Power sector “struggling” for power supply in last 6 months of 2018

The current enormous surge in electric power demand, with the rate of over 10%, will cause many difficulties against the power supply as from 2019-2020 onwards.

                              The Chairman affirmed that in 2018 EVN would ensure stable power supply for production and assumption by its existing power source projects and grid.

In the recent period, the additionally-invested power source has not met the demand growth rate of 10%/year which requires a further increase of 4,000-5,000MW in power source. But recently, just 3,000MW has been supplemented.

With the growth rate of over 10% in power demand, the power supply as from 2019 on will face many difficulties. The Group has balanced its sources and reported it Ministry of Industry and Trade, the Minister has attended at meetings and some solutions have been offered by the Group for ensuring power supply in the coming period.

First, in 2019-2020, it is difficult for the Group to replace the oil-fired power source to assure its finance with the oil-fired power demand of 3-4 billion kWh/year. This is a pressure on EVN’s finance, but there is no more feasible source to meet the country’s power demand.

From 2020 on, the Group has been focusing on negotiating and purchasing power from the countries in the region, particularly Laos, arranging investors to invest in solar power plants so as to increase the current capacity of 2,000MW into 2-3 billion kWh in order to ease the burden in 2019-2020  period.

To ensure power supply sources in the coming years, EVN’s representatives proposed that the Group currently has been facing many problems related to negotiation procedures to purchase the power from The Laotian investors, the price range has not been issued. Thus, EVN needs this range to be issued by Ministry of Industry and Trade in order to form a basis for the Group to negotiate with The Laotian investors.

Regarding the purchase of power from China, the Group shared that it is necessary to increase the purchase quantity up to 3-4 billion kWh instead of the current quantity of 1.2-1.5 billion kWh with the solutions of installing equipment for transmission, altering and connecting the grid for more stability, etc.

The investment projects of solar power with high capacity also put pressure on  transmissions. So EVN recommend the Ministry to provide solutions to encouraging investors to properly allocate solar power sources, etc.

According to Mr. Tran Tuan Anh - Minister of Industry and Trade, regarding the price list of purchasing power from The Laotian investors and the necessary conditions, the Ministry has held meetings to draw out conclusions and perform specific solutions soon; the Ministry also directs its units to focus on ensuring the schedule and further accelerate it.

Additionally, new policies such as clean energy and solar power development ones depend much on technology, policy synchronization and especially ensuring infrastructure development. The power load in the region will definitely develop unevenly and cannot be exploited without review and adjustments related to developing infrastructure, including the private sector’s role, and necessary infrastructure for connecting and increasing absorption capacity, etc., not mentioning on the unachieved effectiveness of the policies.

Thus, we will consider in details and the Ministry will direct the competent authorities to perform the assignments soon and then submit reports to the Government.

Regarding the relevant legal framework and institutions on energy infrastructure development such as the general diagram of electric power, the Minister requires EVN and Electricity Regulatory Authority of Vietnam (under MOIT) to consider and make detailed reports, not only the Law on Public investment and the Law on Construction but also decrees and documents on guiding ministries and departments, reviewing and applying more comprehensive approaches.

The Minister said that the Power sector still has many issues to be implemented such as competitive electricity market, completing power generation market; restructuring the Sector, arranging businesses; improving efficiency in energy using and saving; diversifying the supply sources, ensuring the safety of the power system. The crucial and permanent target is to ensure the power supply-demand balance for serving the socio-economic development of the country, etc.

Deputy Minister of Industry and Trade Do Thang Hai added that by the end of 2018, input costs of the Power sector was about to increase by more than VND 4,097 billion (because the input oil and gas price would be charged based on market prices). However, the Government has directed, from now until the end of 2018, not to increases electricity prices, so the Sector needs to proactively regulate its activities to ensure the power supply and meet the targets set by the Government and the National Assembly.

The report of the Ministry indicates that in the first six months of 2018, the Sector remained a positive growth rate of 10.4%, higher than that of the same period last year (9%). The Sector ensures the adequate power supply for production and business operations, properly serving socio-political activities and the people's daily life as well as the water supply to downstream areas for the agricultural production.

Generally, in the first 6 months of 2018, the commercial power output was 91.48 billion kWh in estimation, increasing by 10.3% over the same period. The Sector has completed and put into operation Song Bung 2 Hydropower Plant with the total capacity of 100MW; completed the testing, reliable operation and commercial power generation in power plant projects of Thai Binh, Vinh Tan 4, contributing to the growth of the Sector, etc.