Unattainable coal-fired power puts Vietnam under power shortage risk

Le Van Luc, deputy head of the Electricity and Renewable Energy Authority under the Ministry of Industry and Trade made this headline at a workshop held in Hanoi on December 13.

Luc further said that coal-fueled power makes a significant contribution to the country’s energy development, accounting for 37-38 percent of the total power output.

In light of the revised Power Development Plan VII (PDP VII), coal-fired power projects that are expected to be implemented between 2016 and 2020 would generate the combined capacity of 13,850 MW, while those operational in the 2012-2025 period could produce an estimated 21,600 MW, and 8,700 MW for 2026 – 2030.

But, the combined capacity from coal-fired power projects that are expected to become operational in 2016-2020 will reach only 8,000 MW, representing 58 percent of the projected figure, Luc said.

He blamed the sluggish progress on implementation on a number of coal-fueled power projects, including Thai Binh 2, Long Phu 1, Song Hau 1, Cong Thanh and Hai Duong.

The dawdling progress was attributed to a lack of capital and also investors’ poor performances and their shortcomings in executing the projects.

Meanwhile, the negotiations and pre-investment preparations for some coal-sourced power projects under the build-operate-transfer (BOT) investment format have been extended, Luc added, explaining that many investors are concerned about the risk of not getting their investment back.

He noted that the development of coal-fired power in Vietnam is facing a number of other challenges.

Localities such as the northern province of Quang Ninh, Bac Lieu and Long An in the Mekong Delta region said no to additional coal-fired power projects due to their concerns over the environmental impact the projects could result in.

Despite being approved in the revised PDP 7, some coal-fired power projects including Long An 1 and Long An 2 (with the total capacity of 2,800 MW) and Bac Lieu 1 (1,200 MW) now appear unfeasible as the authorities for these provinces did not support the go-ahead for these plans.

To make up for the expected lack of coal power, scenarios for developing liquefied natural gas (LNG) – sourced power and solar power have been outlined.

However, the additional costs for LNG and solar power generation  have emerged as a big drawback.

The price of coal-fired power remains at VND1,600 (6.8 US cents), much lower than those for LNG-sourced power and solar power, fixed at some VND 2,100 (9.35 US cents).

“If we use LNG or solar sources in generating the power to make up for coal-fired power plants with the combined capacity of 1,000 MW and the total output of 7 billion kWh per year, costs for the LNG and solar power generation are VND 3.5 trillion (US$ 150.5 million) higher than that of coal-fueled power production”, Luc said.

Also at the workshop, many experts and businesses insisted that one should not embrace negative approach towards coal-fired power which plays a key role in ensuring the country’s energy security.

More detailed and stringent assessment of the environment impact which coal-fueled power projects could have is needed and the results of research performed should be publicized broadly, they added.