Hongsa Power Company is developing the 1,878MW Hongsa Mine Mouth power project in Lao PDR. Credit: Banpu Public Company.
The first unit of the Mine Mouth power plant is expected to come online in June 2015. Credit: Hongsa Power.
HPC signed an agreement with Italian Thai Hongsa (ITH) for providing mining services at the Hongsa Mine Mouth project for a period of 15 years. Credit: Italian Thai Hongsa.

The 1,878MW Hongsa Mine Mouth power project is the first and biggest lignite-fired power plant to be developed in Lao PDR. The project is being developed in Hongsa and Muang Nguen Districts of Xayaboury Province, Lao.

Hongsa Power Company (HPC), a joint venture formed in 2009 between Banpu Power (BPP), Ratchaburi Electricity Generating Holding (RATCH) and Lao Holding State Enterprise (LHSE), is the project developer.

RATCH and BPP own 40% each in HPC, while LHSE holds the remaining share. The investment for the power plant is estimated to be $3.7bn.

Construction of the plant started in October 2010 and commercial operations are expected to begin in 2016. It will be Lao PDR’s highest-capacity power plant, providing a sustainable supply of energy for both Laos and Thailand.

Hongsa Mine Mouth power plant make-up

The Nam Theun 2 Hydropower Project (NT2) is a trans-basin diversion power plant on the Nam Theun river in Khammouane.

BPP, a wholly-owned subsidiary of Banpu Public Company (Banpu), entered a Heads of Agreement (project development agreement) with the Government of Lao PDR (GoL) for the Hongsa power project in December 2006.

The plant will be located on a 76.4km² concession area, which is leased for a period of 25 years. It will comprise a lignite-fired power plant, a lignite mine, a limestone mine and associated infrastructure facilities.

The plant will feature three 626MW generating units producing a gross output of 1,878MW and a net available-for-sale power output of 1,653MW.

The first unit of the power plant was grid-synchronised in February 2015 and is expected to begin commercial operations on 2 June 2015. The second and third units are anticipated to start commercial operation in November 2015 and March 2016 respectively.

The plant is estimated to use approximately 14.3 million tonnes (Mt) of lignite a year, which will be sourced from the nearby Hongsa Mine.

A fully-equipped central control room will be constructed to control and monitor the power plant operations.

Hongsa lignite mine

“The plant is estimated to use approximately 14.3 million tonnes of lignite a year.”

The lignite mine is an opencast mine with an estimated proven lignite reserves of approximately 370.8Mt. Based on an average annual lignite production of 14.3Mt, the reserves are expected to last for 26 years of operations.

The extracted lignite will be loaded onto trucks and transported to the power plant. To ensure continuous fuel supply to the power plant, lignite sufficient for two weeks of operations will be stockpiled at the stockyard, which is located to the northeast of the power plant.

Hongsa Mine Mouth power plant financing

“To ensure continuous fuel supply to the power plant, lignite sufficient for two weeks of operations will be stockpiled at the stockyard.”

Nine Thai commercial banks financed $3.71bn for the project, which achieved financial closure in August 2010. The banks included Bangkok Bank, Siam Commercial Bank, Krungthai Bank, Government Savings Bank, Kasikorn Bank, Export-Import Bank of Thailand, Bank of Ayudhya, Thanachart Bank and TMB Bank.

The financing was provided through long-term senior debts under the typical limited-recourse project financing scheme.

Electricity Generating Authority of Thailand (EGAT), BPP and GoL are the co-investors in the project.

Sale and transmission of power generated by Hongsa plant

On 30 November 2009, HPC signed a 25-year concession agreement to sell 1,473MW of the net available-for-sale power output to EGAT. It will further sell 100MW to Electricité du Laos (EDL) under a 25-year power purchase agreement (PPA), while the remaining will be lost in transmission.

A 67km-long, 500kV double-circuit overhead transmission line is being constructed to transmit the power generated by the plant to the Thai-Laos border.

A 115km-long, 115kV double-circuit overhead transmission line will be constructed to supply power from the plant to the Laos grid. It will connect the power plant to a substation near Hongsa town and further to the Luang Prabang Two substation.

Contractors involved with the Mine Mouth power project

A consortium of China National Electric Equipment Corporation, Harbin Power Engineering, Harbin Boiler, Harbin Turbine and Harbin Electric Machinery was awarded the engineering, procurement and construction (EPC) contract for the Hongsa power project.

The First Northeast Electric Power Engineering (NEPC) was awarded the construction sub-contract for the Hongsa power plant.

ABB was awarded the contract for the supply of core solutions and equipment for the automation control system to be used at the Hongsa power plant. The contractual scope includes the design, engineering, training and commissioning of the system.

Pöyry Energy prepared the functional specifications for the project.

NRI Energy Technology