Many power projects are behind schedule, increasing power shortage pressure

	Measures needed for delayed thermal power projects
	Many loss-making projects have reduced financial pressure by hundreds of billions VND
	FDI poured into industrial zones in 6 months

Long Phu 1 thermoelectricity plant is a typical slow power projects. Photo: N.Thanh

Power shortage in 2021

A report of Department of Electricity and Renewable Energy (Ministry of Industry and Trade) showed that to meet electricity demand with an average growth rate of 8.6 percent/year according to the basic plan in Electricity Planning VII adjusted (the output of electricity needed to be supplemented on an average of 26.5 billion kWh/year), each year, the power source capacity needs to be supplemented with at least 4,500-5,000 MW of thermal power source or from 14,000-16,000 MW if using the renewable sources (due to low capacity utilisation of renewable energy sources, only from 1,500-2,000h/year).

Phuong Hoang Kim - Director of Department of Electricity and Renewable Energy said, in 2020, basically, electricity demand for socio-economic development will be met. However, supply of electricity continues to have some potential risks, which may face the risk of power shortage in extreme situations such as demand is higher than supply, water flow to hydroelectric reservoirs is poor and continued shortage of coal and gas for electricity production.

In 2021-2025, according to the Department of Electricity and Renewable Energy, the whole system will lack electricity (although it has to mobilise maximum power sources, including oil sources). Specifically, the shortage output in 2021 is about 6.6 billion kWh; by 2022, it will increase to about 11.8 billion kWh; 2023 can be up to 15 billion kWh (equivalent to ~ 5 percent of demand). In the years 2024-2025, the shortage will decrease gradually after supplementing the power source from the Block B, Blue Whale.

47 power projects "delay"

Many big power source projects are behind schedule, especially BOT power sources and coal-fired thermal power projects are identified as the key causes leading to the risk of power shortage mentioned above.

According to the adjusted VII Electricity Plan, the total capacity of power sources expected to be put into operation in 2016-2020 is 21,650 MW. Currently, power source projects are implemented in three forms of investment, including projects by State-owned corporations including Electricity of Vietnam (EVN), Vietnam Oil and Gas Group (PVN), Group Vietnam Coal-Mineral Industry (TKV) is the investor; investment projects in the form of Build-Operate-Transfer (BOT); and investment projects in the form of independent electricity projects (IPP).

Through further analysis of power projects, Phuong Hoang Kim pointed out that the progress of implementing 62 projects with large capacity of more than 200 MW, 15 projects reached progress, the remaining 47 projects were behind schedule or have not determined the progress compared to the schedule stated in the VIIth Electricity Plan adjusted. For example, in 2016-2030, EVN was assigned to invest in 24 projects (including Bac Ai hydropower project) with a total capacity of 15,215 MW, with a target that in 2016-2020 it would have completed 14 projects with a total capacity of 7,185 MW. Out of the 24 projects, nine have generated electricity, six are scheduled to be on schedule and nine are behind schedule. Notably, PVN was assigned to be the investor of eight key power source projects with total capacity of 11,400 MW. In the period 2016-2020 there are three projects and 2021-2025 has five projects. So far, all eight projects have difficulties and problems and cannot be completed according to the schedule in the Electricity Plan VII adjusted.

Regarding this issue, Deputy Minister of Industry and Trade Hoang Quoc Vuong added that the characteristics of energy projects are large-scale, most of thermal power projects have a total investment of more than 2 billion USD, construction time is relatively long with thousands of complicated issues. Therefore, the investor cannot find a contractor with the ability to lead to the possibility of lasting many years. In addition, policy changes in guaranteeing projects, even for a strong financial group like PVN without Government guarantees, will face difficulties in capital issues. In the past, when there was a Government guarantee of only one year to arrange capital, there is no more now, it will certainly be longer. "Of the 62 electricity projects implemented, only 15 projects have reached the schedule so far, 47 projects are slow, there are 3-4 projects behind schedule. If there is no remedy, this will be big difficulties in the coming time," Deputy Minister Vuong said.

Determine the progress of the project

Minister of Industry and Trade Tran Tuan Anh assessed that the slow progress of electricity projects leads to immediate risks including both subjective and objective reasons. In subjective reasons, there are difficult issues due to overlapping regulations and procedures but there are also problems that can be solved. Anh asked the Department of Electricity and Renewable Energy and other relevant units to speed up the progress of projects, working with the highest sense of responsibility and review sanctions and legal regulations for investors whose projects are behind schedule.

Notably, with BOT power projects, Anh raised the issue of having an investor receive the project and then find a way to sell the project. Take the Long Phu 2 project of Tata (India) in Soc Trang as an example, Minister Tran Tuan Anh said they seek to sell the project to other investors. He requested the Department of Electricity and Renewable Energy to re-understand the mechanism and legal mechanism to avoid assigning projects to "irresponsible investors", causing great frustration for the central Government as well as local authorities.

Deputy Minister Vuong said to solve the lack of electricity, it is necessary to accelerate the implementation of renewable energy projects by the time of implementing these projects faster than thermal power. In the medium term, it is necessary to accelerate the progress of ongoing projects. Accordingly, a monthly meeting must be held once, three months to set up an inspection team to the works once. Projects that have simple problems that can be handled sooner need to be accelerated. In the long term, it is necessary to change the way of making the electricity diagram VIII.

It is also important to emphasise the responsibilities of some local leaders due to the lack of drastic direction for projects in the Electricity Plan VII adjusted, leading to a break in the structure of the planning, Minister Tran Tuan Anh stated clearly for the Electricity Planning VIII, the units under the Ministry are required to accelerate the completion, in which, the method of implementing and updating the actual situation, paying attention to the source structure and issues related to technology, the legal framework in the future.