Vietnam’s Energy Plans Deemed Impractical

The master plans for coal, power and oil are impractical and have been developed in an illogical order, said Tran Viet Ngai, chairman of the Vietnam Energy Association (VEA). He was speaking at a forum themed “Energy and oil & gas: investment and sustainable development” held by VEA and the Ministry of Industry and Trade in Hanoi on Thursday.

Many power projects have failed to stick to the schedules drawn up in Power Master Plan VII, according to VEA. So far, only Son La Hydropower Plant has run ahead of schedule, and three other projects have been on schedule, namely Dong Nai 4 Hydropower Plant, Mao Khe Thermal Power Plant and Quang Ninh II Thermal Power Plant.

Many other major projects are obviously behind schedule, including Vung Ang 1 Thermal Power Plant, An Khanh 1 Thermal Power Plant and Song Tranh Hydropower Plant. Dozens of major projects run by Vietnam Electricity Group (EVN), Vietnam Oil and Gas Group (PVN), Vietnam National Coal and Mineral Industries Group (Vinacomin) and some BOT and IPP investors have shown signs of slow progress. They certainly could not start operations between now and 2015 as scheduled without drastic measures, said VEA.

The total power capacity of the nation is 27,000 MW, with an annual output of 100 billion kWh. Under the master plan, the total power output will reach 330 billion kWh in 2020 and 695-834 billion kWh in 2030, which is far from simple.

“Therefore, I deem Power Master Plan VII impractical,” said Ngai. The impracticality lies in the inconsistent, unreliable and unauthenticated figures and documents serving the master plan, the unsound investment profile and the lack of coordination among relevant agencies, he analyzed.

It is illogical that the power master plan was made first, and then came the plans for coal and gas, he said. For a viable power plan, coal and oil & gas should be planned first, he stated.

In 2011, Power Master Plan VII was introduced. Then, in 2012, the plan for the coal industry was drawn up. As for oil & gas, there is only a master plan for gas until 2015 which was approved in 2011. The coal industry is struggling since the open-cast mines in use are almost depleted and new mines will take years to have products. Therefore, the coal-fired thermal power plants under Power Master Plan VII are facing coal undersupply.

As per the plan, coal-fired thermal power plants will need 67.3 million tons of coal in 2020 and 171 million tons in 2030. It is forecast that from 2014 onwards, power generators will have to import coal.

Similarly, gas-fired power plants are having trouble with the gas pipeline Block B-O Mon.

Block B-O Mon was scheduled to start service in 2014. However, due to some problems in negotiations with foreign contractors on gas prices, not until 2016 will the pipeline be put into use.

This will affect the development of O Mon Power Center. In addition, Block B-O Mon cannot timely join Block PM3-Ca Mau to form the Mekong Delta gas network connected to the southeastern network to reduce gas production costs.