR, but the Government has constraints in finance. Based on previous developments, it is indicated that most of the funding sources for energy / renewable energy sectors will come from the loans and grants of multilateral financial organizations and international and local participants into this sector, although these are still limited. In the recent year, the Lao Banking system experienced further growth and an increase in competition with the foreign banks. To date, beside the Central Bank of Lao PDR, there are three state owned commercial bank such as Banque pour le Commerce Exterieur Lao, Agricultural Promotion Bank and Lao Development Bank, and one Lao privately owned bank namely Lao Commercial Bank. 4.3 Non-Government Organizations A number of Non-Government Organizations have been engaged in the promotion, development and dissemination of renewable energy / rural energy technologies in Lao PDR. Various NGO’s encouragement and assistance options can be explored, including financing options with their on-going savings mobilization and credit schemes. In this regard, the Government of Laos, specifically the Renewable Energy Technology Centre of STEA, Department of Electricity of MIH has mobilized donor assistance from Canada-Thailand Tri-bilateral on Environment (CTTE), Swedish International Development Agency (SIDA), Canadian International Development Agency (CIDA), New Energy Development Organization of Japan (NEDO) and others to accomplish its RET projects. Specific examples include six existing biogas digesters, battery charging stations (BCS), solar home systems, solar home plus battery charging station hybrid system (Rotation System), Gasification Project, Wind Pumping Technology, Mini Hydro Electric Technology, Pico Hydro Electric Technology. 4.4 Donor Agencies The Government's strategy is to raise the national electrification rate to an ambitious target of 90 % by the year 2020. Electricité du Laos (EdL), the agency responsible for generation, transmission and distribution of electricity in the country is currently engaged in an ambitious program of rural electrification through extension of the national distribution grid to reach around 80 % of households. However, it will not be economically viable to extend grid electrification to

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all areas of the country, and development of sustainable off-grid electrification systems such as pico hydro, village hydro / diesel, solar, wind, biomass, etc, wil l be required to serve about 10% of households, if the Government's rural electrification targets are to be achieved. Beside mobilization of domestic source by GOL, the rural energy / rural electrification programmes have received substantial assistance both from bilateral and multilateral donor agencies in the form of grant-aid and soft loans. The projects include:

The previous World Bank - assisted Southern Provinces Rural Electrification (SPRE) Project, was completed in December 2005. The aim of the project was to extend grid connections to 50,000 households in rural areas of Central and Southern Lao by its completion date. This project also supported the Off-Grid Rural Electrification Promotion and Support Program that aimed to extend off-grid electrification systems to some 6,700 rural households.

The recently commenced second ADB -assisted Power Transmission and

Distribution Project (Northern Area Rural Power Distribution - LAO 31341-01) which will extend the grid to the major northern centres in the provinces of Oudomxai and Luangnamtha (both in 2006), and Phongsaly (2009), and connect an additional 33,800 rural households. The proposed World Bank -assisted SPRE II project (SPRE phase II) aims to extend grid connections to an additional 93,000 rural households in 1,300 villages and about 30,000 households through off-grid connection utilizing solar, village hydros, diesel gen-sets or other mini-grid options.

In 2002, the GoL requested technical assistance for preparation of a master plan /

study for a small (i.e. mini) hydropower development project targeting projects in the 8 northern provinces of Phongsaly, Luang Namtha, Oudomxay, Bokeo, Luang Phrabang, Huaphanh, Sayabuly and Xiengkhouang. A scope of work for the study was confirmed in 2003, and study implementation commenced in early February 2004. The study was due for completion in December 2005. The study considered hydro projects in the range 100 kW up to 5 MW only, and does not consider micro / village hydro projects supplying individual villages or small clusters of villages.

As part of the SPRE II Project, the village off-grid electrification program aims to be expanded

to all seventeen provinces within Lao PDR. the rates of connection will be substantially scaled-up from those under the SPRE I Project, with a target of connecting 10,000 additional households over the three years of Phase 1 of the SPRE II Project, as well as maintaining those connections achieved under the SPRE I Project. This will be a major contribution to achieving the Government’s national electrification target. In order to achieve this level of performance, MIH and the World Bank have identified the need to establish an implementing agency that has greater independence and flexibility in its operations than is possible for an office within MIH itself, This will be achieved by contracting out the responsibility for implementing the village off-grid electrification program to a Village Off-Grid Promotion and Support Office (VOPS).

4.5 Private Sector Participation 4.5.1 Provincial Electricity Service Company (ESCO)

The development of private sector operations is quite limited in Lao PDR and is confined mainly to small Provincial Electricity Service Company (ESCO) operations set up under the DOE Off-Grid Rural Electrification Promotion and Support Program in 2002. These ESCOs are generally individual entrepreneurs or small businesses (although some ESCOs are understood to be state entities) with an interest in rural electrification and who have been trained in the promotion, support and maintenance of solar PV systems, village hydro or village gen-set (diesel) technologies. The majority of their business is in subsidized solar PV systems. ESCO coverage under the DOE program is currently limited to six provinces

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(Vientiane, Oudomxay, Luang Namtha, Champasak, Luang Phrabang, Xieng Khouang and Sayabuly) but there is potential to increase the scale of their operations for whole country from 2006 to 2020. With support from the World Bank and the Global Environment Fund (GEF), under the Southern Provinces Rural Electrification I (SPRE I) Project, the Ministry of Industry and Handicrafts (MHI) has developed and piloted a program for village-level off-grid electrification using solar home systems (SHS) and village hydro and generating sets (VHGS). The program is administered through the Off-Grid Promotion and Support Office (OPS), located within MIH. On behalf of MIH, OPS contracts private sector provincial-level Electricity Supply Companies (ESCOs). Working with Provincial Departments of Industry and Handicraft (PDlHs), ESCOs are responsible for planning new off-grid installations through a participatory planning process and for selecting and contracting. Village Electricity Managers (VEMs) in villages included in the program. Once a satisfactory installation plan has been prepared, ESCOs are responsible for the delivery of hardware to the village and for providing support to the VEM in installation and ongoing operations and maintenance. The VEMs are responsible for the collection of customer payments, which are remitted to ESCOs and from the ESCOs to a reflow account held by MIH. The ESCOs and VEMs are paid on the basis of performance, with full payments only being made if installations are made correctly and function properly and if targets for customer payments rates are met. 4.5.2 Private-Sector Renewable Energy Initiatives We understand that five private sector companies have been active in Lao PDR in the solar PV / renewable energy areas / power off-grid, briefly as follows:

a) Lao Solar, which has now stopped operating. b) SVT, which was previously the local agent for BP Solar, but has now, turned its

attention to electrical construction work. c) A Thai company with small representative office in Vientiane. d) Sunlabob, the only significant existing solar PV system provider in Lao PDR. e) SV Company Group, the only significant in consulting services for Village Off-

Grid Promotion and Support Office Project. 4.6 Government Institutions The following institutions have been involved in the development, promotion and association with renewable energy / renewable energy resources / renewable energy technologies (RETs) in Lao PDR are: the Ministry of Industry and Handicrafts (MIH), the Committee for Planning and Cooperation (CPC), the Science, Technology and Environment Agency (STEA), the Lao National Committee for Energy (LNCE), Electricité du Laos (EDL), the Ministry of Agriculture and Forestry (MAF), the Ministry of Finance, the Ministry of Communication, Transport, Post and Construction (MCTPC), the Ministry of Commerce. 5. POLICY AND INSTITUTIONAL FEATURES IMPACTING REGA TECHNOLOGY

DISSEMINATION 5.1 National Poverty Eradication Programme (NPEP) The National Poverty Eradication Programme (NPEP) is central to the national development agenda. The NPEP encapsulates the essence of the Lao PDR’s approach towards achieving the goal set in 1996 by the 6th Party Congress, namely, exiting the group of less developed countries LDCs by 2020. The Lao PDR’s long-term national development goal is to be achieved through sustained equitable economic growth and social development, while safeguarding the country’s social, cultural, economic and political identity. The foundations for reaching this goal have been laid during the past 28 years of peace and development in the country by:

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Moving consistently towards a market-oriented economy. Building-up the needed infrastructure throughout the country; and Improving the well being of the people through greater food security, extension of

social services and environment conservation, while enhancing the spiritual and cultural life of the Lao multi-ethnic population.

The figure below summarizes the main elements of the NPEP, and the inputs and process leading to its preparation.

Figure 5.1: National Poverty Eradication Programme Process

The NPEP expands on this strategic approach and it is now the Government’s quintessential instrument to achieve the 2020 goal. The NPEP is a comprehensive framework for growth and development, and has a particular focus on the improvement of the poverty situation in the poorest districts. It has thus a dual objective: enhancing growth and development, and reducing poverty. The NPEP was presented at the 8th Roundtable Meeting, to be held in Vientiane, Lao PDR, in September 2003. The scope and content of the NPEP is in line with the Lao PDR’s commitment to implement the Millennium Development Goals, adopted by all 189 member states of the UN General Assembly, as well as with the Brussels LDC Action Plan. At the 7th Roundtable meeting in November 2000, in Vientiane, the Government presented its strategic medium-term approach to poverty fighting, entitled “Fighting Poverty through Human Resource Development, Rural Development and People’s Participation”. In March of 2001, the 7th Party Congress further refined the 2020 vision by specifying poverty reduction targets for 2005, 2010 and 2020 and highlighting industrialization and modernization priorities.

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In June of 2001, the Prime Minister issued Instruction 010, identifying poverty criteria and clarifying the modalities for the preparation of an operational poverty eradication programme, based on the concept developed by the Government in the strategic approach presented at RTM 7. The Party Congress sets the guidelines and defines the way forward. Through the 5-year National Socio-economic Development Plans, the Government translates these into specific targets and objectives and identifies strategic programmes and priorities by sector to achieve them. The Roundtable documents operationalise these plans according to resource mobilization needs. Since the adoption of the New Economic Mechanism and the open-door policy in 1986, considerable progress has been achieved. Key social and economic indicators have steadily improved. Economic growth rates were strong throughout the nineties, despite the Asian financial crisis. Growth since the start of the new millennium has been steady in a stable macro-economic climate. The Lao PDR has become an active partner in ASEAN and other regional co-operation initiatives. 5.1.1 The National Goals and Priorities

The 7th Party Congress (March 2001) defined the following guidelines for poverty eradication and sustainable economic growth:

The socio-economic development of the country must be balanced between economic growth, socio-cultural development and environmental preservation. These are the three pillars of the Lao PDR’s development policy.

Socio-economic development must be harmoniously distributed between sector and regional development, and between urban and rural development, so as to fully and efficiently utilize human and natural resources.

Socio-economic development must be based on sound macroeconomic management and institutional strengthening in order to enhance national solidarity and cohesiveness and to promote democracy within society.

The national development potential and strengths must be combined with regional and global opportunities in order to enable the Lao PDR to participate in regional and international economic integration.

Socio-economic development must be closely linked with national security and stability.

Within these guidelines, the main objectives of the long-term development strategy are:

To sustain economic growth with equity at an average rate of about 7 per cent, considered as the necessary rate for tripling per-capita income of the multi-ethnic Lao population by 2020.

To halve poverty levels by 2005 and eradicate mass poverty by 2010. To eliminate opium production by 2005 and phase-out shifting cultivation by

2010.

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Figure 5.2: Map of Lao PDR, 72 Districts Identified as Poor

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5.1.2 Strengthening the Overall Environment for Sustainable Growth and Development

The National Long-Term Development Framework (NDF) builds on progress since 1975 to realize the Government’s goal of poverty eradication by 2020. The NDF incorporates the guidelines of the 6th and 7th Party Congresses (1996 and 2001, respectively). Table 5.1 provides a summary of the main elements of the NDF, including the long-term development indicators regarding living standards of the Lao multi-ethnic population. The main objectives and targets for the period 2001-2010 and for 2001-2005 are also presented. The NPEP is the NDF’s operational format. Table 5.1: Elements of the 2020 Development Vision

Indicators

2000 2005 2010 2015

Total population (million) 5.2 5.9 6.6 8.2 Population growth rate (%) 2.6 2.5 2.3 2.2 GDP growth rate (%) 5.8 7.0 7.0 7.0 - Agriculture (%) 4.9 4.5 4.2 3.8 - Industry (%) 8.5 10.0 10.0 8.5 - Service (%) 5.0 10.0 10.0 9.0 Life expectancy at birth (years) 59 63 67 70 Adult literacy over 15 years (%) 70.0 78.0 84.0 90.0 Total education enrolment rate 70.2 85 90 95 Infant mortality under 5 (per 1,000 live births) 82 62 40 20 Maternal mortality (per 100,000 live births) 530 350 250 130 Access to clean water (% of population) 52 57 100 100 Source: Committee for Planning and Cooperation (CPC), Vientiane Capital, Lao PDR, 2000. 5.1.3 Industrialization and Modernization: Vital Role of the Supporting Sectors The NPEP includes a number of “supporting sectors” that will contribute both directly to job creation and hence poverty reduction, and indirectly to the strengthening the four core sectors (agriculture, education, health and transport). The 7th Party Congress (2001) defined industrialization and modernization of the Lao PDR as a gradual process, from relying heavily of the agricultural sector to a more diversified economy with higher productivity and more advanced technology. The Government’s strategy for industrialization and modernization gives priority to the development of the energy sector, agro-forestry, manufacturing, tourism, and mining and construction materials. Concurrently with large and medium-sized hydropower projects, more attention will be given to small-size power plants for supplying electricity to rural areas. Every effort will be made to ensure that 70 per cent of the households have electricity by 2010. The Lao PDR’s hydropower potential is very considerable and its development offers extensive benefits for the country. Hydropower is already a major contributor to economic output, government revenues, and export earnings. However, only 623 Megawatts (MW) of an estimated 23,000 MW of hydropower potential has so far been developed. The Lao PDR has one of the lowest levels of electrification in Asia; only 20 per cent of all villages and 34 per cent of households have access to electricity. The development of the country’s hydro-electrical potential and rural electrification is thus integral to the national development framework. The key challenges in accelerating power development that the Government will address include the need for:

A better and a more transparent integration of social and environmental concerns.

Curtailing possible over-dependency of the economy on hydropower development.

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Increasing domestic tariffs to cover financial production costs, at least in urban areas, with a transparent subsidy scheme for poor rural areas. More effective sub-regional co-operation in producing and distributing electricity.

Prioritisation of proposed hydropower projects and development of suitable financing.

Improvement of the regulatory framework and encouragement for increased private sector investment.

Institutional strengthening, especially in financial planning, management, and negotiation capacity with developers.

The Government plans to expand electrification in remote areas through two methods. One is to expand the grid to comparatively easily accessible areas. The other is to provide off-grid supplies to remote areas where it is difficult to expand the present grid due to environment or cost reasons. Only ten per cent of rural areas are provided with grid electricity. From a gender equity perspective, easier access to electricity will facilitate the lives of women and reduce their household chores while contributing to poverty eradication. Since women in rural areas spend a great time in gathering fuel wood, at the expense of other more productive activities, increased accessibility to electricity in rural areas will improve living standards and help reduce poverty. Energy consumption of the main economic sectors is increasing on average 10 per cent per year. Therefore, the expansion of energy production in tandem with that of the electricity network is a major supporting priority for economic growth, especially in rural and remote areas. To achieve expansion of energy production and the electricity network, the policy and investment priorities include the following:

Expand the electricity network to full coverage, starting with provinces and districts with very limited access to electricity.

Complete construction of small and medium-scale projects (up to about 60 MW) for domestic utilization using government investment funds.

Proceed with the Nam Theun 2 Hydropower project with international investors. Construct a 500 kV high voltage electric transmission system. Continue mini-developments (micro-hydropower, solar and wind energy projects

for off-grid power supply in remote areas. 5.2 Rural Electrification Master Plan Main Elements:

The Rural Electrification Master Plan will consist of two main elements:

A Rural Electrification Database and Geographic Information System (GIS) that

will contain the basic data required, down to the village level, for effective rural electrification planning. The Rural Electrification Database / GIS was partly set-up previously, but needs to be developed further and ‘populated’ with data relating to all rural villages in the country, renewable energy resources, etc.

A Rural Electrification Master Plan that describes the most economical method of

providing electricity to each village in the country, along with the priority (time-line) for electrification.

Both the Rural Electrification Database / GIS and the Rural Electrification Master Plan will need to be updated periodically (preferably annually) as the electrification of the country progresses and as the socio-economic situation and demand for electrification in rural areas of Lao PDR develops.

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Approach:

EdL is currently managing the planning and expansion of the Main Grid, and has the necessary data, computer programs and skilled personnel to carry out this task. As MIH / DOE assumes the role of preparing the Rural Electrification Master Plan, EdL will loose some of its current planning independence and will need to direct its Rural Electrification activities in accordance with the Rural Electrification Master Plan.

The following broad approach to rural electrification planning is recommended:

MIH / DOE will be responsible for preparing the Rural Electrification Master Plan in consultation with EdL, the Provincial Department(s) of Industry and Handicrafts (PDIHs) and other stakeholders. This will be a feasibility-level plan that will identify electrification implementation priorities for all villages, provide an indicative implementation timeline based on the electrification priorities covering a 15 year period and will identify suitable implementation approaches for various areas (such as EdL grid extension, concession, ESCO, etc.).

The current rural electrification planning approach will be adjusted to include consideration of the relative economic benefits of the various Rural Electrification models / technologies, so that the Rural Electrification Master Plan is developed on a least-cost basis.

EdL will continue to manage the detailed planning / expansion of the Main Grid in accordance with the requirements of the Rural Electrification Master Plan, and will publish its detailed rural distribution grid expansion plans in the Power Development Plan on an annual basis, as it does at present. The Power Development Division (PDD) of DOE, MIH should be expanded to contain a list of villages that EdL will electrify within the next year, next 2 years, next 5 years, next 10 years, etc.

Provincial, district and village authorities have responsibility under the Electricity Act for planning of smaller, off-grid systems. Planning for these systems, and coordination with other systems, will be included as part of the Rural Electrification master planning process, but in consultation with provincial and district authorities and the DOE.

All villages that will not be electrified under either the EdL main grid expansion, or under provincial / district distribution systems, will then become the domain of off-grid electrification systems (i.e. individual household systems and village systems), and the programs for off-grid electrification will be directed towards these areas.

The various electrification approaches (main grid, provincial / district grid and off-grid) will need to be coordinated by DOE to prevent overlap and duplication of electricity services, as the Master Plan develops in the future.

Where extension of the main electricity grids over-runs existing isolated provincial / district schemes in the future, means of incorporating these systems into the main grid will be required.

Organization

DOE will be responsible for the coordination of off-grid and Main Grid system planning / implementation, to avoid overlap of electricity services. Since Electricité du Laos (EdL) and DOE will both be modifying the Rural Electrification Database / GIS, clearly defined scopes will need to be agreed with respect to database management and sharing database updates. While System Planning Division (of EdL) is adequately staffed, additional staff will be required within DOE for RE database management and Rural Electrification Master Planning. Staffing levels for the DOE master planning function and computer hardware / software requirements for DOE / EdL are suggested in the main report. Engagement of an experienced consultant to assist DOE with

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establishment of the Rural Electrification database and initial preparation of the Rural Electrification Master Plan is suggested. Subsequent maintenance of the Rural Electrification database and updating of the Rural Electrification Master Plan would be by DOE. The organizational arrangement proposed for preparation of the Rural Electrification Master Plan is indicated in the following diagram:

Figure 5.3: Rural Electrification Master Plan Organization

Planning The RE Master Plan will be developed on an economic least-cost basis, taking account of likely electrical demand and willingness-to-pay. Main Grid electrification will then be directed towards villages that have higher demand / willingness-to-pay for both household and productive consumption, to minimize the effect of RE on EdL’s financial position. Renewable resource studies, aimed at establishing the likely viability of potential renewable resources will be undertaken, including:

Assessment of the rehabilitation / repair of existing micro hydro distribution systems.

Master plan study on small hydropower in northern Laos (currently being undertaken under JICA funding).

Mini / micro hydro resource assessment in seven southern and central provinces. Biomass resource assessment.

Current planning is that some 80% of all families in the country will be connected to the main electricity grids by 2020. Another 10 % of the rural population (about 100,000 households) will be supplied from off-grid, standalone electricity generators, mostly privately owned. In the medium-term, this number is likely to be larger (around 150,000 households), as it will take time for the grid to be extended into remote areas. However, in the longer-term, the number of off-grid connections is expected to reduce, as the grid is extended further into remote areas.

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6. REVIEW OF SUSTAINABLE DEVELOPMENT PRIORITIES 6.1 RE Sustainable Development Priorities in Lao PDR The Government of Lao PDR’s goal is to increase the electrification ratio for the whole country from 41% to 90% by 2020, with intermediate targets of 45% in 2005 and 70% in 2010. This goal will be achieved through:

• On-grid household electrification – involving main transmission / distribution grid extensions to meet the 90% target, after deduction of off-grid installations.

• Off-grid household electrification – an embryonic but successful program of electrification of off-grid households employing state, donor and private resources is underway in Lao PDR and targets electrification of 150,000 households by 2020. However this program will need to be substantially scaled-up, if this target is to be achieved by 2020. Current projections of village and household electrification are as follows:

Year 2004 2005 2010 2013 2015 2020

No. of Villages Electrified

3,464 3,574 5,584 6,433 7,024 8,906

% of Villages Electrified 31% 32% 50% 58% 63% 80% No. of Households Electrified

395,598 423,122 733,926 858,794 914,894 1,140,396

% of Households Electrified

41% 45% 70% 76% 79% 90%

Achieving the Government’s targets will require the electrification of about 745,000 (mainly rural) households over the next 15 years, equivalent to an average electrification rate of about 50,000 households / year. Of this, DOE estimates that about 645,000 households (i.e. 42,700 households / year on average) will be electrified by extension of the Main Grid, while about 150,000 households (i.e. 10,000 households / year on average) will be electrified by off-grid systems. The estimated cost of achieving the government’s rural electrification targets is about US$ 420 million, as follows:

Electrification Approach

Households Electrified

(No.)

Estimated Cost (US$)

Average Cost (US$ / household)

Grid Electrification 645,000 370 million 575 Off-Grid Electrification 150,000 51 million 340

Totals 745,000 421 million 533 The total cost of the off-grid component includes all costs relating to hardware / equipment purchase, system installation, program management / administration, and ongoing service / support costs. Of the total cost of about US$ 51 million4, households will provide about US$ 3 million as up-front deposits, and will pay about US$ 30 million by monthly installments (hire-purchase). Direct subsidies (grants) of about US$ 8 million will be required for program management / administration costs along with a further (about) US$ 10 million to match the total funding requirement of US$ 51 million. About US$ 30 million in soft loan financing will be required to finance off-grid system purchases, to be repaid by householders’ monthly installments. Beside mobilization of domestic source by GOL, the rural energy / rural electrification programmes have received substantial assistance both from bilateral and multilateral donor agencies in the form of grant-aid and soft loans. The projects include:

The recently commenced second ADB -assisted Power Transmission and Distribution Project (Northern Area Rural Power Distribution - LAO 31341-01) which

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will extend the grid to the major northern centres in the provinces of Oudomxai and Luangnamtha (both 2006), and Phongsaly (2009), and connect an additional 33,800 rural households.

The proposed World Bank -assisted SPRE II project (phase II) which is expected to commence in 2005 and will extend grid connections to an additional 93,000 rural households in 1,300 villages and about 30,000 households through off-grid connection utilizing solar, village hydros, diesel gen-sets or other mini-grid options.

6.2 RE Sustainable Development as Supplied by ADB Lao PREGA Project 6.2.1 Top Priority

1. Large Pig farming complex near Vientiane – apparently 3 farms with 2000 adult pigs and 6000 pigs in total, largest in Laos, uses 5 settling ponds currently producing unused methane, could use biogas to heat pens for baby pigs as well as to drive necessary ventilation fans via a gas engine, and CDM aspects from current methane emissions prevented.

2. Municipal Solid Wastes from Vientiane – apparently 170 tons/day of organic waste available, not yet studied as a combined fertilizer/energy/CDM project. Pilot plant is currently underway to produce organic fertilizer, which will provide useful insight into this market. Apparently recyclable materials are already separated out and sold to Thailand and paper waste is already used in a Lao paper mill. Apparently considered by EU-Cogen 3 project but not large enough for mass burn approach with boilers and steam turbines, so could be worth looking at in terms of digestors and using resulting biogas in gas engines or as a local cooking fuel to replace imported LPG.

3. Sugar cane biogases – apparently biogases from the existing sugar mill has just been dumped since 1989, complication could be 2nd sugar mill that is apparently 30% complete but lack of available land apparently reduces realistic prospect of necessary sufficient sugar cane resource to complete 2nd plant. Apparently no study available for productive uses of biogases, options would seem to include as paper mill feedstock and/or to burn and use steam to drive a steam turbine for sugar factory power, export of surplus electricity and low pressure steam to be used for sugar mill process heat requirements.

6.2.2 Second Priority

1. Agriculture Wastes, possibly using rice husks that are currently being dumped at rice mills, spread on paddy fields to retain moisture, used as potting mix or bumped in nearest river. The rice husks could be mechanically compressed into briquettes to replace fuel wood, or used in more efficient combustion for brick making, or used to generate electricity through gasifies with gas used in reciprocating engines to drive rice mills and/or provide electricity for sale to local community or into grid or into local mini-grid.

2. Energy audit of steel mill – 15km near Vientiane, apparently uses bunker oil, apparently no studies of mill to date, apparently not a realistic candidate for co-gen (heat load too small, hours of use too low?) from preliminary analysis for Cogen-3 project.

6.2.3 Third Priority

1. Hotel energy audits and/or benchmarking and/or guidelines for ongoing energy efficiency programs

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2. Government offices benchmarking and budget allocation exercise linked to energy efficiency upgrades

3. Biogas to replace imported LPG, eg as used for making special oil for perfume and for cooking. LPG Is imported from Thailand and China by truck and then transferred to 15/30kg cylinders.

4. Purpose grown biomass for fuel wood or biomass power plant with foliage being fed to cattle in dry season, similar to PREGA Dendro project in Sri Lanka.

5. Use of sawmill wastes to run gasified and generates electricity for sawmill use (and save diesel for diesel engine) and use waste heat for timber drying as in Indonesia PREGA study

6.3 Priorities for Mitigating Greenhouse Gas Emissions As for the Lao PDR, the natural resources, which have been utilized as the energy source, consist of 3 main resources such as water, forest and minerals. 6.3.1 Hydro Energy From the Food and Agriculture Annual Report 2000, it has noticed that the Lao PDR possesses abundant water and water resources, fresh and good quality water. The annually average flowing water amount accounts for approximately 8,500 cubic metres/second within a total number of the Mekong River’s tributary Stream and they are capable of contributing the amount of water to the Mekong Basin, which constitutes approximately 35%. During the rainy season, there is the amount of flowing water up to 80% and in the dry season up to approximately 20% of the annually total amount of flowing water. At the present time, the water utilization is mainly in the agriculture sector; for example, irrigation, fishery, cultivation and animal husbandry. Apart from that, water is still used in the electric hydropower development, which potentially possesses approximately 23,000 megawatts, within which less than 5% of the total potential has been used. The Lao PDR’s abundant water resources have created the upstream and down-stream transportation convenience in the wet season been supplied for a variety of industrial sectors and water supplies for people in towns and cities which approximately constitutes 60% and 51% in the rural areas’ clean water supplies consumption (Draft of the National Environmental strategies, 25/10/03). 6.3.2 Forestry The latest studies has officially been approved in 1989 that the Lao PDR has been covered with the proportion of the approximately 47% of the total forest, coverage which constitutes approximately 11.2million hectares. The forest is classified into 7 types such as production forest, Conservation forest, Protection forest, Rehabilitation forest, and Exploited Forest. In the Lao PDR, there are 20 national Biodiversity Conservation Areas, 2 Adjacent Zones, 57 provincial Biodiversity Conservation Areas, 144 Urban Biodiversity Conservation Areas, 23 Provincial Protected forest Forests, and 52 Urban Protected Forests, which have added up to the total amount of conservation forest areas of 5.3 million hectares or 22.6% of the total territory of the Lao PDR. The forest resources have played the important roles in accumulating the national incomes, been the foodstuff and the additionally rural grass-root people’s incomes. The forest reduction ratio has resulted from the agriculture area expansion, wild fire-burning forests, slash-and-burn shifting cultivation, poorly disciplined and badly planned timber-cutting practices, the imbalance of infrastructure development and the inappropriately harvesting forest products which are exceeding the supplies from the availability of the nature (Draft of the national Environmental strategies, 25/10/03).

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Firewood is the people’s main energy form. About 85% have been used for household consumption. The average of fire wood utilization is about 0.75-2.92 m3 or 0.58-2.26 T/Person/year (National Biodiversity Strategy Action plan). 6.3.3 Minerals Lao PDR has a variety of valuable mineral potentials, of which those minerals have only been mined in a small scale. In particular, Lao PDR has a large number of various types of coal deposits, which can be used, in the field of energy resources. Mostly, anthracite and lignite have been utilized in the manufacturing industry. Only a small amount of coal has been used as fuel energy for the people’s handcraft of brick-burning process. During the period of 1995 to 2001, the Viengphoukha Coal Mining Company has been mining the coal up to the total amount of approximately 3,750 tones for domestic sales and 803,787 tones for exporting abroad (to Thailand). The above-mentioned company will continue to mine coal up until 2015, from which the result of the survey has revealed the total coal deposits of up to approximately 9,565,000 tones. Whereas, other good quality coal deposits have been found in the Vientiane province with the annual coalmining amount of up to approximately over 23,000 tones. Besides, peat, a kind of coal, is still used for cooking energy; however, the statistics of using peat as cooking energy is not clearly surveyed in greater detail yet. (Department of geology mining and the Viengphoukha Coal Mining Company, 2000). To avoid the utilization of the energy resources namely petrol, kerosene, diesel and coal, including the firewood and charcoal use as already mentioned above as they are the main cause of the global gas emissions. Therefore, technology and modes of production using the electric power is regarded as a more appropriate option and there are possibilities in the energy field as follows: 6.4 Policy Support for Sustainable Development Measures for monitoring and managing potential environmental and socio-economic impacts have been developed based on Lao PDR legislation, regulations, decrees, standards and guidelines.

The following legislation is now in force, and supporting regulations (promulgated or in draft) in Lao PDR are relevant to ensuring environmental and socio-economic issues are addressed during design, construction, and operation of the project:

The Lao PDR Constitution (1991) acknowledges the need for environmental protection in Lao PDR and requires that Environmental Assessment give particular attention to the assessment of potential positive and negative socio-economic impacts of project development and to prevention and/or mitigation of harmful impacts.

Prime Minister’s Decree No. 164/1993 established eighteen protected areas and required that the government develop management plans for each area. Two additional protected areas, referred to now as National Biodiversity Conservation Areas (NBCAs), have since been added. The current area totals 3.4 million hectares or 14.3% of the country’s area. In addition, provinces and districts have also designated their own conservation areas and protection forests bringing the overall national total to 5.3 million hectares or 22.6% of the total land area.

Water and Resources Law (1997) does the following:

Classifies all catchment’s areas for various uses

Promotes protection and rehabilitation of forests, fishery resources and the environment

Suggests that EIA should be carried out on large-scale water development projects, and requires that funds be provided for protecting and enhancing catchment area resources, and for resettlement compensation

Forestry Law (No. 01/1996) defines:

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Principles and regulations on the use, management, protection, conservation and regeneration of forest resources with the aim of making forest resources a sustainable resource for supporting national economic and social development, ensuring protection and conservation of watersheds, guarding against soil erosion, and protecting plant and wildlife species and the environment

Five categories of forest (Protection, Conservation, Production, Regeneration, and Degraded)

Production Forests are forests and forestlands used in regularly providing for national economic and social development requirements and for people’s livelihoods, timber and other forest products on a sustainable basis and without significant negative environmental impacts.

Conservation Forests are forests and forest lands classified for the purpose of protecting and conserving animal and plant species, natural habitats and various other entities of historical, cultural, touristic, environmental, educational or scientific value

Protection Forests are forests and forestland classified for the protection of watershed areas and prevention of soil erosion. They also include areas of forestland with national security significance, areas for protecting against natural disaster and areas for protection of the environment.

Regeneration Forests are young or fallow areas of forest classified for regeneration and maintenance of forest cover with a view to reaching a natural equilibrium as trees increase in maturity.

Degraded Forests are forests that have been heavily damaged, to the extent they are without forest or barren, that are classified for tree planting and/or allocation to individuals or organizations for tree planting, permanent agriculture and livestock production or other purposes in accordance with national economic development plans.

Implementation responsibilities of the Ministry of Agriculture and Forestry (MAF) at the national level, provincial and district forestry offices, including responsibility for issuing land-use certificates at the district level

That forest and forest land can be converted to other uses (e.g., for transmission line rights-of-way, etc.) when necessary and if in the public interest, and subject to approval from responsible authorities

An individual or organization given permission to convert forest to another use is responsible for payment of a conversion fee, land reclamation and tree planting

Provision for allowing long practiced activities such as collecting wood for fences and fuel, non-timber forest products (NTFP), hunting and fishing for non-protected species for household consumption, and other customary uses

Provision for setting up a fund for activities such as protection and conversion of forests, tree planting, and forest regeneration to protect and conserve watersheds, the environment and wildlife

The issue of compensation for removal of forests is dealt with in Forestry Law. Compensation is based on the volume of timber (m3) of a given class or species of tree that will be cut down. Compensation is only paid for timber removed from private forestry plantations. No compensation is paid for timber removed from natural forests on public lands. Nor is any compensation paid for removal of any kind of NTFPs such as bamboo, mushrooms, etc. except for villagers’ bamboo plantation.

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There is no requirement to replant trees on degraded land located away from a transmission line corridor, as compensation for removing trees to create a transmission line right-of-way. Such forms of compensation only apply to reservoir clearing projects, where it is necessary to plant trees to stabilize slopes that could otherwise fail through a process of mass wasting. Compensation rates range from US$23/m3 for lesser qualities and grade of timber species, up to a maximum of US$999/m3 for superior qualities of timber species. These rates are established by the Government of Lao PDR (GOL) as a schedule within regulations under the Forestry Law. During the alignment survey, the Provincial or District forest office staff will assess the volume of natural or plantation forest that will be removed by a project. An assessment report is prepared and sent to the central office of the Department of Forestry in Vientiane, which is responsible for evaluating requests for timber removal and providing approvals. Timber removed from a transmission line right-of-way by Electricité du Laos will be sold, and the proceeds provided to the GOL. Where timber is removed from a private tree plantation, then EDL is responsible for compensating the owner of the plantation. During transmission line construction, the Provincial or District forestry office staff will scale and mark all timber cut from the right-of-way. Fines will be levied against the contractor for any timber that is cut and does not receive a timber mark from the forestry department. This helps to limit illegal timber harvesting. EDL is responsible for paying for all costs incurred by the Department of Forestry, including costs of preparing timber cutting assessments during alignment surveys, and timber scaling and marking during construction.

UN Convention on Biological Diversity (1996) under which Lao PDR agrees to:

Develop a national biodiversity conservation and sustainable use strategy

Develop legislation for protecting species and populations that are threatened

Integrate conservation and sustainable use of biological resources into national decision making

Conduct EA of proposed development projects with a view to minimizing negative impacts

Land Law (1997) states that:

Land within Lao PDR is the property of the national community, and individuals are assigned to effectively use the land, but not treat it as a tradable commodity

Rights of those who have been allocated land, including the right to transfer that land, are protected by the State

Individuals have a duty to preserve land in good condition

A District may grant the right to use agricultural land and forest land within its jurisdiction for other land uses

An individual’s right to use land can be terminated if the State expropriates the land to use in the public’s interest, but the State must pay appropriate compensation damages

The Electricity Law (1997) requires that:

EIAs need to be carried out on larger hydroelectric dam projects (as a minimum).

Electricity projects, including transmission and distribution projects, be licensed by the GOL, and as a precondition to the granting of a license, the project demonstrate that

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national socio-economic development objectives will be satisfied, and that there will be no detrimental environmental impacts

The licensee (in this case EdL) is responsible for ensuring that the environment is protected or damages paid for environmental degradation, and that residents are compensated in cash or in kind for lost property, diminished living conditions, relocation or resettlement.

Inspection and enforcement be carried out for project activities.

In accordance with the EIA provision of the Electricity Law (12 April 1997), the Law on Environmental Protection (03 May 1999), the Environmental Protection Law Implementation Decree (04 June 2001), and the Regulation on Environmental Assessment in the Lao PDR (03 October 2000), the GOL enacted the Regulation on Implementing Environmental Assessment for Electricity Projects in Lao PDR (No: 447/MIH, dated 20 November 2001). The following noteworthy information is contained in the Regulation regarding development and review of an Initial Environmental Evaluation (IEE) for electricity projects:

The Ministry of Industry and Handicrafts, under which the Department of Electricity resides, is required to ensure that environmental assessment is included in its decision to approve, finance or undertake any type of electricity project in Lao PDR.

Upon receiving a description of an electricity project from the project owner (i.e., EdL or its consultants on behalf of EdL for the Rural Power Distribution Project), the Department of Environment (DoE), which resides within the Ministry of Industry and Handicrafts, has 30 days to complete project screening to determine whether an IEE or more exhaustive EIA is required. STEA has an additional 15 days to signify its concurrence with this decision, after which DoE has 7 days to provide the screening decision to the project owner. The content of an IEE is determined through the screening process.

An IEE is prepared by the project owner, and submitted to the DoE for review and decision-making. Within 7 days of receiving the IEE, the DoE must circulate the report to other line agencies, local government authorities, and the public that may be affected by the project to comment on the IEE. Government agencies and the concerned public have 30 days to provide their comments.

Within 40 days of acting on the IEE report (i.e., from the date the report was submitted to the DoE by the project owner), DoE must provide a written decision on the IEE to STEA. DoE may recommend that: a) the IEE and its conclusions be revised; b) the IEE be accepted and the project approved; c) the EMP be revised; or d) terms of reference be developed for an EIA. Within 10 days of receiving the IEE, STEA must approve the IEE and issue an Environmental Compliance Certificate, agree with DoE that an EIA is required, or indicate in writing to DoE that STEA disagrees with the DoE decision.

The GOL has also enacted five additional legislative instruments (one policy and four standards) for managing environmental affairs in the power sector of Lao PDR. The first of these is the Power Sector Environmental Policy (No. 581/MIH.DOE, dated 04 October 2001), which requires the power sector to assist the GOL in meeting its social and economic objectives by managing its activities in an environmentally responsible manner. This includes requiring appropriate environmental assessment and management be undertaken to international standards.

The environmental management standard addressing Environmental Management Documents for the Department of Electricity (No: 582/MIH.DOE, dated 04 October 2001) establishes the process for developing various environmental management documents, including environmental management standards and guidelines. This documents standard also identifies such things as the requirements for authorizing standards, consultation, and document control.

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The environmental management standard addressing Department of Electricity Environmental Records Management (No: 583/MIH.DOE, dated 04 October 2001), requires that an environmental records management system be established within the Department of Electricity. The standard identifies the types and formats of environmental records that will be kept, requires that a database be created and that records be stored in one central, easily accessible location, such as the Environmental Management Unit’s main office, and that records be available for borrowing during working hours.

The environmental management standard addressing Environmental Impact Assessment for Electricity Projects (No: 585/MIH.DOE, dated 04 October 2001), sets out the requirements for EIA for electricity projects in Lao PDR. The following noteworthy information is provided in the standard:

An EIA cannot proceed without an Environmental Screening and an IEE being first carried out. The extent of the EIA and its content depend on the project’s Environmental Screening and IEE, with the screening and IEE determining the content and terms of reference of the EIA;

The contents and requirements of an EIA for an electricity project, including requirements for public involvement and development of an EMP, are specified. Regarding public involvement, the standard indicates that the process for public involvement for any follow-up EIA that may be required by a decision rendered by STEA, is scoped during the IEE. Otherwise, public involvement for an IEE is limited to the DoE requesting comments on the IEE from project affected persons.

The environmental management standard addressing Environmental Management Plans for Electricity Projects (No: 584/MIH.DOE, dated 04 October 2001), sets out the requirements for preparing EMPs for electricity projects. The standard indicates that:

An EMP is to be part of a Project Screening Report, IEE report and EIA report, whichever is determined to be required for a project;

An EMP must cover all environmental management measures that are to be implemented during the project’s pre-construction, construction, operation and decommissioning, and is to address all significant environmental issues identified in the Project Screening, IEE or EIA, including a social action plan or resettlement action plan, if required;

The EMP must be prepared so as to be able to be used as a stand-alone document for use in implementation; and

A two-stage public involvement process is to be developed and implemented. The first stage is the process established for Screening, IEE or EIA, when the EMP is under development. The second stage is the process for implementation of the EMP.

Environmental Protection Law No.02/99/NA, (1999) does the following:

Assigns the Science, Technology and Environmental Agency6 (STEA) the rights and primary responsibilities for protection, mitigation and restoration of the environment in Lao PDR.

Defines the environmental conservation responsibilities of other GOL agencies such as the Department of Electricity, Department of Forestry, etc.

States that environmental conservation comes before mitigation and restoration

Stipulates that those who generate an environmental impact are responsible for the resulting damage caused

Directs that environmental management and monitoring units (EMMUs) be established at all levels of government, with responsibilities to include such things as: establishing and enforcing sector environmental plans; taking action to abate

6 Created by Decree No. 63/PM, which was superceded by Decree No. 68/PM in 1999.

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environmental damage; issuing orders to adjust, suspend, remove or close down activities that cause negative impacts

The Law on Environmental Protection also establishes the authority to make environmental regulations. To this end, the GOL has enacted the Regulation on Environment Assessment in the Lao PDR (No: 1770/STEA dated 3/10/2000). Key features of the Regulation include:

Each Development Project Responsible Agency (DPRA) must ensure that any development project in the Lao PDR carries out EA in accordance with the content determined in this Regulation, and any regulation of its own line ministry. The Environment Assessment must include at least a Project Description to enable DPRA to perform a project environment screening under Article 7 of this Regulation. If the project is not exempt under Article 8 of this Regulation, the EA must include an Initial Environment Examination (IEE) as specified in Article 9 of this Regulation. For some projects, through the findings of the IEE, an Environmental impact assessment (EIA) is required as specified in Articles 11, 12, 13, and 14 of this Regulation.

All project proposals that are submitted to a Development Project Responsible Agency (DPRA) by a project owner, and all project proposals that are prepared by a DPRA must be included a brief description of the project, which include the following information:

• Project owner • Project type • Project size • Project location • Intended product • Raw materials to be used • Estimate of the quantity and quality of any solid, liquid, or air-borne wastes

resulting from project construction or operation • Number and origin of project’s intended labor force for construction and operation • Anticipated positive and negative environmental and social impacts of the project • Environmental mitigation measures that will be implemented during the project

construction, operation and closure (if applicable).

The DPRA must circulate the project proposal document to relevant government sectors and local authorities, and must consider their comments in its environmental screening decision. Line ministries may specify additional information to be required in project descriptions in their internal EA procedures.

Within 30 days of receiving a project description, the DPRA must complete the screening and explain the screening decision in writing to national STEA in the case of national projects or to the Provincial, Municipal or Special Zone Science, Technology and Environment Office for local projects. Within 15 days of receiving the screening findings the respective environment office referred to above shall either notify the DPRA that it concurs with the decision, or shall instruct the DPRA to reconsider, taking into account relevant information or guidance. Within 7 days after receiving the record of decision from the respective environment office, the DPRA must notify project owners of the result of the project screening to abide by the record of decision. The DPRA must also notify the Environmental Management and Monitoring Unit of the concerned line ministries or local administration authorities for information and monitoring purposes.

For those projects found by screening to be exempt from further EA, STEA must issue an environmental compliance certificate within 15 days after receiving the screening record of decision from DPRA. There are two types of certificate; one with conditions and another without conditions. Those projects determined to be non-exempt from EA must proceed to conduct IEE.

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For foreign investment projects, the IEE report must be written in Lao and English. Line ministries in their internal EA guidelines may set additional requirements for the contents of IEE reports and the number of copies of reports that are to be submitted.

If the IEE report concludes that no EIA is needed, an EMP must be developed within the IEE report, which must have the following contents:

• measures to prevent and minimize environmental impacts • programs for environment control and monitoring • responsibilities, organization, schedule and budget for implementation of the EMP

and other issues that the DPRA may deem necessary for the protection of the environment.

During the IEE process, if it is found that the project needs an EIA, the IEE report must contain Terms of Reference for the scooping of a subsequent EIA.

The process for reviewing an IEE report and issuing an Environmental Compliance Certificate is the same for both the EA Regulation at the national level and for the Electricity Sector (see discussion on Regulation on Implementing Environmental Assessment for Electricity Projects in Lao PDR below).

The IEE report and the IEE’s EMP must receive approval from the DPRA before STEA can issue the environmental compliance certificate to the project owner. For projects requiring EIA, the project owner must, during the detailed design phase, prepare the detailed EMP based on the general EMP of the IEE already approved by STEA.

The project owner is directly responsible for the monitoring and evaluation of the EMP. The central government DPRAs are responsible for the inspection of the implementation of the monitoring and evaluation for the project environment where projects are approved at the central level.

In order to ensure the effective implementation, the project must establish an environmental unit. The members of such unit may come from the company itself, hired staff, from an outside organization or be entities working on contractual basis.

The project owner of the Environmental Unit must establish monthly reports on project environmental monitoring to be sent to the concerned agency(ies), which are: STEA and/or Provincial, Municipal or Special Zone Science, Technology and Environment Office, and the Environmental Management and Monitoring Units (EMMUs) of the concerned line ministries for information and supervision.

STEA and/or provincial, municipal or special zone Science, Technology and Environment Office and the responsible line agency Environmental Management and Monitoring Unit retain authority to directly control project activities, in order to ensure that project owners carry out effectively and regularly their environmental protection duties.

Environmental Management Standard for Electricity Project No.0366/ MIH.DOE, (2003) states that:

Environmental screening is a preliminary assessment of a project’s potential environmental impact. It is normally completed at a projects identification stage. Screening is used to decide whether a project’s impacts are of a significant nature to warrant further environmental assessment.

The IEE will determine the scope of the EIA. This will include the scope and plan for conducting the study to meet the requirements of an SIA.

The IEE shall identify the expected social impacts of the project, and a plan to obtain the necessary information for determining the magnitude of the impact and the potential measures to avoid, minimize, mitigate or compensate for the effects.

The IEE shall include the following information related to SIA:

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• Discussion of consistency with governmental regulatory requirement.

• Brief description of the social conditions in the project area including an estimate of the number of people to be relocated, distribution of population in project area, a brief discussion of the local economy and primary source of income, the presence of significant cultural and infrastructure facilities that will be affected and a list of issues to be discussed in the SIA relative to the social conditions.

• Preliminary plan for relocating the affected persons (Preliminary Resettlement Plan-PRP). The PRP may provide budget and technical feasibility proposals (availability of relocation sites, etc.) for more than one technical design.

• A preliminary assessment of land acquisition requirements and a determination of whether the land required for the project fall into forest/tribal or other special areas.

• Description of indigenous groups in the project area (if any) to include status of the population from the perspective of the GOL, significant unique characteristics of the cultural tradition of the groups, special economic resources of the group.

• Preliminary plans for protecting and enhancing the integrity of the indigenous groups.

• Evidence for consulting with governmental agencies, local authorities, NGOs in the project area, and the Project Affected Persons (PAPs) including name of participants, date, location, subjects discussed, discussion results, agreed conclusions, and actions to be taken.

The Regulation for implementing environmental assessment for Electricity Projects requires all electricity projects in Lao PDR to be environmentally screened according to the amount of impact they will or will likely have on the environment. A project must meet the following criteria to justify no further environment assessment: “Because of its nature, size and location, the project can be expected to have immeasurable or insignificant environmental impact on natural resources, ecological resources, public health and public welfare.

Road Law (1999) states that:

Environmental protection is required during road activities

National and provincial authorities of the Ministry of Communications, Transport, Post and Construction are responsible for environmental protection on road projects

Reasonable compensation must be paid to individuals whose land is expropriated for road rights-of-way, relocation of replacement structures, and loss of trees and crops.

Decree No. 102/PM on the Implementation of the Environmental Protection Law (2001) defines that:

Development projects and all development activities that relate to the environment shall be conducted as follow:

All development projects, including State and private owned, shall have an environmental impact assessment (EIA) before the establishment and operation of those projects. They shall also have method and protecting or mitigating measures to protect social and natural environment that can be approved by the government.

The owners of the development projects shall have an obligation to bear the cost occurred in any process of EIA.

MAF Regulation Nº 0524/2001, on Management of National Biodiversity Conservation Areas, Aquatic Animals and Wildlife provides guidelines on NBCA establishment and zoning and also on restricted activities and development fund establishment and the rights and duties of state agencies in NBCA management.

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Decree on the Preservation of Cultural, Historical and Natural Heritage requires that in order to prevent exploitation of relics and antiquities, any person who discovers archaeological relics or a cultural site must inform the provincial and district offices within three days

In addition to the above Lao PDR statutes and regulations, the GOL is also a signatory of the following international conventions that may have a bearing on transmission and distribution projects.

7. IDENTIFICATION AND PRIORITIZATION OF REGA TECHNOLOGIES 7.1 GHG Emissions Inventory for Lao PDR The first national inventory on greenhouse gases was started in 1997 by utilizing the Guideline of the Intergovernmental Panel on Climate Change (IPCC). The inventory has been conducted in 4 main fields covering energy, forestry and land use change, agriculture and waste. The greenhouse gases, which have been surveyed, are carbon dioxide (CO2), methane (CH4), carbon monoxide (CO), nitrous oxide (N2O), nitrogen oxide (NOx). The multipliers used in this inventory utilized the absolute value of the Inter-government Panel on Climate Change regarding the default values (IPCC default values). From the most significant survey results, the emissions of the greenhouse gases of the various sectors as indicated in the table below, it can be noticed that the distribution of the carbon dioxide (CO2) is mostly created by the forestry sector; for instance, it was caused by the putrefaction which reached to 9,247.84 Gg, followed by the on-the-spot burning up to 6,752.67 Gg, the external burning up to 628.16 Gg and the energy sector up to 414.9 Gg. However, the natural absorbing resources as well as the forest changing conditions and a variety of plants are still abundantly capable of absorbing those non-toxic gases, which increased up to 104,570 Gg annually. As for the distribution of methane gas (CH4), it is emitted from all sectors. As for CO, N2O and NOx gases, they are found primarily in the fields of energy and forestry. Table 7.1: The National Inventory on the Greenhouse gases Emission (Gg*)

CO2 CH4 CO N2O NxO

Energy Sector

Fossil Fuel consumption 414.9 Traditional biomass burned for energy 22.75 157.92 0.12 4.18

Agriculture Sector

Enteric fermentation 97.92 Manure Management 14.38 Rice cultivation 158.97

Forestry Sector

Change in Forest and woody Biomass

-121,614.00

Forest conversion: Aboveground CO2 released from on –site burning

6,752.67 29.5 257.8 0.2 7.3

Forest conversion: Aboveground CO2 released from off-site burning

628.16

Aboveground CO2 release from decay 9,247.84

Waste

Landfills 11.2

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Waste water 0.23 Grand Total: -104,570 312 258

0 7

Source: Science, Technology & Environment Agency, 2000. (STEA) • 1Gg=109 g

7.2 Technology Needs and Priorities for Mitigating Greenhouse Gas Emissions For the Energy Sector 7.2.1 Technology Needs and Priorities for Energy Sector

Hydropower

The stream of big and small rivers that flow throughout the year in some areas is potentially capable of generating electric hydropower by constructing the hydropower dams. Beside, water in a large-scale irrigation canals’ plain area can be used to operate a small-scale electric hydropower station as well. This mentioned technology is considered the centrally planned electric hydropower production, which has cost of electricity production up to US$0.03/Kilowatt-hour.

The Flowing River Electric hydropower A water current of some small flowing streams may have potential, which can be applied to produce a small-scale electric hydropower station. The above-mentioned mode of electricity production has been applied as the foreign technology, which covers the production capacity of up to 60 to 200 watts. This above-mentioned mode of electric hydropower production is called the isolated or single type of electricity production, which has the cost of production of up to US$0.036/kilowatt-hour.

Table 7.2: General Summary Regarding the Assessment of the Cost of Electric Energy Production

Technology Price of Electricity / Energy

(US$/kilowatt-hour) The Centrally-Integrated Electricity production System

Hydropower

The Single or Isolated Type of Electricity Production

The Water Flowing Hydropower The Solar Photovoltaic Power

The Biomass Gasified Electricity Production

Using the Vegetables and Agricultural Wastes Using Firewood

0.03 0.036 0.60 0.15 0.13

Source: Assessment Report on Technology Needs and Priorities for Mitigating Gas Emissions, STEA, April 2004

Table 7.2 above illustrates the options of basic technology and the cost of electric energy production. And from this table, we can classify the sequences of mode of electricity production in terms of the effective reduction of the greenhouse gas emissions and the cost; for example, the first place is hydropower. The next least expensive is the flowing stream of electricity power generation, the wood burning as energy for electricity production, the vegetable waste and the agricultural waste as source of fuel and the solar photovoltaic panel as the final energy option.

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The Solar Photovoltaic Energy Production

The Solar Photovoltaic panel can turn the sunrays into the direct electric current with the physical process. The above-mentioned equipment consists mainly of 3 peripheral items such as Solar panel, Battery and Battery control Unit. The estimated cost of the solar photovoltaic is US$0.60/kilowatt-hour (the investment costs for the rural remote poverty-stricken areas is expensive).

The Biomass Electricity Power Biomass resources can describe many different fuel types from such sources as trees; construction, wood, and agricultural wastes; fuel crops; sewage sludge; and manure. Agricultural wastes include materials such as cornhusks, rice hulls, peanut shells, grass clippings, and leaves. Trees and fuel crops (i.e., crops specifically grown for electricity production) can be replaced on a short time scale. Agricultural wastes, sewage sludge, and manure are organic wastes that will continue to be produced by society. For these reasons, biomass is considered a renewable resource “www.epa.gov/cleanrgy/renew.htm#biomass”.

Biomass is one of important resource renewable energy. Energy from biomass is the traditional way and still practiced in the rural area at present. Direct combustion has been the most important process in converting biomass to other useful forms of energy. Biomass is also widely used in industry. Industries that rely on biomass as energy source include brick production, tobacco, lime production, rubber, and fish processing.

Biomass obtains its energy from the sun while plants are growing. Plants convert solar energy into chemical energy during the process of photosynthesis. This energy is released as heat energy when the plant material is burned.

Table 7.3: Biomass Technology Chart

Technology Conversion

Process Type Major Biomass Feedstock Energy or Fuel

Produced

Direct Combustion Thermo-chemical Wood, agricultural waste, municipal solid waste, residential fuels

heat steam electricity

Gasification Thermochemical wood agricultural waste, municipal solid waste

low or medium-Btu producer gas

Pyrolysis Thermochemical wood agricultural waste, municipal solid waste

synthetic fuel oil (biocrude) charcoal

Anaerobic Digestion

Biochemical (anaerobic)

animal manure, agricultural waste landfills wastewater

medium Btu gas (methane)

Ethanol Production Biochemical (aerobic)

sugar or starch crops wood waste pulp sludge grass straw

Ethanol

Biodiesel Chemical rapeseed Biodiesel

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Production soy beans waste vegetable oil animal fats

Methanol Production

Thermochemical wood agricultural waste municipal solid waste

Methanol

Source: www.oregon.gov/ENERGY/RENEW/Biomass/BiomassHome.shtml

Biomass technologies use renewable biomass resources to produce an array of energy related products including electricity, liquid, solid, and gaseous fuels, heat, chemicals, and other materials. Biomass power plants burn biomass fuel in boilers, the heat released from this process is used to heat water into steam to turn a steam turbine to create electricity, this method that was born many years ago and consist in installing spark ignition engine or dual-fuel engine.

The industrial sector produces thermal output and electricity from biomass primarily from combined heat and power (CHP) facilities in the paper, chemical, and food-processing industries. Power plants that generate electricity also produce useful heat and steam using CHP technology. Heat is a by-product of producing electric power using biomass. Steam produced in a biomass-fired boiler can both generate electric power and supply industrial process heat. Cogeneration is the combined production of electricity and process heat.

“www.oregon.gov/ENERGY/RENEW/Biomass/Cost.shtml”.

The biomass fuel is burned in a boiler to produce high-pressure steam. This steam is introduced into a steam turbine, where it flows over a series of aerodynamic turbine blades, causing the turbine to rotate. The turbine is connected to an electric generator, so as the steam flow causes the turbine to rotate, the electric generator turns and electricity is produced.

”eereweb.ee.doe.gov/biomass/electrical_power.html”.

Biomass gasifiers operate by heating biomass in an environment where the solid biomass breaks down to form a flammable gas. This offers advantages over directly burning the biomass.

7.2.2 Disadvantages and Shortcomings

With regard to technology needs and priorities within the above- mentioned sectors, there are a number of main difficulties as follows:

• Although the Centrally-Integrated Electric Hydropower Network Mode is

considered the form of low investment cost per unit price, there is a need to also consider the high cost of electric power cable extension network to the rural remote poverty-stricken areas due to their location in mountainous areas. Therefore, the investment costs for the rural remote poverty-stricken areas is expensive, making rural electricity development the most difficult field of development.

• The biomass gasifier electric power production is another option with the lower cost of production; however, it mainly needs the utilization of wood and it is still regarded as an appropriately optional mode of the power production.

• The Solar Photovoltaic Power is a useful option for household lighting, but the cost of production is relatively high compared to local hydro (Pico Hydro).

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7.2.3 Methods of Problem Solution

To overcome the above-mentioned difficulties, it is necessary to be aware of some of the most important measures as followings:

• The utilization of the locally existing potentials is primarily necessary for the

expenditure comparison of some small- scale hydropower dams or the utilization of hybrid system that can offset the shortcoming by using pumped water storage technology that can convert solar energy into a storage form.

• The construction of the small-scale electric power stations do not have high cost of production and is realized the there are a great many areas with prevailing conditions for electricity development due to the areas have been possessed with geographically higher altitudes of landscapes and abundantly saturated with water resources.

• To enhance the energy conservation and to apply the utilization of the higher efficient technology.

• To extend the utilization of the advanced technology. • To increase the social awareness and acknowledgement about the efficient

Energy consumption. 7.3 Optional Ways of the Energy Utilization for Dwelling Sector 7.3.1 Optional Ways for the Energy Utilization into Cooking In the following table, it shows the price-benefit analysis results of various types of cooking stoves. From this table, it is clear that cooking has to change to the utilization of the more economical cooking stoves, which must consider both the cost of the stove and the cost of the fuel. Electric cookers can be a better and more appropriately option than other kinds of cooking because of the lower cost and lower fuel consumption as compared to the utilization of the charcoal stoves and gas stoves, but the method of using electric cooking stoves is appropriate only within the areas where there is grid-based electrical supply.

Table 7.4: The Cost Benefit Analysis Regarding Various Cooking Stoves

A Varity of Cooking Stoves Total Cost (US$)

Annual Fuel Utilizing Cost

(US$)

CO2 Emission (Tonnes/Year)

Traditional Cooking Stove -Wood-burning stove -Charcoal Stove

16 58

15 55

5.25 1.90

Economized Cooking Stoves -Economized Wood-burning Stove -Economized Charcoal Stove

12 41

10 39

3.52 1.33

-Gas Stove 85 10 0.54 -Electric Cooker 33 13 0


Remark: There is currently no emission of greenhouse gases from the use of electric cookers in the Lao PDR due to the energy resource for electricity production coming from hydropower.

7.3.2 Optional Ways for the Provision of Lighting

The table below shows the efficient development of the light, has been utilized in cities, towns, countryside and commercial sectors. The energy reduction methods below which use the energy with high efficiency (36-watt fluorescent light tube, compact fluorescent tube and

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electronic light tube) or a number of advanced technology using recycling energy (solar photovoltaic energy lamp and household solar photovoltaic energy system).

Table 7.5: The Efficient Development of the Electric Light/Lamp

Currently Utilized Technology

Recommended to Change to

Utilize New Technology

Sector The Increase of Light Efficiency

(%) Light bulb 36-Watt fluorescent light Household 70 40-Watt fluorescent light 36-Watt fluorescent light Household 8 40-Watt fluorescent light Compact Fluorescent Tube Household 17 Light bulb 36-Watt fluorescent light Commercial 70 40-Watt fluorescent light Fluorescent light Commercial 8 36-Watt fluorescent light Compact Fluorescent Tube Commercial --- Source: Assessment Report on Technology Needs and Priorities for Mitigating Gas Emissions,

STEA, April 2004 The annual energy-economizing assessment and benefit receiving (per year) is shown in table below: Table 7.6: The General Summary of the Assessment on the Utilization of the

Energy for Lights

Currently Utilized

Technology

Recommended to Change to Utilize New Technology

Sector Annual Energy Saving

kWh/Year)

Received Benefit (Year)


Household (in cities)

21.9 10.64



-//-

8.76 0.00


Compact Fluorescent -//- 76.65 11.36


Household (in rural)

18.25 20.43



-//- 7.3 0.00


Compact Fluorescent -//- 11.68 21.81

Light bulb


commercial 100 2.66



-//- 0.00


Compact Fluorescent -//- 0.00

Source: Assessment Report on Technology Needs and Priorities for Mitigating Greenhouse Gas Emissions The cost of investment for the change to the new technology recommended utilizing can be estimated as follows:

Compact Fluorescent Light US$ 2.22 40-Watt Fluorescent Light US$ 3.18 36-Watt Fluorescent Light US$ 3.18

7.3.3 Optional Ways for the utilization of Solar Photovoltaic Energy and Household

Solar Photovoltaic Energy System The solar photovoltaic energy lamp is a single compact fluorescent lamp and a mobile type of PV panel and battery unit. The compact fluorescent lights are generally ranging from 6

66

Watt, while the solar panel is not necessary on the house roof and its size is only 10 Wp. The above-mentioned technology system consists of one unit of 6 Amp-hour-dry-cell battery. The solar photovoltaic energy lamp can be basically used up to 2-3 hours, which is dependent on the battery charge, and the household solar photovoltaic energy system (SHS), which is used. However, the system can also be used with television sets, radio and other less power consuming utensils. This technology comprises 2 compact fluorescent lamps (general, 18 W florescent light); a charger unit; a 12-voltage battery ranging from 40-100 ampere-hour and the 35-100 Wp solar panel. The utilization of the solar photovoltaic energy depends on its system size; particularly, its solar panel and battery. The household solar photovoltaic energy system can be used up to 4-5 hours, but its duration of utilization is depended on its system size. The solar photovoltaic energy lamp can replace the use of a normal light bulb. The household solar photovoltaic energy system can be used to replace up to 3-4 normal light bulbs. Table 7.7: The General Summary of the Assessment on the Recycling Energy

Utilization as the Lights

Light Bulb Solar Photovoltaic Lamp

Household Solar Photovoltaic Energy

System Total Cost (US$) 1 2 181 Cost/Energy used (US$/Mega Joule)

0.003 0.075 0.153


Remark: The household solar photovoltaic energy system can be used to replace 3 normal light bulbs.

The optional way of utilization of the energy into cooking is regarded as using of electric cooking stove as being more appropriate way than another due to its low cost and energy saving. Whereas, the optional way of the light utilization, it is regard as the use of 36W fluorescent light tube can economize energy better than the other types of light tubes. The option of the renewable energy utilization for lighting purposes is considered better because the solar photovoltaic energy lamp that has low cost equipment installation and it could save energy appropriately better. 7.3.4 Disadvantages and Shortcomings

With regard to the needs for the technology and priorities within the above-mentioned sector, some main difficulties as follow:

• The utilization of the electric cooking stove is considered low cost and fuel saving, but it is suitable only for areas with grid electricity.

• The electric current cost is still expensive when compared with incomes. • The cost of the solar photovoltaic energy system is relatively high. • The energy production of the solar photovoltaic system is dependent on the

nature and there are some constraints in its utilization.

7.3.5 Problem Solving Procedures To overcome the above-mentioned problems, it is necessary to be aware of some important measures as follows:

• Economized charcoal stove should be used. • Use compact fluorescent lamps. • Government should consider some measures on the cost of importing some

equipment units, which are regarded, as the most important and necessary.

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• Provide an awareness of energy conservation the society (the public); especially, the problem that is involved with energy used in the householders’ lives and people’s ways of life in community.

• Develop people’s self responsibility and efficiently build up better habit for general public in economizing energy consumption as follows: o Switch off the light before leaving the room; o Put out the fire in the stove when cooking is finished or not cooking.

7.4 Technological Options and Reduction of Greenhouse Gas Emissions in

Transportation Field

Vehicles in the Lao PDR are composed of different types and brand with which its growth rate is rapidly increased annually; especially, motorcycles. The overwhelming majority of vehicles belong to private ownership and a large number of used vehicles imported from abroad. These Vehicles do not only consume diesel, but also use a great deal of petrol. Transportation services comprise two categories such as transportation of goods and public transportation. An urban type of the public transportation consists of; for example, tricycles with engines (Tuk Tuk and jumbo), taxis, two-row-seat minibuses, vans and buses. Whereas, the vehicles for goods transportation are small-scale lorries, medium type trucks and large and heavy loaded trucks. Those above-mentioned vehicles are fairly old with worn-out engines and not only technically adapted, but also technically lacking inspection and used for many years. Therefore, those vehicles are considered the main cause of increasing air pollution problems in big towns and cities nowadays. Apart from that, they are still creating traffic problems in big cities ranging from traffic flow complication rush hour traffic jam, road accidents and careless practice in urban road-using regulations. With regard to the scientific research and the comparison of exhausted gas emission ranging from carbon dioxide (CO2), carbon monoxide (CO), nitrogen (NOX) and other gases from a large number of different vehicles in the transportation system can be noticed that; for example, the usage of the mass or public transportation in big cities is the best choice. In an attempt to better reduce toxic gas emission, such as CO2, into the atmosphere, road accidents and manage to concretely control and get rid of the above-mentioned problems. Periodically, the government should determine some appropriate measures and procedure step by step as follows:

The Technology Needs and Priorities:

Use high technology and good quality vehicles, Use fuel economized and less toxic gas emitted vehicles; especially, mass or

public means of transportation such as buses in big cities instead of using petrol-mixed consuming tricycles with engines like Tuk Tuk-Jumbo, and particularly using 4- stroke motorbikes instead of 2-stroke ones.

The Disadvantages and Shortcomings:

With reference to the needs for the technology and prerequisite in the above-mentioned sector, obviously it can be considered that there are some relevantly difficult aspects as follows:

Expensive prices of vehicles, Lack of restrictive vehicles and petrol control procedures, Lack of adequate and concise rules and regulations.

The problem solving procedures:

In order to overcome the above-mentioned problems, it is necessary to be aware of some important measures as follows:

Strictly control the import of used vehicles in correlation with the determined technical standard,

Issue rules and regulations on the prohibition not to produce and import all types of petrol-mixed consuming Tuk Tuk-Jumbo,

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Strictly control on the import of less petrol standard, leaded petrol and environmentally harmful petrol,

Determine standard on exhausted/toxic gas emissions of urban vehicles, Pass the rules and regulations to prohibit the import of the 2-stroke motorbikes, Strictly control the technical inspections on vehicles with the use of modernized

circumspectly inspecting apparatus, Strictly enforce the rules and regulations and the laws and orders, Develop the mass or public means of transportation (buses) in big cities in order

to reduce the use of Tuk Tuk-Jumbo, taxis and private cars (short-term), Ensure that buses use low sulphur diesel and ensure that engine fuel injectors

are regularly serviced to prevent visible smoke population. Support the use of the 4-stroke motorbikes in replace of the use of the 2-stroke

ones (medium-term), 7.5 Technological Options and Priorities on Reduction of Greenhouse Gas

Emissions in Agriculture Field

The Technology Needs and Priorities: As it is all well known, the greenhouse gases emitted from agriculture are methane and nitrous oxides from ruminant animals (including cattle), animal wastes, especially from farmed confined animal such as pigs and chickens, wet rice plantation and the use of fertilizers. The optional ways for reduction of the greenhouse gas in the agricultural field include 3 main methods as follows:

The Breeding of Masticating Animals:

Possible options are to improve the animal feeds through the chemical improving process, add additional animal feeds to accelerate the production, which will reduce the naturally bred animals so as to change into breeding animals in enclosure farms. Supplementary animal feeds (MUB) are enriched with minerals and essential proteins, but the problem is the purchase funding and the domestic animal feed producing possibility is still low.

The Wet Rice Plantation: In order to reduce methane gas, there are two ways for the rice plantation: firstly expand the second season rice crop plantation. As for the all-time-water-flooding land, it is advised to drain water away or allow it to be dry for a period of time. Secondly, it is to increase the rice plantation productivity. In ordinary wet rice plantation, mostly farmers use the indigenous rice species; whereas, the second rice crop plantation, it is recommended to use the newly mixed hybrid rice species so as to suit with newly applied techniques of rice plantation.

The Use of Natural Fertilizers (Manure or Vegetable Waste Matters): Through the studies of collection of animal dung or natural fertilizers at the hole of the waste dump according to applied techniques, methane gas can be produced for the cooking fuel and for other purposes, which is regarded as effective results and harmless to the environmental atmosphere. On the contrary, the remaining matured waste can be used as fertilizers that do not emit methane at all. Therefore, the appropriate method to reduce greenhouse gas in using natural fertilizers is to enhance the use of the use of biogas digester.

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Table7.8: General Summary of the Methane Gas Reduction (CH4) in Agricultural Field

The Original Source of (CH4) in Agricultural Field

The Reduction Methods

Masticating Animals Improve animal feeds through Animal feed strategies Wet Rice Plantation Soil Drying Techniques Use Natural Fertilizers - Use biogas digester with A small-scale cooking stove (8-

16 m3). - Use biogas digester with A large-scale cooking stove (> 30 m3)

The methods of methane gas reduction (CH4) in the agricultural field in the Lao PDR; especially, the breeding of the masticating animals should have to improve the animal feeds through the supplementary animal feed strategies, while the cultivation (rice plantation) should have to use the soil drying techniques. As for the use of the natural fertilizers, it needs to isolate the methane gas (CH4) by using the biogas digester.

The Disadvantages and Shortcomings: With reference to the technological needs and prerequisite in the above-

mentioned sector, a number of difficulties can be distinguished as follows: Animal breeding is still implemented in a natural and scattered ways, Rice plantation is still naturally depended on the monsoon rainwater, using

the indigenous rice species, the second hybrid-mixed rice crop species is still limited and in some areas where used-to-be-second rice crop plantation land is now deserted and not farmed any longer,

Natural fertilizer utilization in people’s rice farms is not technically matured through the methane isolation process (CH4).

The Problem Solving Procedures:

With regard to the above-mentioned problems, it is necessary to be aware of some important measures as follows:

Support the enclosure animal breeding and enhance the use of the supplementary animal feeds,

Expand the second rice crop farming areas and increase the rice plantation productivity,

Promote farmers to practice a variety of newly developed rice production techniques,

Support farmers who raise animals to construct the complete unit of the biogas digester.

7.6 Technological Options and Priorities on Reduction of Greenhouse Gas

Emissions in Forestry Field

The Technology Needs and Priorities: The methods of reduction of the greenhouse gas emissions are appropriately applied in the Lao PDR as follows:

1. The Conservation of the Natural Carbon Dioxide Absorption Resources, which

consists of: The Conservation Areas Construction Areas Construction: In 1993, the

Government of Lao PDR has announced the establishment of 18 Conservation Forest Areas, in accordance the Prime Ministers Decree No. 164/PM, in which they are well known as the National Biodiversity Conservation Areas up until the present time. Since 1993, two more forest areas have been additionally announced, which has been accounted for 20 areas (NBCA) covering 3.3 million

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hectares, which constitutes approximately 14% of the total area of the country (Lao-Swedish Forest Co-operation Project, 2001).

The Permanent Cessation of Slash-and-Burn Shifting Cultivation Method: In order to protect the environment and forest resources, the permanent cessation of slash-and-burn shifting cultivation method to the priority within the national level action plans. Hence, to reduce the shifting cultivation areas from 25,000 hectares in 2001 to 17,000 hectares and leading to entirely the permanent cessation of slash-and-burn shifting cultivation method in 2003.

The Forest Administration-Management: From the 1993 World Bank Report, it was acknowledged that the unplanned timber cutting has led to the annual loss of 30,000 hectare-forest areas and from the wrong timber cutting techniques to the annual loss of 10,000 hectares.

2. The Expansion of the Naturally Carbon Dioxide Absorption Resources, which

comprises: The Forest Rehabilitation: During the period of 1975-1992, there was an

assessment of the Teak plantation which accounted for approximately 6,676 hectares and during period of 1993-1997, there was approximately 42,194 hectares (including 14,000 hectares in 1997), between 2001-2002 approximately 23,000 hectares. And it is expected that in 2005 about 30,000 hectares.

The Villagers’ Forest Management: This idea stimulates the people’s co-operation and contribution in forest conservation and protection.

The conservation and the expansion of the carbon absorption considered the best method of reduction of the Greenhouse-effect-toxic-gas emissions is appropriately applied in the Lao PDR. One of the most important strategic action plans is the action plan of the slash-and-burn shifting cultivation cessation, which is the entirely important tasks and directly involved in the living condition of all mountainous people.

The Disadvantages and Shortcomings: With regard to the technological needs and prerequisite in the above-mentioned sector, a number of difficulties that can be identified as follows:

The implementation of the rules and the regulations and the laws and orders is not appropriately carried out.

The rules and regulations of the forest, land and village forest classification are not concisely implemented.

The annually governmental planned-timber-cutting-permitting quota is not exactly carried out in principles in some rural areas.

The forest equipment, tools and vehicles used for the forest administration and management are not adequately provided.

Knowledge and experience in the management of the tree-farmed forests are not adequately high.


With regard to the above-mentioned problems, it is necessary to be aware of some important measures as follows:

The short-term and long-term guidelines in the implementation of the slash-and-burn shifting cultivation methods are as follows:

- Short-term Guidelines: Aiming to guarantee staple food and creating family incomes, it should promote the agriculture and forest activities in the former slash-and-burn shifting cultivation areas. Guarding the relocation of people to live in the highly mountainous areas. Improving areas to become more and more abundantly wealthy.

- Short-term Guidelines: Aiming to reduce the slash-and-burn-shifting cultivation areas by increasing the rice productivity using a variety of hybrid grains promote the use appropriately well grown

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plants within the certain areas. Using the rules of laws to protect indigenous natural forests.

Increase the efficiency in timber culling with the appropriately correct woodcutting technique manual textbooks.

Increase the efficiency in timber processing on the basis of the industrial development patterns.

Encourage the tree sapling plantation for farmers and people. Encourage and support the integrated farming and animal husbandry

in parallel with tree farming activities. Precisely determine each forest classification provided in accordance

with the forest law (Forest Act). Prohibit any actions to adapt or destroy the abundantly wealthy forest

areas for the tree-planting purposes. Organize the grant-land-forest-land-forest permission to local people. Upgrade the forests’ staff quality and quantity.

7.7 Technological Options and Priorities on Reduction of Greenhouse Gas

Emissions in the Toxic Waste Field The methane gas emissions into the atmospheric layer are caused partly by the chemical reaction processes of the waste matters dumped in the garbage dumping areas. The data collection on waste materials in the Lao PDR at present is not systematically conducted yet. Hence, the average of the waste matter variables has mainly derived from the survey results in five large cities, for example Vientiane Capital, Luang Prabang, Savannakhet, Champasak and Saravan. At the present time, the waste material assessment and the burning of the waste material are not systematically carried out; therefore, the evaluation of the greenhouse effect toxic gas emissions with which the waste matters has not been mentioned due to the lack of waste matter composition data; particularly, in urban areas. The waste matter destruction is mostly operated within the garbage dumping fields only in large cities; whereas, in the rural areas, waste material is scattered and decayed around without treating them in the properly arranging manners. The Greenhouse effect toxic gas emissions in the rural areas are regarded as less than the total amount in big cities. In 1990, the total amount of waste matters accounted for 88 Gg; in this case, approximately 0.62% could be dumped and the methane emissions accounted for 11.2 Gg7. Wastewater consists of high level of organic matters including wastewater running from households, shopping centres and certain amount from manufacturing industries. Wastewater running from these places can emit methane gas to a large certain amount, into atmospheric layer. The indicator, which indicates the value of wastewater from households and shopping centres, is administered to find the BOD value and that from manufacturing industry is tested to find the COD value. At present, in the Lao PDR, there is no complete detail of data and information on wastewater drained throughout the country. The currently wastewater assessment is based mainly on the number of citizens living in the urban areas; particularly, in households and commercial shopping areas. The BOD value and the toxic gas emission assessment are applied with the absolute value, which the Intergovernmental panel on Climate Change (IPCC) has determined. From the 1990 data, it is found that the BOD value in wastewater accounted for 0.0146 milligrams per litre (calculated from 5 towns with approximately 708,000 inhabitants), from which this wastewater could be technically treated constituting only 10%. The methane gas distribution in 1990 accounted for up to 0.23 Gg. However, in the near future, it is necessary to be better aware of the waste material, especially, on the survey and planning tasks in getting rid of garbage or treating

7 The First Issue of Mass Communicative Correspondence Release on Climate Change, STEA, October, 2000.

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wastewater. It is also necessary not only better treating techniques, but also finding out appropriate places where the greenhouse effect toxic gas emissions will emerge as follows:

Wastewater and polluted water from industry and handicraft, Use of the fairly out-of-date technology, which modernized advanced countries

have not allowed using any longer, and constituted less than 70%, Caused by the use of fuel into the steam boiler such as, firewood, sawdust and

wood shavings, diesel and bunker/fuel oil, and coal, Caused by the use of chemical substances into the process of production, Caused by the inappropriately eliminating practice of the waste material from

factories themselves.

The Technology Needs and Priorities: In order to resolve and reduce the greenhouse gas emissions in the waste matter field, the needs for technology and priorities are importantly required as follows:

Utilization of modernized advanced technology with efficiency, which constitutes more than 80%.

Industrialized and handicraft development must be closely related with environmental protection as follows:

- Construct the safe storehouses and isolate the waste matters within the factories correctly and appropriately.

- Construct the polluted water treatment system correctly and appropriately so as to guarantee the tested to suit the standard determined.

- Construct the polluted toxic smoke and dust treatment system in manufacturing industries and handicraft where the steam boilers are used.

The Disadvantages and Shortcomings: With regard to the technological needs and priorities in the above-mentioned sector, a number of difficulties that can be indicated as follows:

It is seen that waste material elimination is treated with careless manner and incorrectly applied to suit the technically approved principles; for example, the waste material elimination tends to be carried out by the factories themselves or on-the-spot burning.

Polluted water treatment was carried out in a careless manner with quality less than the approved standard levels.

With the out-of-date style of technology and with utilization efficiency lower than 70%.

With the fuel utilization in the steam furnace such as firewood, sawdust, wood shavings, diesel, coal, and so on.


In order to overcome a number of above-mentioned difficulties, it is necessary to be aware of some important measures as follows:

To draw attention to implement and diversify the rules and regulations which are related to the environmental tasks.

To utilize the advanced technology into eliminating, reusing, recycling and/or reclaiming waste materials.

Industry and handicraft development must be affiliated with the environmental protection.

To improve the existing polluted water treatment system to become appropriately operated.

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8. Conclusions and Recommendations 8.1 Conclusions

(a) The total energy consumption in the world has been growing; similar growth is

expected to continue in the future. Conventional energy sources such as coal, oil, natural gas, nuclear and hydropower account for 85% of the global primary energy consumption. The share of fossil fuels in the total supply of conventional energy is about 90%.

(b) R&D institutions of developing countries have a vital role in the development, local adaptation and promotion of RETs. These institutions have much to gain from regional networking with similar institutions in other countries through sharing of experience, joint and coordinated research and study tours.

(c) The energy demand within Lao PDR is gradually increasing and the wood fuel biomass energy remains the main source for energy consumption in rural areas, however, other energy forms such as electricity, petroleum, gas and coal are also important in some cases.

(d) Wood energy is and will remain an important sub-sector for energy consumption in Lao PDR even although electricity, oil and gas sub-sector has been increasing rapidly in the last five years. The consumption of wood and other biomass fuels is expected to increase in the foreseeable future. The fuel wood energy development should be integrated into rural energy supply strategies and pursued as a common task for all relevant sectors.

(e) There is a lack of an integrated national energy policy and no clear or existing vision to cover all energy sub-sectors.

(f) In the area of baselines and scenarios, the main gap is lack of data and information of all sub-sectors of energy.

(g) Different approaches are used in formulating strategies for different sub-sectors, some sectors, like the power sector, are more structured than others, with coal and fuel-wood and other biomass sub-sectors having no clear strategies.

(h) The financial factor is one of the most important issues that contribute toward the success of the planning and implementation process in Lao PDR, but the Government has constraints in financial terms in what it can do. Based on previous developments it is indicated that most of funding sources for energy sector comes from the loans and grants of multilateral financial organizations and international donors, and that local participants into this sector are still limited.

(i) There is a lack of Renewable energy / efficiency energy Promotion Fund Lending conditions and procedures are complicated and are often changed, Bank/financial organizations lack the necessary capacity to evaluate EE&RE projects, Banks also face high transaction costs due to the smallness of potential EE/RE projects, Credit institutions are hesitant to lend to EE/RE projects due to perceived high risks and the long time needed to recover the investment cost.

(j) Renewable energy / efficiency energy financing is feasible but there are risks and barriers that need to be resolved. It requires detailed analyses to be carried out by both the PESCO and the financier. Performance contracts, insurance, owners’ commitments & other safety measures are key elements that enhance its attractiveness over other investment opportunities.

(k) The limitation of manpower with the knowledge of know-how, experience and skills in strategic planning and those of implementing the plans. On the contrary, distributing that manpower from ministerial to provincial workplaces is not balanced. In addition, responsibilities among agencies, which are in charge of energy sector, are not clearly described and co-ordinated. The separate energy organizations also mean reduction of efficiency of planning, implementing and managing energy resources. At present, there is only the hydropower sub-sector becoming the main priority for the energy sector, however other energy type sub-sectors are not well determined and not in under the single responsibility of any one organization.

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(l) Energy from renewable energy / efficiency energy currently plays a relatively minor role in the global energy system. However, it must have a progressively increasing role if the objectives of energy for sustainable development are to be achieved.

(m) Policy options and strategies for increasing the scale and application of energy / efficiency energy sources must take account of the diversity of national circumstances, as well as of technology options.

(n) It requires reliable support from the government in the form of incentives. The creation of an enabling policy environment, with appropriate institutional arrangements at the national level, would accelerate the development and wider scale application of new and renewable sources of energy. Available policies in Lao PDR include the following:

Linking new and renewable energy policies to sustainable development policies and to actions consistent with international agreements;

Legal and regulatory policies and frameworks for attracting investment; Providing a clear policy message to mobilize all key actors and catalyze them

into action. (o) Cost of renewable energy devices is still high while income of rural households is

low, Lack of large enterprises who supply efficiency energy / renewable energy equipment and services, developers hesitate to invest in efficiency energy / renewable energy projects due to high risks and difficulties in recovery of cost investment.

(p) The application of RE & EE technologies could be considered as effective technological measure to abate GHG emissions and is a priority in the energy sustainable development program of Lao PDR.

(q) As for the Lao PDR, the socio-economic development must be implemented with efficiency, continuation, and stability so as to guaranty the balance between the economic growth and the social and culture development as well as the eternally sustainable environment protection.

(r) Consequently, the utilization of advanced technology is considered which needs to be developed and resolved to suit the real situation of each field of works.

8.2 Recommendations Throughout the 1990s, barriers to investment hampered the ability of the energy sector to maintain capability and replace reserves. In spite of the growing call for investment many barriers remain and reduce the ability to attract the necessary funds, both domestic and foreign, the energy supply security in the face of changing national energy policy that the new energy strategy up to 2020 may (will) change in the energy outlook of the Lao PDR. The challenges of energy planning process are by nature crosscutting and are not well integrated and it is therefore recommended to:

(a) Review the existing policy measures with view to developing more cost effective

policies and to adjust the new energy policy that will ensure all energy sub-sectors are integrated to expand the affordable, reliable, sustainable energy supply and sustainable environment.

(b) Put in place together a long-term energy policy framework and need to define long-term goals relating to sustainable energy and emerging energy issues identified with sectoral planning. The long-term energy planning and objectives.

(c) To ensure reliable, affordable and sustainable energy supply for country, the strategic plan shall be focused on hydropower, new and renewable energy, coal and reduce dependence on wood fuel energy and imported fuel for energy.

(d) The capacity building for energy planner is required for both central and local level including study tour for policy maker in developed countries.

(e) The existing national study must be maintained, expanded and strengthened to coordinate and share information together within line ministries and agencies. The Department of Electricity shall be act as secretary for all energy sub-sectors and be in charge for establishing energy database and information exchange.

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(f) Energy database should be established to national and local levels. The private and public agencies related to energy development should be given access to information to support activities. More key data on energy supply should be collected to support energy policies. The co-operation among relevant sectors concerned should be strengthened and the subject should be integrated into training curricula of relevant sectoral evaluation.

(g) The introduction of innovative financing and credit schemes, including concessional loans to users as well as to manufacturers, is an option that can provide the needed impetus for the expansion of energy efficiency / renewable energy applications.

(h) Grant financing & low interest rate financing from donors & overseas financial institutions have the potential to fulfill the opportunities once barriers outlined are resolved.

(i) It is urgently necessary to guaranty providing the fund for the environmental protection. The most important thing is to raise money for the contribution for the National Environmental Fund simultaneously in attempt to not only search for the financial assistance from friendly international agencies, but also to better promote the bilateral and multilateral cooperation.

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REFERENCES CADDET Renewable Energy, (Web site: www.caddet-re.org)

Electricité du Laos: “Annual Report 2003“, Electricité du Laos, Ministry of Industry and

Handicrafts, Lao PDR, 2003. Electricité du Laos: “30 Years Report 1975-2005“, Electricité du Laos, Ministry of

Industry and Handicrafts, Lao PDR, 2005. (http://www.efe.or.th/index.php?option=content&task=view&id=11&Itemid=35)

International Development Association (IDA), Final Report: “Evaluation of Rural

Electrification Socio-Economic Survey Establishment of Database for Rural Electrification Planning in Lao PDR”, Department of Electricity, Ministry of Industry and Handicrafts and IDA, Vientiane, Lao PDR, August 2004.

Lao PDR: “National Poverty Eradication Programme (NPEP)”, Eight Round Table

Meeting, Vientiane, September 4-5, 2003. Ministry of Industry and Handicrafts, Department of Electricity: “Environmental

Management Standard for Electricity Projects”, Ministry of Industry and Handicrafts and UNDP, Vientiane, Lao PDR, 2003.

Ministry of Industry and Handicrafts, Department of Electricity, Final Report: “Rural

Electrification Frameworks Study”, Ministry of Industry and Handicrafts, Lao PDR, Prepared by Maunsell Ltd, New Zealand, November 2004.

National Statistical Centre: “The Report of the Population Count 2003”, carried out by

the National Statistical Centre, Lao PDR, July 2003). Nepal Country Report, Draft Report: “Promotion of Renewable Energy, Energy

Efficiency and Greenhouse Gas Abatement (PREGA)”, March 2004. Renewable Energy Technologies in Asia - A Regional Research and Dissemination,

Phase I: “A Summary of Activities and Achievements in Lao People’s Democratic Republic”, Development Technology Department; Science, Technology and Environment Organization (STENO), Lao PDR; and Energy Program, Asian Institute of Technology, Thailand.

Renewable Energy Technologies in Asia - A Regional Research and Dissemination,

Phase II: “A Summary of Activities and Achievements in Lao People’s Democratic Republic”, Development Technology Department; Science, Technology and Environment Organization (STENO), Lao PDR; and Energy Program, Asian Institute of Technology, Thailand.

World Bank: “Global Human Development Report (HDR) 2004”, World Bank, 2004.

Otto Rentz, Dominik Möst, Anke Eßer: “Current Development of Green IPPs:

Experiences, Challenges, and Strategies”, Workshop of the EC-ASEAN Green Independent Power Producers Network, in Universitätsverlag Karlsruhe, Germany, 15th of September, 2005

Science Technology and Environment Agency: “Assessment Report on Technology

Needs and Priorities for Mitigating Greenhouse Gas Emissions”, Science Technology and Environment Agency, Lao PDR, April, 2004.

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Science Technology and Environment Agency: “Lao PDR, The First National

Communication on Climate Change”, Science Technology and Environment Agency, Lao PDR, October, 2000.

The Lao’s People Revolutionary Party, Central Committee Executive Board: “The

Resolution of the 5th Session of the Central Committee Meeting”, Vientiane, Lao PDR, April, 2004.

United Nations Framework Convention on Climate Change (UNFCCC):

(http://cdm.unfccc.int/Reference/Documents) United Nations Framework Convention on Climate Change (UNFCCC): “Guidelines for

Completing CDM-PDD, CDM-NMB and CDM-NMM”, Version 04, 2005. Energy Efficiency and Renewable Energy Clearing House (EREC), Department of

Energy: “Renewable Energy: An Over View”, March 2001.

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Attachment 3.1: Renewable Energy Technology Projects in Lao PDR No. Project Names Location Capaci

ty (W)

Source of fund

Implemented Goals

Installed Year

A. Existing Renewable Energy Technology Projects 1 Battery Charging

Station (BCS) Ban Tangwai, Xonbuly District, Savannakhet

1,775 CTTE 45 Households 1997

2 Battery Charging Station (BCS)

Ban Phonh Ngam, Atsphangthone District, Savannakhet

1,875 SIDA 45 Households 1998

3 Solar Home System (SHS)

Xiengkhouang 75 SIDA Provincial Administrative Office

1999


Xamneua District, Houaphanh

75 SIDA km 12 Village 1999


Xiengkhouang 50 CTTE Immigration Office

1999


Saravan 75 CTTE Provincial Administrative Office

1999

7 SH + BCS Hybrid System (Rotation System)

Ban Phosy, Nasaythong District, Vientiane Capital

3,000 NEDO 105 Households 2000

8 Solar Pumping RETC 300 GOL Research Ongoing Projects

9 Gasification Project RETC 160 NEDO Research 10 Wind Pumping

Technology RETC 300 GOL Research

11 Mini Hydro Electric Technology

Luang Namtha 6,000 CIDA Research

12 Pico Hydro Electric Technology

RETC 500 GOL Research

Ideal Installed Project 13 Development of Mini

Hydropower Plant Ban Nam Long, Long District, Luang Namtha

6,000 GOL, CIDA

Research

B. Existing Biogas Digester Projects No. Project Names Location Capaci

ty (m3)

Source of fund

Implemented Goals

Installed Year

14 Biogas Digester 1 unit at Xamneua District, Houaphanh

16 CTTE Xamneua Hospital

1999

15 Biogas Digester 2 units at Vientiane Capital

16 CTTE Hygiene Institute and RETC

1999

16 Biogas Digester 3 units at Savannakhet 16 CTTE Ban Mouangkhai and Nhangsung, Khanthabuly District

1998

17 Biogas Digester 1 unit at Saravan 16 CTTE Pedagogy School of Saravan

1999

18 Biogas Digester 2 units at Champassak 16 CTTE Ban Sok Amnouy and Viengsay Secondary School

1999

19 Biogas Digester 1 unit at Attapeu 16 CTTE Ethnic non-formal School

1997

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Source: Report on Activities of Technology Research Institute, 1999-2004, Sciences, Technology and Environment Agency (STEA). CTTE: Canada-Thailand Tri-bilateral on Environment SIDA: Swedish International Development Agency NEDO: New Energy Development Organization (Japan) GOL: Government of Lao PDR CIDA: Canadian International Development Agency Attachment 3.2: Statistics of Pig Farms in Vientiane Capital City No. Name of Pig Farm (*) No. of

Pig Location Latitude

Degree Longitude

Degree Remark

1 Sivilay Hungheuang 180 Vientiane Capital 18.02 102.38 2 Keo Inthiphon 545 Vientiane Capital 18.11 102.38 3 Phan Sophapmixay 77 Vientiane Capital 17.53 102.37 4 Khamsone Keamany 131 Vientiane Capital 18.03 102.37 5 Boun Gnanong 156 Vientiane Capital 18.09 102.38 6 Pancha 77 Vientiane Capital 18.07 102.39 7 Chommany 20 Vientiane Capital 18.01 102.38 8 Neuang 35 Vientiane Capital 18.05 102.39 9 Phouvong Kolasak 535 Vientiane Capital 18.01 102.31

10 Phongsamouth 121 Vientiane Capital 18.05 102.43 11 Khamphay 223 Vientiane Capital 18.07 102.45 12 Souay 85 Vientiane Capital 18.06 102.31 13 Champhonh 142 Vientiane Capital 17.56 102.43 14 Khamsing Sisoutham 224 Vientiane Capital 18.12 102.39 15 Nang Chanh 139 Vientiane Capital 17.55 102.39 16 Vanit Farm 1 7,010 Vientiane Capital 18.08 102.42 17 Vanit Farm 2 4,812 Vientiane Capital 18.08 102.42 18 Vanit Farm 3 3,100 Vientiane Capital 18.08 102.42

Site visited carried out on 12 Oct 2005, by Lao NCA and all Lao NTEs

19 Chanthone 21 Vientiane Capital 17.55 102.38 20 Nang Kham 357 Vientiane Capital 17.51 102.37 21 Nang Vone 486 Vientiane Capital 17.53 102.45 22 Bounheng 104 Vientiane Capital 17.56 102.31 23 Liangkham 143 Vientiane Capital 17.58 102.52 24 Chanhpheng

Douangphachanh 1,234 Vientiane Capital 17.59 102.31

25 Bouaket 45 Vientiane Capital 17.59 102.29 26 Chin 61 Vientiane Capital 17.59 102.41 27 That Sisoubath 15 Vientiane Capital 17.56 102.45 28 Khamla 33 Vientiane Capital 17.59 102.39 29 Bounsou 15 Vientiane Capital 17.59 102.33 30 Phongphanh 21 Vientiane Capital 18.12 103.03 31 Say 26 Vientiane Capital 18.03 102.32 32 Sob Souanmone 18 Vientiane Capital 17.55 102.38 33 Loung Dom 35 Vientiane Capital 18.02 102.37 34 Nongphagna 111 Vientiane Capital 18.01 102.37 35 Damdouan Nonghai 45 Vientiane Capital 17.54 102.39 36 Done Naxay 36 Vientiane Capital 17.59 102.39 37 Khenphone Nongteng 1,112 Vientiane Capital 18.01 102.31

Total 13,618 Source: Department of Agriculture and Livestock, MAF. (*) The coordinates indicated in the table are estimates only.