GULF Signs Power Purchase Agreement for Pak Beng Power Plant Project in Laos
Gulf Energy Development, in partnership with China Datang Overseas Investment, has signed a power purchase agreement (PPA) for the development of the Pak Beng hydroelectric power plant project in Laos. The project, with an installed capacity of 912 megawatts, is expected to commence commercial operations in 2023.
- The PPA, which has a duration of 29 years, was signed with the Electricity Generating Authority of Thailand (EGAT).
- The average electricity rate for the project is set at 2.7129 baht per kilowatt-hour.
- The total investment for the Pak Beng project is estimated to be around 100 billion baht. The funding for the project is currently being acquired through financial institutions and is expected to close by the end of 2024.
- Construction is projected to take approximately eight years, with commercial operations scheduled to begin in 2033.
The Pak Beng project, located on the Mekong River in Oudomxay Province, Lao PDR, has received approval from the government and the National Council of the Lao PDR. It aligns with the memorandum of understanding (MOU) between Thailand and Lao PDR, aimed at promoting clean energy and reducing carbon emissions. Under this MOU, Thailand will purchase electricity from power plant projects in Lao PDR and connect them through an international electricity transmission system.
By purchasing electricity from the Pak Beng project, Thailand aims to diversify its power sources, reduce fuel price fluctuations, and decrease the burden on households and industries. The project’s electricity generation cost is lower than the current average electricity price, allowing consumers to benefit from affordable electricity throughout the contract period. Additionally, the project will stimulate economic development and employment by utilizing materials, products, and services from Thailand.
The Pak Beng project, classified as a run-of-the-river hydroelectric power plant, does not involve water storage or diversion from the Mekong River. It has undergone rigorous environmental and social impact assessments, ensuring compliance with international standards and addressing concerns from stakeholders and the Mekong River Commission.
HoonSmart.com >> “Gulf Energy Development” (GULF) informs that the Chinese joint venture power plant “Pak Beng” in Laos, with an installed capacity of 912 megawatts, has signed a power purchase agreement for the government EGAT contract for 29 years , COD expected in 2023, average electricity rate at 2.7129 baht per kilowatt-hour.
Ms. Yupapin Wangwiwat, Deputy Executive Officer and Chief Financial Officer of Gulf Energy Development Company (GULF), revealed that the Company and China Datang Overseas Investment Co., Ltd. (CDTO) are related to China Datang Corporation Ltd., and an enterprise company and a leading state-owned energy in China with power generation projects with a total installed capacity of more than 170,000 megawatts covering 13 countries worldwide. has signed a memorandum of understanding for the purchase of electricity (Tariff MOU) with the Electricity Generating Authority of Thailand (EGAT) to develop the Pak Beng hydroelectric power plant project, with an installed capacity of 912 megawatts, located on the Mekong River, Pak Beng City, Oudomxay Province, Lao PDR, which will generate and sell all electricity generated to EGAT.
On 13 September 2023, Pak Beng Power Company Limited, a joint venture between the Company and CDTO in the share of 49% and 51%, respectively, committed to execute the Pak Beng project, in the Power Purchase Agreement with EGAT. ready. The contract has a period of 29 years from the date of electricity supply to the system. and has an average electricity rate of 2.7129 baht per kilowatt-hour
For the Pak Beng project, the total value of the investment is about 100,000 million baht, which is currently in the process of acquiring loans with financial institutions. Funding is expected to close by the end of 2024 and construction will take approximately eight years, with commercial operations scheduled for 2033.
The Pak Beng project is a project approved by the government and the National Council of the Lao PDR, which signed a Concession Agreement with the Lao PDR government on 11 August 2023. It is considered one of the power plant projects of under the memorandum of understanding between Thailand and Lao PDR Regarding cooperation in the development of electricity in the Lao PDR (MOU) to support the reduction of carbon emissions. (Decarbonisation) and increase the use of clean energy during the energy transition period (Energy Transition) Under the Memorandum of Understanding, Thailand will purchase electricity from power plant projects developed in Lao PDR and connect it through r international electricity transmission system. Currently, there is a framework for cooperation in the purchase of electricity of 10,500 megawatts, with 11 projects that have already supplied electricity to the system of 5,935 megawatts, 3 projects that have signed power purchase agreements of 3,060 megawatts, and projects that have signed memoranda of understanding of the purchase of electricity (Tariff MOU), 815 megawatts, 2 projects
Cooperation under the MOU is also in line with the Thai government’s policy which focuses on increasing the proportion of power plants from clean energy sources that will enter the system. To replace decommissioning power plants, totaling more than tens of thousands of megawatts, from 2023 onwards, and also to meet future electricity demand from the increase in electric vehicles (EVs).
Buying electricity from the Pak Beng project will help reduce fuel price fluctuations. And it helps to ease the burden of people in the household sector and the industrial sector by being able to use electricity at a low price throughout the contract period. This is because the Pak Beng project has an electricity generation cost that is lower than the current average electricity price of 4-5 baht per kilowatt-hour. Furthermore, under the terms of the power purchase agreement, the Pak Beng project must use of raw materials and products in construction, power plant Including Employment personnel and services from Thailand This will help stimulate economic development and employment in the country. Therefore, it is considered important for economic development. It also follows the plan to buy electricity from neighboring countries as set out in the national electricity purchase plan.
The Pak Beng project is a hydroelectric power plant with year-round water flow. (Run-of-the-River) There is no water storage in the form of reservoir-like dams (Reservoir) and there is no diversion of water from the Mekong River. Therefore, it does not affect the amount of water in the Mekong River The Pak Beng project has been approved by the environmental and social impact study, including sediment drainage, fish passage, and community relocation in the Pak Beng project area in the country ■ Lao PR and transboundary impacts (Environmental and Social Impact Assessment: ESIA) by the Lao PDR government. In addition, the Pak Beng project has measures to prevent and mitigate impacts covering key issues that have been considered by the Mekong River Commission (MRC) to ensure the implementation of the Pak Beng project will be in line with international standards and socially accountable , the environment, and stakeholders in all relevant sectors
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