Balancing surging power demand with limited supply

10:09 | 08/05/2019 Energy

(VEN) - To address the risks of future power shortages, Vietnam is trying to curb its growing energy demand.

balancing surging power demand with limited supply

Huge pressure

According to the Vietnam Electricity (EVN), to meet surging demand for power during the 2016-2030 period, total installed capacity would have to increase by 6,000-7,000MW per year. However, power projects of independent power producers (IPP) included in the revised Power Development Plan VII are lagging behind schedule.

A series of solar power plants will go into operation before the commercial operation date (COD) deadline of June 30, 2019. However, these plants are mainly concentrated in the central region, where solar power capacity fluctuates across the seasons of the year, resulting in high instability in the power system. Vietnam is also experiencing a decline in gas resources, while hydropower plants in the central region lack water due to the El Nino phenomenon.

To ensure power supply, EVN is forced to run oil-fired thermal power plants, which incur high production costs. However, the company is also facing a lack of input fuel, with domestic coal resources insufficient to meet thermal power plant requirements. The Vietnam National Coal-Mineral Industries Group (Vinacomin) and the Dong Bac Corporation are importing coal to mix with domestic coal.

According to preliminary calculations, the use of mixed coal will increase production costs, resulting in an increase in the purchasing price of electricity. The power sector is subject to additional environmental protection taxes and fees for coal-fired thermal power. As a result, the input cost of power production is expected to increase by more than VND20 trillion, creating huge pressure on the power sector.

Paying attention to supply, demand

Professor Tran Dinh Long says Vietnam has not paid sufficient attention to energy demand, despite the Law on Energy Efficiency and Conservation.

Economist Pham Chi Lan says Vietnam is still subsidizing electricity prices, creating a disincentive for business to upgrade technologies in order to save costs, which in turn results in large power consumption, especially in steel and cement production. Subsidies should be abolished to promote the development of renewable energy and green energy, while strengthening power saving.

According to experts, enforcement of the Law on Energy Efficiency and Conservation is an effective solution to control energy demand. In addition, mechanisms and policies to support businesses in changing production lines are required, as are setting electricity prices according to market mechanisms.

EVN General Director Tran Dinh Nhan said EVN would make greater efforts to ensure the supply of fuel sources;

encourage and facilitate the development of renewable power projects; implement measures to control energy

demand, and strengthen dissemination of information to raise community awareness of energy efficiency and

conservation.

Nguyen Vu