Lao PDR has a total installed power generation capacity of 673 MW, of which hydropower plants account for 99.8% and diesel generators and solar photovoltaic systems produce the remainder. In 2006, hydro-power plants in the Lao PDR produced 3,595 GW-h of power. Each year the Lao PDR both exports and imports a great deal of power to and from the neighbouring countries. For example, in 2006 exports totalled 2,487 GW-h while imports were 0.631 GW-h. The amount of power imported is expected to grow as a result of the rapidly increasing demand and the constraints on power generation. According to the Electricity Statistics Yearbook 2006 of the Department of Electricity, the predominant use of power remains that of household consumption accounting for more than 50% of the total use. Electricity is used primarily for lighting and household appliances like refrigerators, and television and radio sets. Very few households use electricity for cooking (see Map H.7).

The Lao PDR is a mountainous country with some sparsely populated remote regions to which it is very difficult to supply electricity. At present, only 58% of all households have access to electricity. 50% of these households depend on the national grid which is mostly connected to existing hydropower plants. The remaining 8% of households not connected to the national grid depend on isolated mini-hydropower plants and solar photovoltaic systems, as well as generators and car batteries.

In summary we observe that about 40% of households do not have access to electricity of any kind. As map H.6 reveals these households are mostly in the remote areas of the north or along the border with Vietnam. The government is striving to provide electricity to these households and aims to raise the electrification rate to 90% by 2020.  The current spatial distribution pattern shows that this remains a big challenge. The supply of electricity through the national grid is technically and economically more feasible in the areas along the Mekong River, the flat areas, where the standards of living, modernisation and population density are higher. The highest electrification rate of 96% in the country is in Vientiane Capital, while the lowest of 9% is in the province of Phongsaly. As the country lacks a national transmission line linking all the provinces, many towns receive their electricity from neighbouring countries such as Thailand, Vietnam and China. The Lao grid has better connections to the Thai grid evidenced by the fact that there seven connection points to the Thai grid alone. Furthermore during the dry season when power shortages are more likely to occur, the Lao PDR resorts to more frequent electricity imports from Thailand.