Crypto Boom, Erratic Rains Cause Outages in Laos, Asia’s Clean Energy Export Hub

By Sudarshan Varadhan

BANGKOK (Reuters) – Higher demand for electricity in Laos due to cryptocurrency mining and erratic rains have led to power shortages, a consultant at its state utility said, revealing challenges to the country’s prospects as an exporter of hydropower to Southeast Asia .

Laos is dubbed the battery of Southeast Asia for its hydropower export potential, and its supply of the cheapest and most stable source of clean energy is crucial to decarbonizing the region that is struggling to expand solar and wind energy.

A political push to establish data centers in 2021 has led to a boom in cryptocurrency mining, which now accounts for more than a third of Laos’ energy demand, while reduced rainfall has restricted hydropower production, resulting in power cuts, said Somboun Sangxayarath, consultant to the state-run Electricite Du Laos (EDL).

Operators of energy-intensive crypto mining data centers seek cheap non-fossil energy sources, making Asian countries like Laos attractive.

Hydropower accounted for 80% of electricity generated in Laos over the last decade, most of which was sold by independent power producers in cross-border agreements with Thailand and Vietnam.

In the domestic market, EDL is the energy supplier and has become a net importer since 2021, requiring up to 600 megawatts (MW) of extra capacity at times of peak demand, which has more than doubled the debt-laden utility’s costs. , said Sangxayarath.

“During the dry season, we are unable to meet our demand, so we have imported more energy in the last two years than in the past,” Sangxayarath told Reuters on the sidelines of the Future Energy Asia conference.

Seeking to reduce imports, Laos is building 720 MW of hydroelectric projects, which are expected to be completed by the end of next year, Sangxayarath said.

To improve production reliability in a context of erratic precipitation patterns, the country intends to increase the percentage of non-hydro production to 30% by 2025, compared to the current level of just over 20%. Without major projects in the works, this seems unlikely.

“Coal, there are potential projects, but due to resistance from different organizations, getting financing for coal during this period is very, very difficult,” he said, adding that the country is also trying to build solar-hydro and wind power. hydrohybrid projects.

Laos said last year that it would not provide power to cryptocurrency projects that had not yet begun operations. Although the order is still in effect, it is still actively considering new investment proposals and looking to increase energy availability, Sangxayarath said.

(Reporting by Sudarshan Varadhan; Editing by Sonali Paul)