Modeling Decarbonization Pathways in the Power Sector in Developing Countries: The case of Laos

This analysis reveals a critical choice for Laos's energy future, demonstrating that a strategic pivot away from the status quo is both economically and environmentally imperative. Key Findings: The current Business as Usual (BAU) path is unsustainable, proving to be the most expensive scenario at $91.80 billion due to long-term fuel dependency and leading to a failure to meet national climate commitments. In contrast, a renewables-led (RE) decarbonization pathway is 29% cheaper, driven by a massive build-out of wind and solar power and the electrification of the economy. Critically, the Climate Resilience (CR) scenario shows that building a system resilient to drought requires an even greater investment in renewables, proving that diversification is the key to both climate mitigation and adaptation. Recommendations: · To achieve a secure and prosperous low-carbon future, Laos should: · Halt new investment in fossil fuels and formalize a coal phase-out strategy. · Establish ambitious national targets for wind and solar to attract the massive scale of investment required. · Launch a national program for electrification, focusing on transport and industry. Prioritize investments in grid modernization to support and manage a high share of variable renewables.