Nothing is more emblematic of a well-functioning electric grid than strings of luminous street-lamps stretching along a city’s main thoroughfares. Arriving from Nepal, whose shoddy infrastructure faces power cuts lasting up to 18 hours per day, the bright streets of Vientiane struck a contrast as clear as day and night.

For social entrepreneurs looking to work with local communities to build and operate community-scale renewable energy systems, the grid is competition. If people have access to grid power, their need for, or interest in managing their own renewable energy supply will be limited. This explains why, according to one individual involved in renewable energy projects in Laos, “Nepal is 20 years ahead of Laos in terms of policies and private companies working in the renewable energy space.”

The debate over a power system based on large, centralized plants and a sprawling grid, versus distributed, community-scale energy generation projects, is complex and often quite heated. This seemingly technical question actually has vast social, cultural, environmental, and economic dimensions, which are well demonstrated by the energy situation in Laos.

Economic growth in China and throughout Asia has raised interest in the energy rushing down the mighty Mekong, one of the world’s largest rivers, which descends from the Tibetan Plateau through Yunan Province in China southward through Burma, Laos, Thailand, Cambodia and Vietnam, finally flowing out into the South China Sea. This river brings life and livelihood to much of Southeast Asia, including the people of Laos.

Outside the well-lit capitol city of Vientiane, there are many remote areas beyond the reach of Laos’ grid. Currently 40% of Laotians do not have access to electricity. However, investment from China, as well as other wealthy neighbors is flowing into several large hydroelectric projects in Laos. With these new dams along the Mekong, Laos’ government projects that 90% of the population will have access to grid electricity by 2020, though most of the individuals we spoke with seriously doubt this claim.

Some of the hydroelectricity will go to power Laos, while more will be exported to Laos’ power-hungry neighbors.

Lao PDR (People’s Democratic Republic) officials in Vientiane and Chinese and Thai investors are set to benefit from these large-scale power projects. Meanwhile, Laos’ rural poor will suffer severe social and environmental impacts. Massive forced “relocation” schemes for Mekong villages are already in motion. Warnings from international groups about the impacts on agriculture, fishing, and cultural preservation are being ignored.

The decisions Laos makes today about its energy supply will have long-lasting impacts for the greater Mekong region. At this pivotal moment in Asian energy history, Anya and I had the opportunity to meet with several organizations working on energy issues in Laos.

RISE (Rural Income through Sustainable Enterprise), an initiative of Helvatas, a Swiss international NGO, has worked to rehabilitate a small (12 kilowatt )hydroelectric power plant that was built by USAID years ago. The plant was abandoned once it broke down because USAID did not provide locals with the expertise to repair it. The lesson, rarely learned by international development workers, is that giving technology to people who don’t have the capacity to maintain it is neither empowering, nor a solution.

Unlike large hydroelectric dams, small hydroelectric projects tend to have a small environmental impact. This particular small hydropower plant was supposed to serve an off-grid community. However, during the rehabilitation period the grid found its way to the village, offering relatively inexpensive electricity. So instead of working with the village to run and operate its own power system, RISE ended up in protracted negotiations with the national utility to sell the power back to the grid.

Despite the fact that most renewable energy projects we heard about were racing the grid, some areas of Laos are so remote that the government admits the grid may never reach them. The government’s solution is to relocate people, but many people we met with were passionate that off-grid renewable energy solutions would make forced relocation unnecessary.

In some cases centralized energy supply can strengthen authoritarianism, while community energy can empower local communities.

A private renewable energy company we met with, called Sunlabob works on identifying and training “local entrepreneurs” to operate community-scale renewable energy systems in remote villages. One interesting model they implement in Laos involves setting up a local entrepreneur with a photovoltaic system that charges solar-LED lanterns. The entrepreneur rents the lanterns to villagers on a nightly basis. Villagers can then choose between burning kerosene, which poses health and safety risks, or renting a cost-competitive (depending on the price of kerosene) solar-electric lantern. According to Sunlabob, this model has been quite successful.

Anya and I like this model because it involves working with one entrepreneur, rather than a fragmented set of households (the “end-users”) and creates a sustainable enterprise for the village. Unlike the USAID small hydro project mentioned above, Sunlabob’s solar-lantern project includes training on repairing and maintaining the power system.

We had the chance to meet with two other groups working on energy issues. The Lao Institute for Renewable Energy (LIRE), is doing some interesting research on Jatropha biofuels, solar water purification, wastewater treatment, and pico (even smaller than micro) hydro projects, but with no support from the government. SNV is promoting rural household biogas  (see prior post for more on this technology), but these projects usually support household cooking and agriculture, as opposed to electric power.

Despite some encouraging examples, Anya and I are leaning away from Laos as a country to launch an enterprise. From a market-size standpoint, Laos is small. With a population of only 7 million, of which the government claims 90% will be grid-connected to cheap, subsidized hydropower by 2020, the outlook for scalable community renewable energy development is poor.

Though the remaining 10% of the population is so remote that off-grid projects would not be threatened, the cultural and political situation in Laos is not encouraging. We heard from many organizations how difficult it is to set up and run operations in Laos. The government seems to have set up a stretching track of hurdles for foreign and local social ventures to surmount.

Again in contrast to Nepal (and Cambodia, where we are now), the people themselves seemed to lack interest in our Western concept of change or entrepreneurship. Many of the NGO’s we met with were worn down and jaded by the challenges they face in Laos. Anya and I want to help motivated people succeed, not pull teeth and force people to adopt a culture they are not interested in.

As one energy-developer in Cambodia put it, “Lao people joke that first they relax, then they sleep”. So from a mission standpoint, Laos is not at the top of our list. However, from a traveler’s standpoint Laos is fantastic, and I really enjoyed it there. The laid back lifestyle is hypnotic, and the gorgeous temples, towering limestone formations, and lush green countryside calm the soul. The food is delicious, particularly the rice noodle soup, which is filled with fresh basil, cilantro and other tasty herbs.

And, perhaps most importantly, Beer Lao is the most drinkable Asian beer I’ve had so far.