Electricity of Vietnam Likely to Begin Operations of Nghi Son-1 Power Project by End of 2013

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Researched by Industrial Info Resources (Sugar Land, Texas)--Vietnam's state-controlled energy utility, Electricity of Vietnam (EVN) (Hanoi, Vietnam) began construction on its 600-megawatt (MW) Nghi Son-1 thermal power project in July this year. Sources indicate that the power plant will begin operations by the end of 2013. Timely completion of the power project, which is in the Thanh Hoa province, is critical to meet the growing electricity demand of the Nghi Son economic zone. When completed in 2013, the power plant will annually generate nearly 3.6 billion kilowatt-hours (kWh) of electricity. The project already has been allocated an area of 2,350 hectares. The Vietnamese government also has directed the Ministry of Industry and Trade to expedite procedures and clearances for the 1,200-MW Nghi Son-2 thermal power plant, which is to be at the same site.

The Nghi Son-1 power plant will be built with 85% financial aid from Japan's Official Development Assistance program. The funding has been provided by the Japan International Cooperation Agency (Tokyo, Japan). The power projects are part of the country's national power development scheme for 2006-15. In June, EVN awarded the $981 million engineering, procurement and construction (EPC) contract for the Nghi Son-1 power plant to Marubeni Corporation (TYO:8002) (Tokyo). Recently, the Global Power Group (Clinton, New Jersey), a subsidiary of Foster Wheeler Limited (NASDAQ:FWLT), secured a contract for two units of 300-MW pulverized, coal-steam generator packages and other allied equipment for the Nghi Son-1 project. The first and second generator units will be commissioned during the fourth quarter of 2013 and second quarter of 2014, respectively.

The power plant will use boilers that will be fired by anthracite coal and flue-gas desulfurization equipment, which will make the thermal power project environmentally friendly and reduce the facility's carbon footprint. The 1.6 million-ton-per-year coal feed will be supplied from mines in the Quang Ninh province. The Nghi Son-1 power plant is among the biggest large-scale projects constructed by EVN in Central Vietnam. The power from the plant will be connected to the national grid through a 220-kilovolt (kV), double-circuit transmission network.

Industry analysts have forecast that by 2013-14, surging power demand from industries will create a huge power deficit in the country. In 2011, government estimates indicate that power demand will grow 15%. Vietnam is relying on electricity purchases from China and Laos to tide over this crisis. Another setback to the country's power development program came after the economic committee indicated that most power projects slated for commissioning this fiscal year were delayed. Of the 51 power projects expected to begin operations in 2010-11, only five power plants were on schedule. Poor monsoons have put pressure on the country's hydroelectric energy production.

During 2006-10, EVN has invested nearly $10.66 billion on new projects. The company has successfully commissioned 21 power plants with a combined generating capacity of 6,280 MW. In 2010 alone, 10 new power plants with a combined capacity of 2,078 MW were commissioned. Presently, 15 projects with a total power generating capability of 10,581 MW are in various stages of construction. Of this, EVN began development of six projects with a total capacity of 5,356 MW and an investment of $9 billion. The company is also making investment preparation for 7,285 MW of new electricity generating facilities.

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