HCMC – Vietnam Electricity (EVN) and relevant ministries insist a capital shortfall is the biggest obstacle when implementing the national power development plan in 2011-2020 and a power price hike has been brought forward as a solution.
Poor power funds halting progress: EVN
By Van Nam - The Saigon Times Daily
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| A wind power project in the Mekong Delta province of Bac Lieu. A capital shortfall is hindering the national power development plan in 2011-2020 and as a result a power price hike has been proposed to cope with it - Photo: Van Nam |
HCMC – Vietnam Electricity (EVN) and relevant ministries insist a capital shortfall is the biggest obstacle when implementing the national power development plan in 2011-2020 and a power price hike has been brought forward as a solution.
At an online meeting on the Government web portal on Thursday, EVN deputy general director Duong Quang Thanh said EVN would need to invest over VND500 trillion in 2011-2015. The State-run group has mobilized more than VND315 trillion.
The deficient fund will be mainly used for power plants that are in the offing, such as My Tan 4, expanded Duyen Hai 3, O Mon 3, and O Mon 4.
Thanh said the capital shortage would directly affect the progress of the power projects. Particularly, this year, the key projects to supply power for the southern region fall short by over VND8.9 trillion.
Hoang Quoc Vuong, deputy minister of Industry and Trade, told the meeting that financial distress would be the greatest challenge when rolling out the plan, aka Power Plan 7. The issue cannot be solved overnight, and it will certainly impact the project progress.
To deal with the matter, Vuong said a new power pricing policy should be approved. With appropriate power tariffs, investors will be able to secure electricity supply for the country.
In July 2011, the Government gave the nod to Power Plan 7 which is designed to generate an additional 5,000 megawatts every year by 2020, and develop power stations and power lines worth US$5 billion per year from now to 2020 and US$60 billion in 2020-2030.
Meanwhile, Phan Ngoc Quang, deputy head of the Department of Investment under the Ministry of Finance, said: “In the annual balance sheets, it can be seen that we have to depend much on external capital sources. The Vietnamese side can only finance 70-80% at the most.”
However, Tran Viet Ngai, chairman of the Vietnam Energy Association (VEA), told the Daily the total capacity of power plants nationwide was now 24,000 megawatts. Power Plan 7 sets a target of 75,000 megawatts by 2020, meaning there are only eight years left to develop an extra 50,000 megawatts, which is deemed as unachievable.
He said VEA is ready to submit a petition to the Government and the National Assembly, seeking a second thought on the master plan for the energy system of Vietnam.
“Our recalculation shows that the total capital demand of the power industry until 2020 is not as high as the figure given in Power Plan 7,” Ngai noted.
Therefore, VEA suggested eliminating some pumped-storage hydropower and coal-fired thermal power projects and excluding nuclear power supply from the total power output in 2020 to reduce the capital pressure on projects that are not necessary just yet.
Moreover, VEA proposed increasing the renewable energy supply. For example, Power Plan 7 sets a goal of 1,000 megawatts for wind power capacity by 2020, but VEA wants it revised up to 9,000 megawatts.