Lacking gas, EVN has more reasons to raise electricity price

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VietnamNet English - 36 month(s) ago 3 readings

Lacking gas, EVN has more reasons to raise electricity price

VietNamNet Bridge – PetroVietnam churns out 9 billion cubic meters of gas, but it only sells 5.7 billion cubic meters to power generators. Lacking 800 million cubic meters of gas for generating power, the Electricity of Vietnam EVN will have to spend 18 trillion dong to buy oil to generate power, and have one more reason to raise the electricity price.




Gas shortage would lead to electricity shortage

Pham Le Thanh, General Director of the Electricity of Vietnam EVN informed at the meeting discussing the production plan in 2011-2015 held by the Ministry of Industry and Trade on December 7, that in 2012, the production may have some problems due to the gas supply.

As planned, EVN will need 6.6 billion cubic meters of gas in 2012, but it can only buy 5.7 billion cubic meters of gas. Therefore, EVN will have to use oil to generate the remaining 4.2 billion cubic meters of gas.

EVN has also warned that Vietnam may have to use oil to run power generators in the next five years, if the national economy grows rapidly. EVN has submitted a report to the government that in order to meet the demand of a national economy with the GDP growth rate of 6.5-7 percent per annum, the commercial electricity output needs to increase by 13-15 percent.

In case the electricity output needs to increase greatly by 15 percent, Thanh said that it is estimated that 11-12 billion kwh of electricity would be generated from oil. Meanwhile, generating power from oil is the biggest obsession to the EVN.

Deputy Minister of Industry and Trade Hoang Quoc Vuong said that if using oil to offset the shortage of nearly one billion cubic meters of gas, EVN will have to pay 18 trillion dong additionally. “No high electricity price can offset such a big sum of money,” Vuong said.

In fact, the short gas supply has forced the Electricity Regulatory Unit to cut electricity in some provinces in the south already. On November 28, for example, since the Vietnam Gas Corporation did not increase the gas supplied to the Ba Ria power plant, the unit had to cut 25 MW in additional charge.

In order to provide enough electricity, Thanh said that EVN needs to see its four proposals satisfied. First of all, it needs enough gas. Secondly, the electricity price needs to be reasonable to ensure the financial sources for EVN to develop. Thirdly, electricity projects need to have enough capital. Fourthly, it is necessary to facilitate the site clearance for electricity network projects.

Vietnam does not lack gas

In fact, Vietnam does not lack gas to sell to power generators. PetroVietnam, the biggest gas supplier, said at a press conference held recently that in 2011, it churns out 9 cubic meters of gas.

“PetroVietnam said it puts out 9 billion cubic meters of gas this year, but it sells only 5.7 cubic meters to EVN. How about the remaining volume of gas?” questioned Deputy Prime Minister Hoang Trung Hai.

Hai went on to say that PetroVietnam needs to prioritize to provide gas to serve the electricity production.

Also according to the Deputy Prime Minister, a big challenge in the next year is the energy balancing. Vietnam will begin lacking coal from 2015 and it will have to import coal.

It is clear that the electricity shortage would be a big obstacle for Vietnam when calling for foreign investment. Therefore, Hai has instructed the three powerful economic groups that make electricity, coal and gas to cooperate closely to settle the problems to ensure to provide enough electricity to the national economy.

Pham Huyen

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