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On Energy Sector in Lao People's Democratic Republic Lao People’s Democratic Republic Ministry of Energy and Mines Data Collection Study (Preliminary Assessment) on Energy Sector in Lao People’s Democratic Republic Final Report August 2012 JAPAN INTERNATIONAL COOPERATION AGENCY THE INSTITUTE OF ENERGY ECONOMICS, JAPAN ELECTRIC POWER DEVELOPMENT CO., LTD. MITSUBISHI RESEARCH INSTITUTE, INC. LAO JR 12-002 Table of Contents 1 CURRENT SITUATION OF ENERGY AND ECONOMY ...................................................... 1 1.1 ECONOMIC SITUATION ........................................................................................................... 1 1.1.1 Aiming for a transition to a market economy and ASEAN regional integration ................. 1 1.1.2 The Seventh Five-Year National Socio-Economic Development Plan (2011-2015) ............ 4 1.1.3 Economic situations of Greater Mekong Sub-region (GMS) countries .............................. 6 1.2 CURRENT SITUATIONS OF ENERGY DEMAND AND SUPP LY ........................................................ 11 1.2.1 Energy outlook of Lao PDR ........................................................................................ 11 1.2.2 Energy outlook of Greater Mekong Sub-region (GMS) countries ................................... 13 2 CURRENT SITUATION AND ISSUES CONCERNING ENERGY POLICY AND SYSTEM.. 18 2.1 OUTLINE OF ENERGY POLICY AND SYSTEM ........................................................................... 18 2.1.1 Political regime .......................................................................................................... 18 2.2 IMPLEMENTATION STRUCTURE OF ENERGY-RELATED ADMINISTRATION ................................... 19 2.2.1 Administrative organizations related to energy ............................................................. 19 2.3 ISSUES CONCERNING ENERGY POLICY AND SYSTEM ............................................................... 25 2.3.1 Current Situation Concerning Energy Policy and System .............................................. 25 2.3.2 Issues Concerning Energy Policy and System ............................................................... 27 3 PRESENT SITUATION OF ENERGY SUB-SECTORS ........................................................ 30 3.1 ELECTRIC POWER SECTOR ................................................................................................... 30 3.1.1 Outline of Electric Power Sector ................................................................................. 30 3.1.2 Electricity Supply and Demand ................................................................................... 35 3.1.3 Power Development Plan ............................................................................................ 41 3.1.4 Issues Related to “Power Development Plan” .............................................................. 55 3.2 FOSSIL FUEL SECTOR .......................................................................................................... 60 3.2.1 Coal Sector ................................................................................................................ 60 3.2.2 Petroleum Products Sector .......................................................................................... 69 3.3 RENEWABLE ENERGY SECTOR .............................................................................................. 75 3.3.1 Present situation of renewable energy use .................................................................... 75 3.3.2 Government organizations .......................................................................................... 77 3.3.3 Renewable Energy Development Strategy and its underlying issues ............................... 78 3.3.4 Business potential and private companies in Lao PDR involved in renewable energy...... 94 3.3.5 Trends of renewable energy advanced technologies in Japan ......................................... 97 3.3.6 Preliminary study on model projects .......................................................................... 107 3.3.7 Considerations for further study, and technical and financial assistance .......................111 4 ENERGY STATISTICS AND DATABASE .......................................................................... 114 4.1 CURRENT SITUATION OF ENERGY STATISTICS IN LAO PDR ................................................... 114 4.1.1 Coal ........................................................................................................................ 114 4.1.2 Oil ........................................................................................................................... 114 4.1.3 Electricity ................................................................................................................ 114 4.1.4 Renewable Energy .................................................................................................... 114 4.1.5 Energy Balance Tables .............................................................................................. 115 4.2 ISSUES RELATED TO ENERGY STATISTICS ............................................................................ 115 4.2.1 Inaccuracy of Energy Statistics.................................................................................. 115 4.2.2 Completeness of Energy Statistics .............................................................................. 117 4.2.3 Processing of Energy Statistics .................................................................................. 117 4.2.4 Storage and Use of Energy Statistics .......................................................................... 118 4.3 DATA COLLECTION SYSTEM ............................................................................................... 118 4.3.1 Data Collection System in Japan ............................................................................... 118 4.3.2 Estimation of Energy Demand ................................................................................... 121 4.3.3 Proposed Data Collection System in Lao PDR ........................................................... 121 4.3.4 Collaboration among Ministries and Relevant Organizations ...................................... 126 4.4 DATABASE SYSTEM ........................................................................................................... 126 4.4.1 Overview ................................................................................................................. 126 4.4.2 Functions of Energy Database .................................................................................. 127 4.4.3 Proposed Database .................................................................................................. 130 4.4.4 Database Development Process ................................................................................. 132 4.4.5 Need for Capacity Building ....................................................................................... 134 4.5 ENERGY DEMAND SURVEY ................................................................................................ 134 4.5.1 Objective of Survey ................................................................................................... 134 4.5.2 Target Industries ...................................................................................................... 134 4.5.3 Results of Survey ...................................................................................................... 135 4.5.4 Possibility of Energy Conservation ............................................................................ 137 4.6 IMPLEMENTATION SCHEDULE ............................................................................................. 138 5 ENERGY DEMAND AND SUPPLY FORECASTING ......................................................... 139 5.1 FUNCTIONS AND OBJECTIVES OF IEEJ MODEL ..................................................................... 139 5.2 OUTLOOK OF IEEJ MODEL ................................................................................................. 140 5.2.1 Structure of model .................................................................................................... 140 5.2.2 Energy balance tables ............................................................................................... 143 5.3 SETTING STANDARD SCENARIO AND EVALUATING RESULTS ESTIMATED BY THE MODEL ......... 144 5.3.1 Assumptions (BAU) .................................................................................................. 144 5.3.2 Projection for energy retail prices ............................................................................. 147 5.3.3 Simulation results of energy demand in BAU scenario ................................................ 148 5.3.4 Sensitivity analysis ................................................................................................... 151 5.4 SETTING EACH SCENARIO AND STUDYING ENERGY DEMAND AND SUPPLY BALANCES ............... 153 5.4.1 Comparison of each case for energy demand and supply balances ............................... 153 5.4.2 Comparison of energy demand and supply balances for 2025 ...................................... 156 5.5 CONCLUSION AND FUTURE AGENDA .................................................................................... 161 5.5.1 Projection of demand and supply balance for 2025 ..................................................... 161 5.5.2 Issue of energy supply strategy .................................................................................
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