Power and Coal Industries: Harmonious Interests

The Vietnam National Coal - Mineral Industries Group (Vinacomin) estimated that the domestic demand for coal is at most 40 - 50 million tonnes in 2010 and 70 million tonnes in 2020. According to coal specialists, Vietnam is now capable of producing 35 - 40 million tonnes of coal a year. To meet the national demand, Vietnam will have to be able to exploit 70 - 80 million tonnes of coal or more in 2020. Therefore, the currently imperative requirements are to boost production capacity by adopting new production technologies as soon as possible.

 

According to a representative from Vinacomin, the coal producer always put the top priority on supplying enough coal for electric generation. Although Vinacomin sometimes encountered difficulties in production and reserve, it always ensured sufficient supply for EVN-run power plants like Pha Lai, Ninh Binh and Uong Bi 1.

 

However, the sufficiency or shortage of coal for electric production depends on many factors. Although coal reserves are measured to be large, the coal industry will be faded away if the selling price to power plants is still lower than the production cost. As a result, it will eventually fail to meet the huge demand by the power industry. Thus, Vinacomin has to export its coal to offset losses in domestic sales. If the selling price in the domestic market was near the exporting price, Vinacomin would not have to export coal.

If EVN-run power plants use imported coal for electric production, Vinacomin will be the first beneficiary. However, on the national economic scale, coal import will lead to higher prices of electricity and big ports need to be built to transport coal. Therefore, if there is a sound pricing regime for both power and coal, both coal and electric industries will mutually benefit.

 

At present, not only supplying fuels to power generators, Vinacomin also produces electricity. In 2010, Vinacomin will operate six thermoelectric plants with a combined turbine capacity of some 1,500 MW, including Na Duong, Cao Ngan, Cam Pha, Son dong, Mao Khe and Nong Son.

 

Vinacomin said when it stepped into power production, it encountered numerous difficulties because the selling price of electricity at Na Duong and Cao Ngan thermal power plants was lower than the rate EVN imported from China. Thus, if the two sides reached an agreement on selling prices, electric investors in Vietnam will also meet with more favourable conditions. Vinacomin is ready to cooperate and compete fairly to create a strong foundation for all concerned enterprises to develop.

 

Vinacomin and EVN are discussing of strategic cooperation agreements and will sign long-term coal supply contracts. Accordingly, EVN asks Vinacomin to ensure the maximum supply of coal for EVN-operated coal-fired power plants from 2010 to 2020. Besides, Vinacomin and EVN are also studying the possibility of investing in exploiting coal in Vietnam and in other countries.

 

Also, Vinacomin joined hands with the Bank for Investment and Development of Vietnam (BIDV), the Vietnam National Oil and Gas Group (PetroVietnam), the Vietnam Posts and Telecommunications Group (VNPT), the Song Da Corporation and other entities to set up the Vietnam Industry and Energy Fund with a chartered capital of VND10,000 billion. The founders will contribute the capital and disburse it in four years. After investing the capital, the fund will transformed into a public fund and listed on the stock exchange. Thermal power plants are on the list of top priorities of the fund. Additionally, Vinacomin also wants to work with EVN and PetroVietnam on cooperative plans to bring the strengths of three largest energy groups in the country into full play.