State-run Electricity Generating Authority of Thailand (Egat) has signed two renewal power purchase agreements (PPAs) with Electric de Laos (EDL) to buy power from two hydroelectric plants: Nam Ngum 1 and Say-sed dams.
Two existing PPAs end in March and both state-owned agencies have calculated new purchasing rates to reflect the actual cost of power generation.
"Thailand will buy electricity from those two projects that have 300-400 megawatts," said Energy Minister Siri Jirapongphan.
Egat will purchase at a rate of 1.8 baht per kilowatt-hour (unit) during peak hours and 1.53 baht per unit during off-peak hours.
The average purchasing rate for Egat will stand at 1.63 baht per unit.
The existing PPAs had purchasing rates of 1.33 baht per unit.
EDL, the Laotian state enterprise, can sell the electricity to its own country if Laos has insufficient power.
Under the PPAs, EDL can buy from Egat at 1.9 baht per kilowatt-hour (unit) during peak hours and 1.63 baht per unit during off-peak hours.
The average purchasing rate for EDL will stand at 1.73 baht per unit.
The new rates are available until Dec 31.
"These rates are based on short-run marginal costs, also known as wholesale power tariffs, which are calculated by six-month retroactive costs," said Mr Siri.
"There is no effect on consumers' power bills as the new rates are calculated at fair prices."
For the Nam Ngum 1 and Say-sed hydroelectric plants, they transmit power output through a 115-kilovolt transmission line.
He said the two renewal PPAs changed some conditions for the first time in 50 years, since Thailand and Laos started their energy relationship.
Thailand and Laos are expected to sign PPAs for the power totalling 9,000MW by 2030.
Mr Siri said the new version of the national power development plan 2018-37 calls for buying roughly 3,000-3,500MW of power from Laos.
Thailand has signed total PPAs to buy 6,000MW of power from Laos.
"The government plans to buy electricity from Laos during 2025-26 of 1,400MW and 2030-35 of 2,000MW," he said.
Moreover, the Laotian government is studying the feasibility of a new hydroelectric power plant, the Mekong-Luang Prabang project, with a generating capacity of 1,400MW.
Mr Siri said the government plans to buy electricity output from the new project in the future.
Thailand and Laos began their relationship for power development on the banks of Mekong River. Both governments will continue to strengthen their power security to develop Southeast Asia's power grid and create a progressive and sustainable economy for the region.