Demand-Response programs planned to reduce power shortages

09:22 | 16/07/2019 Industry

(VEN) - In order to strengthen power demand management, reduce risks of power shortages and ease pressure on the power industry, Vietnam Electricity (EVN) and the Northern Power Corporation (EVNNPC) are making efforts to implement demand-response (DR) programs that limit electricity usage during peak periods.

demand response programs planned to reduce power shortages
The demand for power is increasing

Risk of power shortages and solutions

Deputy General Director of EVN Vo Quang Lam said that as of April 2019, Vietnam’s total installed power capacity is about 50,000MW. However, in order to meet the economic growth targets set by the Government, Vietnam needs to put into operation 5,000MW of new power sources a year and invest US$7-8 billion in power source and grid systems. In fact, for the past several years, Vietnam has not operated large-scale power sources projects. According to the adjusted power plan VII, progress has slowed over the past two-three years on coal-fired and gas-fired power projects. In addition, as primary energy sources are running out, Vietnam now imports some fuels (coal, oil and gas). Water levels for hydropower projects are also declining due to the impact of climate change. Meanwhile, power demand continues to grow at double-digit number, and is expected to continue at least until 2025.

Energy experts are warning that the risk of power shortage is real unless timely solutions are implemented, saying the most urgent solution now is to manage demand and promote energy efficiency, such as the DR program.

Although EVN and its units have implemented many power saving programs in recent years, these have not met expectations, especially in the industrial manufacturing sector.

Vo Quang Lam said that power consumption of industrial producers accounts for about 55percent of the country’s total electricity, equivalent to 100 billion kWh (2018). If they cut consumption by even one percent (or one billion kWh), they will save nearly VND1.6 billion.

Many benefits from DR program

Nguyen Anh Tuan, director of the Electricity Regulatory Authority of Vietnam (ERAV), said that the management and operation cost of the power systems during peak hours is much higher than in off-peak hours though the load demand may be the same. Therefore, the DR program is both a short-term and a long-term solution, contributing to ensuring power supply safety and sustainable development.

The DR program contributes to supply-demand balance, optimizing the power system, and improving power reliability and supply safety. The implementation of this program will help change customers’ power demand; reduce maximum capacity at peak hours of the national, regional power systems, or in areas with grid system overload.

The target of the program is to reduce peak load capacity compared to previous forecasts: 90MW by 2020, 300MW (2025) and 600MW (2030); increase the load factor of the national power system by about 1-2 percent in the 2018-2020 period and 3-4 percent for the 2021-2030 period.

Implementation of the DR program will benefit the economy; protect the environment; conserve natural resources; and ensure energy security for sustainable development. As for the power industry, it will help reduce operating costs, improve operational efficiency, reduce demand for investment capital; and improve service quality for customers.

Support mechanisms

EVN and EVNNPC will deploy the DR program on a voluntary, non-profit basis by selecting enterprises with power consumption of 1 million kWh per year or more, which are able to reduce power consumption automatically or manually by 10-20 percent within 30 minutes of receiving notice. Each response will not take more than three hours.

Deputy General Director of the Hung Yen Power Company Ha My Hanh said the program is useful and practical for businesses. However, in addition to the efforts of the power industry, it requires the involvement of authorities at different levels and of the business community, especially support mechanism for participants.

According to representatives of the ERAV, there are three types of DR programs: voluntary DR; direct encouragement DR (receiving payments based on the saved power capacity) and DR based on power price regulations. Customers will get corresponding incentives depending on what type of program they join.

The ERAV is directing businesses in the power industry to implement the DR program and cooperate with the Ministry

of Finance and related agencies to work out a specific incentive mechanism suitable for each implementation period.

Dinh Dung