Vietnam considers increasing imports of Chinese electricity

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With increasing demand for electricity, the power sector is struggling to supply sufficient electricity. Photo:

Increasing electricity imports to 3.6 billion kWh / year from 2021

In the report of the Electricity and Renewable Energy Department, at a meeting on electricity supply and demand on July 17, the import of electricity from China and Laos was considered one solution to Vietnam's electricity demand in the future.

On May 30, 2019, the Ministry of Industry and Trade sent a report to the Prime Minister on the import of electricity from China for the period of 2021-2025.

Specifically, in the period of 2021-2022, expanding the existing sales contract of electricity (expired in 2020) to continue to import through 220kV link lines, the electricity price terms remain the same as the current sales contract including formula for adjustment of annual electricity price.

In the period 2023-2025, increasing total import capacity in Lao Cai and Ha Giang to 2,000 MW with output of 7-9 billion kWh / year.

To gain this goal, Vietnam Electricity Group (EVN) has proposed to increase the import of Chinese electricity through 220kV switching stations in Lao Cai and Ha Giang and add grid projects.

For post-2025 period, EVN will continue to research and exchange with China Southern Power Grid company on the option of import at the 500kV voltage level in Lao Cai and report it to competent authorities for consideration and decision.

To date, EVN has negotiated with China Southern Power Grid Company about the joint solutions to enhance Chinese electricity imports. According to the report, EVN will expand the existing sales contract to increase electricity import to 3.6 billion kWh / year from 2021 with the electricity price unchanged as per the current contract.

Implementing links through back-to-back switching stations in Lao Cai and Ha Giang to increase Chinese electricity imports to approximately 9 billion kWh / year from 2023. With this option, China Southern Power Grid Company will invest two 220kV back-to-back stations with capacity of 1,000 MW / station near the border, and Vietnam will invest in some 220 kV power grid projects to increase reception capacity.

Partly solve power shortage

The Electricity and Renewable Energy Department stated that the solution of importing Chinese electricity can be implemented immediately to increase capacity and power output from 2021, partly solving the shortage of electricity in the future.

In terms of price, the purchasing price of Chinese electricity is more competitive than the purchasing price bracket from Laos and lower than the average price of existing coal-fired power plants (over 7 cents / kWh).

Specifically, the imported electricity price is 6.86 cents / kWh, corresponding to the exchange rate of US$ 1 = 6.5342 Yuan, which will be adjusted according to the exchange rate between US$ and Yuan every year.

Regarding the import of electricity from Laos, EVN has negotiated and signed a memorandum of understanding with some investors of projects in Laos to sell electricity to Vietnam.

However, some power projects in Laos cannot be implemented, so the negotiations were suspended. These are Xe Kong 2 thermal power project (900 MW) and Kham Muon thermal power (1,800 MW). EVN has researched Xe Kong 1 thermal power project and reported to the Ministry of Industry and Trade on the imports and connection.

Currently, EVN is working with investors to study the import of electricity from Laos.

Specifically, the Prime Minister has approved and supplemented with the planning of associated power grid projects for Nam Sum 256 MV hydro-power plant cluster. EVN is working with investors on electricity prices because the price offered by the investors is higher than the electricity purchasing price bracket approved by the Prime Minister.

For Nam Kong 280 MW hydropower plant cluster, Nam E-Moun 129 MW, EVN has reported to the Ministry of Industry and Trade on the import of electricity and connection to Vietnam.

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

However, investors of Xekaman 1 and 3 hydropower projects do not approve the connection to existing 220kV link lines. Therefore, EVN has coordinated with the investor to propose a new connection option and submit it to the Ministry of Industry and Trade.