Malaysia inks deal to buy hydro-power from Laos

MANILA, 28 Sept 2017: 

Malaysia has sealed an Energy Purchase and Wheeling Agreement (EPWA) with Laos and Thailand for what is Asean’s first multilateral cross border trading project.

Energy, Green Technology and Water Minister Datuk Seri Panglima Dr Maximus Johnity Ongkili said the agreement will see Malaysia purchasing up to 100MW of hydro-power from Laos – through the existing transmission network of Thailand – from 1 Jan 2018, under the first phase of the Laos-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP).

“This is a milestone for Asean in energy trading. It is not something new, having been in discussion for more than a decade under the Asean Power Grid Initiative, which aims to further economic cooperation among member countries, and also enhance energy security in the region.

“Although the power trading also involves Singapore, the country has requested to be temporarily excluded.

“We hope Singapore can join phase two of the LTMS-PIP, especially after the new transmission line with Johor is completed,” he said after the EPWA signing ceremony yesterday.

Ongkili said the purchase would benefit Malaysia, with pricing being very competitive and below the average tariff rate of 38.53 sen, as well as compared to conventional sources.

He said the additional 100MW purchased could also serve as backup energy when needed, while enabling Malaysia to increase the share of sustainable energy, which currently stood at 22.5% compared to 78% from gas and fuel.

The EPWA agreement is for two years and to be reviewed after 2020.

Malaysia is looking forward to expanding the project beyond 2020 and further increasing the power purchase from Laos as a means of balancing the country’s energy mix, in addition to awaiting the right time to export using a similar arrangement, Ongkili said.

He added that a working group would be set up to look at implementation of phase two of the LTMS-PIP, in consideration of the need for guidance towards enhancing the effectiveness of multilateral power trading in Asean.

The EPWA agreement was signed by utility company representatives of the three countries, namely Tenaga Nasional Bhd (TNB) for Malaysia, Electricite du Laos (EDL) and the Electricity Generating Authority of Thailand (EGAT).

– Bernama

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