Vietnam Ensures Future Power Supply

Vietnam Ensures Future Power Supply

The Ministry of Industry estimates that Vietnam’s power demand will soar to 93-100 billion KWh in 2010, 200-230 billion KWh in 2020 and 625-766 billion KWh in 2050 with per capita demand reaching 2,058-2,350 KWh by 2020 and 6,100-7,500 KWh by 2050. To ensure a sufficient supply, the country will construct many new thermal and hydroelectric plants, purchase electricity from neighbouring countries, and increase energy efficiency among its industries and residents.

Under a draft policy on national energy recently devised by the ministry, Vietnam will pour around US$78.5 billion into developing its energy sector between 2002 and 2020, with investment in the electricity industry estimated to account for four per cent of the country’s gross domestic product (GDP) in the 2002-2010 period and 2.5 per cent of the GDP in the 2011-2020 period. The money will be mainly used to construct power plants fuelled by coal, oil, gas and river energy, and transmission systems.

Vietnam's total capacity of hydroelectric plants will climb to 8,800 MW by 2010 and 15,000 MW by 2020, producing a combined electricity output of 35 billion KWh and 60 billion KWh, respectively. The Red River Delta, home to the country’s biggest hydroelectric plant of Hoa Binh with a yearly output of 8.1 billion KWh, is suitable for building large-scale plants. With its short rivers and streams, the central region is an ideal place for small-and medium-sized plants, local experts say, estimating that on the rivers of Thu Bon, Tra Khuc, Vu Gia and Ba in Quang Ngai province alone, roughly 30 hydroelectric plants with combined capacity of 2,000 MW can be built.

Besides hydroelectricity, Vietnam will intensify investment in exploring and exploiting oil fields so that gas-fired power plants in southern localities will receive 6.3-7 billion cubic meters of gas to reach total capacity of 7,000 MW in 2010. The respective figures for 2020 are 11,000-14,000 MW and 11.5-15 billion cubic meters. Coal-run plants are expected to have a combined capacity of 4,200 MW in 2010 and 9,000-10,000 MW in 2020, which are predicted to consume 10 million and 20-30 million tons of coal, respectively. To fuel new power works, the country is further tapping coalmines in the northern region, especially in the provinces of Quang Ninh and Hung Yen.

The Vietnam Coal Corporation said it is seeking foreign investment of more than US$750 million to construct seven coal-fired plants with total capacity of 1,232 MW by 2010, at a total cost of over US$1 billion. Three plants with combined capacity of 500 MW in the northeast region will be put into operational by 2007. Four other power facilities include a 300-MW plant in northern Quang Ninh province, a 300-MW in northern Hung Yen province, a 100-MW in northern Bac Giang province, and a 32-MW in central Quang Nam province.

In addition to traditional power sources, Vietnam has started to pay attention to developing nuclear plants, which are expected to annually turn out 170-200 billion KWh of electricity. The country is mapping out a strategy on atomic energy development, including the inauguration of its first nuclear power plant some time between 2015 and 2020. Vuong Huu Tan, director of the Vietnam Atomic Energy Commission, said the 2,000-MW plant could be located either in central Ninh Thuan province or Phu Yen province. The country plans to begin construction of a new nuclear reactor to replace the existing one in central highlands Lam Dong province in the next few years. Its sole reactor with capacity of 500 kW, which was officially put into operation in 1984, is used for training and research purposes.

As well as new power plants, Vietnam, between now and 2010, will have to construct 2,326 km of transmission lines and build 15 transformer stations with total capacity of 8,550 MVA serving the 500-KV grid. It will have to establish 5,064 km of lines and 55 transformer stations with combined capacity of 15,628 MVA for the 220-KV grid. All the new constructions need huge investment, so the Electricity of Vietnam (EVN) has called for foreign-invested enterprises to engage in independent power projects more actively. The enterprises are also offered greater opportunities to invest in the establishment of electricity distribution networks and the production of electric mechanical equipment. EVN said the corporation manages to mobilize only half of the total required capital of US$1.5-2 billion slated for investment each year, so it has to resort to domestic and foreign loans.

In July 2004, EVN started to set up a competitive electricity market to create a competitive environment for all suppliers and lure more domestic and foreign investment into the local industry. The market will experience three development phases. In the first phase, all electricity producers outside the corporation must compete with one another to sell power to EVN on the basis that they can rent transmission lines to facilitate direct selling to any group of customers in residential areas. In the second phase, all producers outside EVN and big customers are allowed to freely choose their partners on the principle of competitive price offering. In the third phase, scheduled to start in January 2005, every producer and retail seller will compete with one another to sell electricity to all customers nationwide. 

Despite its efforts to build more power plants and create a more flexible environment for electricity investors, Vietnam will have to purchase electricity from neighbouring countries such as Laos, China and Cambodia. Some 25-27 per cent of the domestic demand for energy in 2020, and 57-62 per cent of the demand, excluding nuclear fuel, in 2050 will be satisfied by imports, according to the ministry’s forecast. Under the draft policy, Vietnam will buy electricity from Laos, China and Cambodia with combined volumes of 400 MW by 2010, 4,000 MW by 2020 and 10,000 MW by 2050.

In April 2004, Vietnam imported electricity from China for the first time, as part of a program to connect its grids with those of regional countries. Under a three-year contract, the Power Company No. 1 under EVN buys electricity from the Yunnan Electric Power Group Co., Ltd. under the China Southern Power Grid via the 110-KV transmission line with capacity of 40 MW and annual output of 180-200 million KWh.

The China-Vietnam electricity cooperation is a step towards the realization of the Inter-Governmental Agreement on Regional Power Trade in the Greater Mekong Sub-region signed on November 2002, said Wang Dazhuo, General Manager of the Yunnan Electric Power Group Co., Ltd. "We hope that Vietnam will purchase more electricity via the 220-kv transmission line from China after the contract expires in late December 2006. At that time, national grids of the two countries will be connected together," he said.

Along with greater investment in power infrastructure and electricity imports, Vietnam is striving to raise its efficiency of energy usage, especially among power-hungry sectors and residents. The industry sector, which makes up some 38 per cent of the total energy demand, will renew technologies and use more modern equipment to save electricity. The industry’s energy demand is forecast to stand at 13.4-14 million tonnes of oil equivalent (TOE), and the demand for civil use will reach 4.4 million TOE in 2010.

Vietnam has planned to invest over VND23.5 trillion (nearly US$1.5 billion) mainly into constructing power plants and grids in 2004, posting a year-on-year increase of 20.8 per cent. The country's total electricity capacity is estimated at 8,750 MW, of which 53 per cent is hydroelectricity.

• Dong Phong