Singapore-Laos clean energy deal stalls over transmission issues

The extension of Singapore’s multilateral deal to import hydropower from Laos has hit a roadblock due to disagreements over energy transmission through Malaysia and Thailand, according to two regional government sources.

The Lao PDR-Thailand-Malaysia-Singapore (LTMS) Project, aimed at supplying up to 100 megawatts (MW) of electricity from Laos via Thailand and Malaysia, was initially hailed as “historic” by Singapore when signed in 2022.

The deal, seen as a key solution to reduce fossil fuel reliance, was valid for two years and ended on June 22, 2024. While Singapore’s Keppel Ltd. and Electricite du Laos (EDL) signed a renewal agreement on June 24, Singapore has yet to finalise agreements with Thailand and Malaysia due to disputes over the power quantity to be purchased.

The countries have until December 31 to sign transmission agreements. However, the sources, who requested anonymity, indicated a final agreement is unlikely. “LTMS might be dead for the moment. There’s truly no extension,” said one source involved in the discussions.

In December, Thailand’s prime minister stated that the country would not allow electricity to pass through to Singapore, preferring to purchase the power itself.

Thai officials at a Vientiane meeting also awaited policy directions from their government to proceed with LTMS, but approval seemed unlikely. “Nobody wants to defy the words of the PM,” the source added.

The Energy Market Authority of Singapore and the state-run utilities of Thailand, Malaysia, and Laos did not respond to Reuters’ requests for comment. A Keppel spokesperson declined to comment on “market talk.”