IPPs and Foreign Project Investment to Feature in Vietnam's 15,000 MW, $78 Billion Power Plan Through 2020

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Researched by Industrialinfo.com (Industrial Information Resources Incorporated; Houston, Texas). The Vietnamese government and EVN (Electricity of Vietnam), the state's power utility, continue to re-state and reinforce the development of new power targets for the country.

Deputy Prime Minister Nguyen Tan Dung announced in the National Assembly that with power demand rising by six to seven billion kWh per annum (up to 16%) construction on ten new power plants would begin in the six months to the end of 2005. The 2,400 MW Son La hydropower scheme would be the largest of the projects, and preparations were progressing with the relocation of the population that would be displaced by the hydro project dam. This plant should be at full operational capacity by 2015.

With Vietnam's current total electricity generation capacity claimed to be 11,400 MW, and keeping pace with targets set in previous years, the country is embarking on a plan to build a total of 74 new power plants, with a combined capacity of 15,000 MW. Projects developed by EVN will provide 77% of the total capacity. In the years from 2002 to 2020 about $78.5 billion will be invested in the energy sector to construct power plants fuelled by coal, oil and gas, and hydropower, plus over $2 billion per annum to develop the national power grid. In the past ten years, EVN has invested over $14 billion in the power sector from its own sources.

Through 2010, 2,326 kilometers of transmission lines and fifteen transformer stations will be constructed, with a total capacity of 8,550 MVA to serve the 500 KV grid. For the 220 KV grid, 5,064 kilometers of lines and 55 transformer stations will be established.

Independent Power Projects (IPPs) could play a role in over 50% of the total projects, as EVN said that even if it could raise half the $1.5 to $2 billion investment required per annum it would still have to raise more domestic and foreign loans. EVN has called for foreign enterprises to engage more actively in IPPs. The IPPs are also being offered greater opportunities to invest in the establishment of electricity distribution networks and the production of electro- mechanical equipment, the Vietnam Chamber of Commerce reports.

To balance over-dependence on hydropower (currently about 60%), Vietnam is intensifying in the exploration and exploitation of oil fields to supply gas-fired power stations in the south of the country, with a gas feed to generate 7,000 MW of power in 2010 and 11,000 to 14,000 MW in 2020

Coal-fired plants are expected to have a combined capacity of 4,200 MW in 2010 and 9,000 to 10,000 MW in 2020, with a feed of ten million tons of coal in 2010 and twenty to thirty million tons in 2030. The Vietnam Coal Corporation is seeking foreign investment of over $750 million, to go toward the total cost of over $1 billion to construct seven coal-fired power plants, with a total capacity of 1,232 MW by 2010. For related news item see – April 11, 2005 – Hai Phong 600 Megawatt Thermal Power Station Leads Vietnam's Coal Input to $14 Billion Power Expansion.

The Vietnam Atomic Energy Commission is planning to inaugurate a 2,000 MW nuclear power plant between 2015 and 2020 and will replace the small training and research reactor in Lam Dong.

With a market-oriented model now being put in place for a competitive electricity market, the Vietnam power scene has been brought into shape for foreign project investment. But even if the new power generation targets are met, or even exceeded, it is estimated that the country will still be importing 25% to 27% of its power to satisfy domestic demand from Laos, China, and Cambodia in 2020, and 57% to 62% by 2050. The latter figure excludes the effect of nuclear power projects coming into the power scenario.

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