The China-Laos cross-border power transmission line commenced operations on 20 April. Simultaneously, China opened its domestic electricity market to Lao renewable energy generators, marking the first time overseas generators have traded directly in China’s power market, reported Sina Finance.
The 500-kV, 177.5-km interconnection project links China’s Yunnan province with Oudomxay and Luang Namtha provinces in Laos. It is the largest and highest-voltage cross-border grid connection between the two countries to date, China Daily noted.
The project’s launch was accompanied by the introduction of cross-border power trading. Solar news outlet OFweek cited data from Foresight Energy showing that 4.81 million kWh of electricity from a solar energy project in northern Laos was transmitted to Yunnan via the line that day.
Such power trading bypasses the intergovernmental agreements that previously governed all cross-border electricity flows.
Before this development, Lao renewable energy producers would sell electricity to state-owned Electricité du Laos (EDL), to be exported after the two countries negotiated a price, noted OFweek. But Lao generators can now directly participate in China’s Southern Regional Power Market, which covers five provinces. This promotes renewable energy consumption through market-based mechanisms, Huang Wei, general manager of the Kunming Power Exchange Center, told China Energy News.
Yunnan, in turn, will supply electricity to Laos during the dry season – when the country generates less hydropower, its key energy source – via market transactions to support local demand, the outlet reported.
The development also reflects significant Chinese involvement. The project is operated by Electricité du Laos Transmission Company (EDL-T), a joint venture between China Southern Power Grid and EDL. In 2021, EDL-T secured a 25-year concession to manage Laos’ transmission assets, reported The Asset. This gives China more influence over the country’s grid infrastructure and cross-border interconnection.
Read Dialogue Earth’s previous analysis of China’s ultra-high-voltage grid system.