Laos’ Hydropower Dominance Faces New Competition as Southeast Asia Expands Renewable Power Trade

Laos has long been regarded as the “Battery of Southeast Asia”, with hydropower exports playing a major role in meeting electricity demand across the region. Today, however, the country’s position is being reshaped by rapid growth in solar and wind power, alongside expanding cross-border grid infrastructure.

Following significant foreign investment in its power sector since the 1990s, Laos developed surplus electricity-generation capacity and increasingly turned to exports. Around 80% of the country’s energy is sold to neighbouring markets, generating approximately US$2.6 billion in electricity-export revenue. Thailand, Cambodia, Vietnam, Singapore and Malaysia have all become connected to Lao hydropower through regional power-trading arrangements.

Thailand Expands Solar Alongside Lao Hydropower Imports

Thailand remains the largest importer of Lao electricity and a major investor in Lao hydropower projects. Long-term PPAs have historically supported investment in new dams.

However, Thailand is increasingly turning to solar as it seeks greater energy-security and price stability amid exposure to imported LNG prices. In September 2026, the country announced plans to install 5 GW of rooftop solar within one year, while its draft Power Development Plan 2026 envisages solar accounting for nearly half of new renewable capacity between 2026 and 2037.

Vietnam Emerges as a Major Growth Market

Vietnam’s rapidly increasing electricity demand, particularly from its manufacturing sector, is creating additional demand for regional power imports.

Vietnam imported around 1.5 GW of electricity from Laos in 2025, while its revised Power Development Plan targets increasing imports from Laos to at least 8 GW by 2030, up from the previous 5 GW target.

At the same time, cross-border renewable projects are diversifying the sources of imported electricity. The 600 MW Monsoon wind project in Laos began supplying Vietnam in 2025 through a 500-kV transmission line, while a proposed 1 GW onshore wind project in Savannakhet could provide additional electricity to Vietnam’s manufacturing hubs.

Vietnam is also raising its own ambitions for non-hydro renewables, increasing its target for solar, wind and biomass generation capacity by 2030 from approximately 43 GW to at least 75 GW.

ASEAN Grid Integration Could Redefine Regional Power Flows

The transformation extends beyond individual countries. ASEAN is gradually developing a regional power grid capable of facilitating electricity trading across national borders.

In May 2026, the ASEAN Centre for Energy, Electricité du Cambodge and Electricité du Laos signed a joint study framework to advance cross-border power interconnections. Laos and Cambodia had already taken a major step toward greater connectivity with a 500-kV transmission line launched in 2023.

The Laos-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) has further demonstrated the potential of multilateral electricity trading. Its tradable capacity increased from 100 MW to 200 MW in January 2026, enabling additional electricity flows between Malaysia and Singapore.

As more transmission links are developed and solar and wind capacity expands, Southeast Asia’s future power system is likely to become increasingly interconnected and diversified.

For Laos, this means its role as the region’s “Battery” is unlikely to disappear—but it is likely to evolve from a predominantly hydropower-based export model into a broader role within an increasingly interconnected ASEAN renewable-energy market.