A wave of renewable energy deals, foreign investment and carbon market activity is sweeping across Laos, signalling a broader shift as the hydropower-dependent nation moves to diversify its energy mix and position itself for growing regional demand for green power.
In recent weeks, state utility Électricité du Laos Generation Public Company (EDL-Gen) has inked a partnership to develop floating solar systems, Attapeu province has approved a new 5-megawatt (MW) solar project backed by South Korean investors, and major wind and solar developments have advanced in the country’s south.
“This agreement demonstrates our commitment to adopting innovative technologies to meet rising electricity demand while reducing carbon emissions,” said Souksavath Sosoupanh, managing director of EDL-Gen, on 10 November when the company signed a partnership with South Korean firm CS Tech to install floating solar systems on its hydropower reservoirs.
These developments come as Laos pursues a more diversified power system. Under the government’s National Power Development Strategy for 2021–2030, the country aims to lift the share of variable renewable energy – mainly solar and wind – to 11 per cent by 2030.
The strategy envisions a future domestic mix of roughly 75 per cent hydropower, 14 per cent coal and 11 per cent solar and wind, positioning non-hydro renewables as essential to strengthening energy security and reducing exposure to drought-related fluctuations in dam output.
Broader energy-transition goals are also taking shape. Laos wants electric vehicles to represent 30 per cent of all two-wheelers and passenger cars by 2030, alongside universal household electricity access. Its first Nationally Determined Contribution to the Paris Agreement commits to non-hydropower renewables accounting for 30 per cent of total final energy consumption by 2025.
An electronic tuktuk in Vientiane, Laos. Image: Eco-Business
The urgency behind these targets was evident at the Lao PDR Carbon Markets and Clean Energy Conference held in Vientiane in September, where policymakers stressed the need to strengthen transmission systems and diversify power sources. Lao PDR, or Lao People’s Democratic Republic, is the official name of Laos.
While hydropower has long made Laos one of Southeast Asia’s cleanest power producers, prolonged droughts have exposed the vulnerability of relying so heavily on dams.
Opening the conference, Santisouk Phimphachanh, director general at the Ministry of Industry and Commerce, said clean energy was central to the country’s development path.
“Clean energy generation through solar and wind, combined with strengthened transmission and new technologies, will not only power our industries and households, but also attract investment, create jobs and enhance energy security,” she noted.
The 11 per cent target, she added, supports Laos’ goal of “building an inclusive and climate-resilient energy system”.
Strong ambition, structural constraints
Despite the recent momentum, analysts say the scale of transformation required is considerable.
According to a new report from the Asean Centre for Energy (ACE), Laos’ pledge to reach net zero emissions by 2050 will require a “fundamental restructuring” of the power sector, with solar and biomass playing a much larger role and coal gradually phased out.
It shows that achieving net zero would require a steep expansion in electricity-generation capacity – reaching nearly 30 gigawatts by 2030 under the most ambitious scenario – as well as rapid electrification of transport and industry. Hydropower would remain central, but large-scale energy storage and a modernised, more resilient grid will be crucial to absorbing higher shares of variable renewables.
The analysis also points to significant investment and technical challenges. Foreign capital will remain essential, yet gaps in grid infrastructure, limited domestic expertise and high upfront costs for electric vehicles could slow progress.
“Despite progress in renewable energy and cross-border electricity trade, gaps remain in understanding the sector’s role in achieving net-zero emissions,” the report noted. “An integrated approach is needed to align energy transitions with national and regional goals.”
To bridge these gaps, ACE recommends expanding regional grid interconnections, mobilising blended finance for large-scale renewable projects and strengthening local technical capacity to manage an increasingly complex energy mix.
As agriculture and industrial processes continue to account for a large portion of emissions, complementary measures – such as efficiency improvements, cleaner cooking fuels and carbon-removal technologies – will also be required to place Laos on a durable path to net zero, it added.
