Coal shortage could sap Vietnam’s energy

By Anh Minh, Dat Nguyen   November 28, 2018 | 12:32 am PT
Coal shortage could sap Vietnam’s energy
Workers pick out gravel from coal at a coal port in Hanoi. Photo by Reuters/Kham
A serious coal shortage is threatening Vietnam’s power production plans even as the nation’s demand for energy rises.

Le Duy Hanh, chairman of the Quang Ninh Thermal Power Company (TPC Quang Ninh), said they have shut down two out of four turbines since November 17 due to a lack of coal.

He told VnExpress that the state coal mining group Vinacomin has supplied 2.6 million tons of coal to his plant this year, but another 145,000-200,000 tons are needed to run all four turbines.

Hanh said the shutdown of two turbines has resulted in a loss of 10 million kilowatt hours per day, or VND13 billion ($555,685). This is the first time that the plant has not had enough coal for electricity production.

"We have reported this to Vietnam Electricty (EVN) and are working with Vinacomin to solve the problem. Vinacomin is also looking for other coal sources, but is yet to find any," he said.

Vietnam only allows two major producers to supply coal to power plants: Vinacomin and the North-Eastern Company (NECO) under the Ministry of Defense. Currently, these producers are not providing enough coal for plants to operate.

Nguyen Thuong Quang, CEO of the Hai Phong Thermal Power Company (TPC Hai Phong), said that the two producers have only provided 2 million tons of coal to his plant so far this year, while the firm needs 3.4 million tons.

"The plant needs about 12,000 tons of coal per day, but the producers are sending only 2,000-3,000 tons," Quang told local media, adding that his plant’s turbines might have to be shut down in the next four or five days should the current situation continue.

The Ninh Binh Thermal Power Company is facing the same problem. Its CEO Trinh Van Doan said that they were operating at 75 percent capacity.

The plant needs 300,000 tons of coal this year, and it has so far has received 260,000 tons. As its inventory is running low, Doan is concerned that the plant won’t have enough coal if it needs to operate full capacity.

National power utility EVN said in a recent statement that serious coal deprivation is happening at multiple plants in northern localities like Quang Ninh Province and Hai Phong City.

Vinacomin and NECO have promised to provide enough coal for plants this year, but the amount provided until this month is lower than actual consumption.

The power distributor has asked the government for permission to seek other sources of coal locally and to import from other countries.

‘Grave consequences’

For the 2017-2020 period, Vietnam needs an estimated 40 million tons of coal for its thermal power stations, and this figure will go up to 50-55 million tons in the 2021-2030 period, Vinacomin chairman Le Minh Chuan said at a forum in October.

However, Vinacomin and NECO can only produce 40-41 million tons of coal a year, Chuan said, adding that the two producers won’t be able to provide the extra 10-15 million tons that the country will need in coming years.

Existing power plants will therefore lack coal and the national grid could be seriously affected as a result, Chuan said. Thermal energy is expected to account for over 48 percent of the country’s power production next year.

Coal, despite its harmful environmental impacts, is still the dominant power source for Vietnam. Under the revised Power Development Plan VII, by 2030 about 53 percent of the country’s power will come from coal.

Vietnam, one of Asia’s fastest-growing economies, has been struggling to develop its energy industry due to a lack of state fund.

The country’s hydropower potential has already been exploited almost fully, oil and gas reserves are running low, and Vietnam recently went from being a net exporter to a net importer of coal.

At a forum on Monday, World Bank country director for Vietnam Ousmane Dione told government officials and energy partners that Vietnam will need to raise up $150 billion by 2030 to develop its energy sector.

Dione added that electricity demand in the country will grow by about 8 percent a year for the next decade, Reuters reported.

The World Bank official proposed that Vietnam allow the domestic and private sector to play a "more prominent role in power sector financing" to raise funds outside its state budget.

He added that Vietnam needs to increase its renewable energy usage and introduce a competitive power market so that higher electricity prices can attract private investment in energy.

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