In the "thirst" of electricity – Part 1: Lack of electricity is no longer a risk

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The electricity industry is facing difficulties to ensure sufficient electricity supply. Photo: Nguyen Thanh

The electricity industry is facing difficulties to meet sufficient electricity demand in 2019 and may lack electricity in 2020. This situation may even last for the following years and is particularly serious in the southern region.

Lack of electricity for long time

On the demand as well as the ability to supply electricity in 2019, especially in the dry season, Vu Xuan Khu-Deputy Director of the National Center for Electricity System A0, Vietnam Electricity (EVN) said according to the plan for electricity system operation 2019 approved by the Ministry of Industry and Trade, expected electricity output in the year is 242 billion kWh, average growth of 10% compared to 2018. This rate is equivalent to the rate of the past 10 years. This year, GDP is expected to rise by 6.6-6.8%. Thus, the rate of elasticity on electricity is about 1.5%. This is a higher level than other countries in the region and the world.

“Regarding the capacity of the electricity system in 2019, the maximum capacity is expected to reach 39,044 MW, growing by 11.15% compared to 2018. With such a growth in capacity and output, meeting the electricity demand for 2019 is difficult. Electricity load is still increasing while the supply is not significant,"said Khu.

Khu added: “In the current electricity system, there are three main types of electricity: hydroelectricity, thermoelectricity and gas turbine. For hydroelectricity, in early 2019, the amount of water accumulated in the reservoirs was not sufficient. The level of waterfaceda shortage of 5.5 billion m3 compared to the normal, equivalent to 2.45 billion kWh of electricity. This shortage is mainly in hydropower plants in the south and central regions. Besides, coal for domestic power plants failed to meet expectations. There were even insufficiencies of coal. For gas turbines, there were no new sources.”

This year, the Government offers preferential policies for solar power plants. It is expected that by June 30, a series of solar power plant projects in the southern region will be put into operation. This is an additional supply which is not easy to operate because of dependence on the sun.

According to Ngo Son Hai - EVN Deputy General Director: “During the operation of the electricity system since the beginning of the year, the demand for electricity has increased, especially in April and May due to hot weather. In addition, the water sources in the central and southern hydropower reservoirs are insufficient. Many lakes in the south are close to dead water level. Therefore, EVN faces difficulties in calculating and ensuring electricity supply.”

Not only difficult in 2019, the electricity supply becomes more and more difficult, especially in the southern region. EVN's report shows that with the basic load plan and frequency of water for hydropower reservoirs at average for many years, in 2019-2020, in general, electricity supply can be ensured.

However, oil-fired thermal power source needs to be mobilised with the output of nearly 4.4 billion kWh in 2019 and 5.2 billion kWh in 2020. In case of the generators failing to meet the operational reliability or having sufficient fuel (coal, gas) for electricity generation, Vietnam may face the risk of electricity shortage by 2020. In 2021-2023, the electricity system does not meet electricity demand and there is likely to be a power shortage in the south.

The power shortage in the Ssuth may rise higher and/or extend to the whole period until 2025 in the following cases: the load grows, Block B gas and Blue Whale gas sources are behind the progress and new power projects continue to be delayed. Each 1,000 - 1,200 MW coal-fired thermal power project in the south behind schedule will raise the power shortage in the south from 7, 2-7.5 billion kWh per year. By 2026 - 2030, in general, the electricity supply is guaranteed if the power sources meet the schedules.

Lack of electricity for operation

EVN said that the lack of power was because the power sources are projected to be put into operation in the next five years was much lower than the requirements of the revised Seventh Power Development Plan.

According to the revised Seventh Power Development Plan, for 2018-2022, the total capacity of power sources expected to be put into operation is 34,864 MW, of which thermal power is 26,000MW. In fact, only seven coal-fired thermal power projects / 7,860MW have been started and are under construction. Thus, over 18,000 MW / 26,000 MW of coal-fired thermal power projects are expected to operate in the next five years but have not been started. In addition, many power projects, especially thermal power projects in the south, have potential risks and may continue to be delayed. In addition, ensuring fuel sources for electricity generation has potential risks such as the current natural gas sources in the country have been reduced but there is no alternative source.

Some experts said that low electricity price is one of the factors that makes investment in the electricity industry less attractive, leading to high risk of high electricity shortage as at present. Expert Nguyen Thanh Son said: “If compared to countries with average GDP level on par with Vietnam, Vietnam's electricity price is currently lower than 7%. This may cause difficulty for enterprises manufacturers. In particular, if the electricity price is not improved, EVN has no capital to invest. Meanwhile, investment attaraction, especially foreign investment in manufacturing sectors is increasing, electricity consumption is growing, thereby causing more pressure on the electricity industry.”

On March 20, the Ministry of Industry and Trade raise the average electricity retail price by 8.36% and received controversial comments, especially after the first month of price raising and electricity charges of many households skyrocketed. Son emphasised: “EVN can absolutely explain and make the electricity price issue transparent so that people and businesses can understand.”

Need to synchronise solutions

In the period to 2030, the demand for electricity will continue to grow at a high level. The electricity industry needs to produce 265-278 billion kWh by 2020 and about 572-632 billion kWh by 2030. The growth rate in the 2016-2020 period is 10.3-11.3% / year and the period the period of 2021 - 2030 is about 8-8.5% / year.

Khu said that in 2019 to ensure power supply, EVN has directed units to work with power plant owners and creating all conditions to bring new coal power sources into operation and coordinate closely with investors to bring more solar power plants into operation soon, increasing the electricity supply, especially in the southern region. “We will closely monitor developments as well as the ability to provide coal fuel as well as gas for power plants to make plan and regulate the plant reasonably; follow the changes in hydropower reservoirs to develop appropriate strategies for exploiting hydropower plants,”said Khu.

In the long run, Khu added: “To ensure power supply for this year and the next years, EVN is considering importing some expensive sources such as liquefied natural gas (LNG). However, the implementation of these projecttakes a lot of time and has difficulties such as financial mobilisation, investment, construction of terminals and port warehouses and site clearance.”

It is too far away to ensure electricity security in Vietnam VCN- According to Mr. Le Van Luc, Deputy Director of the Department of Electricity and Renewable Energy ...

According to Hai, to ensure energy security in the future, it is necessary to synchronise two solutions which are controlling load demand and ensuring power supply. For the control of the load, it is necessary to strengthen solutions of safe, economical and efficient use of electricity and Demand Side Management (DSM); give priority to the Southern region; and issue mechanismsto promote the load regulatory program. In terms of power supply for the immediate future until 2021, it is necessary to reach the schedule and put power sources into operation, especially in the south such as Long Phu 1 and Song Hau 1 Thermal Power Projects, BOT Duyen Hai 2. In addition, the State should implement electricity selling price according to the market mechanism under the State management. Electricity selling price should promote the development of the electricity industry, create an environment to attract investment and encourage competition in production, transmission, distribution, retail and economical and efficient use of electricity.