Watcharejyothin, Mayurachat and Ram M. Shrestha

Abstract
This paper analyzed the effects of hydropower development in Laos and power trade between Laos and Thailand on economy wide, energy resource mix, power generation capacity mix, energy system cost, environment, as well as, energy security. A MARKAL-based model for an integrated energy system of Laos and Thailand was developed to assess the effects of energy resource development and trade to meet the national energy demands of the two countries. Two national MARKAL-based energy system models of Laos and Thailand were formulated for the study. The results show that 80% exploitation of water resource in Laos would induce power trade between the countries. The integrated energy system cost is found to decrease marginally but it would mitigate the CO₂ emission by 2% when compared with the base case. Thailand is expected to gain benefit from the increased level of power imported from Laos in terms of the lower energy system cost, better environmental quality and, greater diversification of energy sources. As compared to the base case, Laos would become the net energy exporter, earn significant export revenue, and improve the increase in revenue of energy export per increase in total energy system cost from the maximum exploitation of hydropower resource.