Expected Benefits of Laos’ Hydropower Development Curbed by Hydroclimatic Variability and Limited Transmission Capacity: Opportunities to Reform

Massive investments in hydropower are transforming several river basins across the world—especially in developing countries, where hydroelectricity is often seen as a means to sustain economic growth. While the environmental alterations caused by these projects have been well addressed in the scientific literature, less is known about their actual performance, which could be affected by water availability or the uncoordinated planning of the power generation and transmission facilities. To fill in this gap, we developed a novel water-energy modeling framework that relies on a macroscale semidistributed hydrologic model and a unit commitment model that schedules and dispatches electricity from hydropower reservoirs and other energy sources. The framework is applied to Laos, which has recently attracted large investments in the hydropower sector, making it the so-called Battery of Asia. Simulation results over a 10-year period show that the energy system heavily relies on thermal power during the pre-monsoon months; a condition that is exacerbated by the dry spells caused by El Niño events. During the driest years, the annual generation costs and carbon dioxide emissions could increase by more than 20%. On the other hand, monsoon rainfalls largely increase the available hydropower, whose dispatch is severely limited by the capacity of the high-voltage transmission facilities. In the latter part of the analysis, we discuss the opportunities to improve system performance, and show how the capacity expansion of just a few transmission lines could ease the redistribution of hydroelectricity during peak-production periods.