BOT projects seek ‘clean coal’ model

Demand for clean solutions

As it awaits the Vietnamese government’s approval in principle to commence construction of the 1,200-megawatt (MW) Quynh Lap 2 power plant, South Korean firm Posco Group is fine-tuning the technology which will go inside.

“As you know, financial institutions such as the World Bank, the European Investment Bank and commercial lenders have started to restrict or phase out their financial support of coal-fired power generation. Therefore, clean coal technology is our priority for developing the Quynh Lap 2 thermal power plant,” a Posco Group representative told VIR.

‘Clean coal technology’ describes a new generation of energy processes, some currently available and others being developed, which have the ability to sharply reduce air emissions and other pollutants. 

These new technological breakthroughs make it possible for new and older coal-burning power plants to produce power in an economical and environmentally-responsible manner.

According to Posco, the US$2.2 billion Quynh Lap 2 plant in the central province of Nghe An is committed to using the most advanced supercritical technology.

This would be Posco’s second power project in Vietnam, following the US$2.1 billion build-operate- transfer (BOT) 1,242MW Mong Duong 2 coal-fired thermal power plant – the largest BOT coal-fired power plant in Vietnam. Posco Energy holds a 30% share in the plant’s ownership consortium, which also includes American firm AES Corporation (51% stake) and China Investment Corporation.

“We have not faced any environmental issues for Mong Duong 2 coal-fired thermal power since the first day of connecting to the national grid in 2014,” the representative said.

According to AES Corporation, Mong Duong 2 uses a pulverised coal-fired boiler, which involves the pulverisation of the coal to a fine degree to spray into the furnace.

The US$2.2 billion Nghi Son power plant is also expected to be granted an investment certificate this year. Choi Jung Ho, general director of plant developer Nghi Son 2 Power Company, told VIR through email, “The Nghi Son 2 project has been processed through international tender, which requires strict global environmental compliance from the bidders. Since being awarded the bid in 2013, [plant investor Korea Electric Power Corporation] has been carefully preparing for construction of the plant, as well as its operation, to minimise environmental impact by way of relevant studies and reviews.”

The list of BOT power projects will rise as some foreign firms are currently in negotiations or are conducting feasibility studies to build power plants nationwide, such as South Korea’s Samsung C&T Corporation, India’s Tata Power, and Thailand’s EGATI. This means there will be large demand for clean coal technology in the future, as coal-fired plants may remain an essential part of the nation’s energy picture for years to come.

The rules of the game

Thermal power generation has entered a period of fundamental change in which thermal generators must adjust to the “rules of the game” by providing new services and by improving their environmental performance, efficiency, flexibility, and competitiveness. 

Indeed, a “business as usual” strategy would not only be damaging for thermal generators, but also unfortunate for the power system as a whole.

In the revised Power Development Plan VII, the government has set a high standard for energy technologies: “Technologies selected must be advanced, highly productive, and have the least impact on the environment. Newly-constructed electricity facilities must possess modern technology pertinent to Vietnam’s economic conditions, and the facilities must be upgraded and renovated gradually to adhere to technical, economic, and environmental standards.”

Nguyen Manh Hien, former director of the Energy Institute under the Ministry of Industry and Trade, said in a recent forum, “Turning to clean coal technology is a way of making use of this abundant and available resource in the most environmentally-responsible way possible. New coal technology promises to balance environmental concerns and economic benefits, while continuing to satisfy the demand.”

In the 1960s, Japan reached a similar crossroads to where Vietnam is now, with environmental issues brought on by its own period of rapid industrialisation. However, Japan was able to overcome these challenges and realise long-term economic growth in an environmentally-friendly manner.

Takamitsu Saito, chief representative of Mitsubishi Hitachi Power Systems (MHPS) in Hanoi, had some advice from this perspective. 

“The Vietnamese society can develop sustainably by utilising highly-efficient and reliable technologies, and working in co-operation with international companies,” he said.