Power investors wait for approval of strategy

Foreign power investors need to wait until the prime minister approves Vietnam’s new power development strategy towards 2015 for information about future investment opportunities.

A senior official from the Ministry of Industry (MoI) said a project wish list would be issued when the strategy is published. MoI submitted the strategy proposal to the government for final approval in April this year. “In a bid to satisfy the nation’s rising power demand, the MoI has planned to open power projects with combined 10,000 MW of generation capacity, mainly located in the central and southern parts of Vietnam. Huge investment potential and advanced technology will be two requirements deciding eligible investors,” said an MoI source.

MoI also suggested that in cases where more than one foreign investor takes an interest in the same power plant, an open bidding competition should be undertaken. Bid winners should be firms which offer the best price to the nation’s current wholesale buyer, Electricity of Vietnam.

Under the government’s current pricing regulations, EVN’s reselling electricity price is set at an average of VND842 (5.26 cent) per kWh.

The investment wish list of projects in Vietnam’s power sector is said to be greatly anticipated by foreign firms who are studying cases to build thermal power plants across the nation. Interested organisations include Japan’s Sumitomo, J-Power and Sojitz, the UK’s BP, Taiwan’s Tae Kwang Vina Industrial, Singapore’s Boustead and China’s Southern Grid Corporation. More recently, France’s leading power firm EDF told Deputy Minister of Planning and Investment Cao Viet Sinh about its desire to build a large-scale thermal power plant in the south of Vietnam.

Luc Jacquet, vice president of EDF Southeast Asia Division, unveiled that EDF would soon select the final location of the proposed plant, which the company wanted to start in 2012. The location should be close to a deep seaport to facilitate the import of coal to fuel the new power plant.

“EDF has an ambitious plans to develop power plants of combined 10,000 megawatts within the next 10 years,” Jacquet said.

EDF is a co-investor alongside Japan’s Sumitomo and Vietnam’s Tepco in the $480 million gas-fuelled Phu My 2.2 power plant in the southern Ba Ria-Vung Tau province. The 720 megawatt plant, which is one of two foreign investment power projects in Vietnam, began operating two years ago. MPI deputy minister Cao Viet Sinh admitted that rapid development of power plants in Vietnam was vital because of a sharp increase in electricity demand.

There is a potentially serious power shortage during the country’s dry reason which is caused by the current generation mix where electricity production is highly dependent on hydropower generation.
Sinh said that Vietnam’s current power generation capacity is rated at 11,200 megawatt and the supply is set to double by 2010.

Source: VIR