Power utility mobilizes oil-fired electricty as water supply falls

By Dat Nguyen, Dat NguyenOctober 25, 2019 | 06:00 pm PT
Power utility mobilizes oil-fired electricty as water supply falls
A worker fixes electrical cables in Ho Chi Minh City. Photo by VnExpress/Thanh Nguyen.
National power utility Vietnam Electricity (EVN) has been mobilizing highly expensive oil-powered plants as low water levels have constrained production at hydropower plants.

In the first 20 days this month, EVN had to produce 178 kWh of electricity from oil-fuelled plants, which costs 2.5-3 times more than water and coal, it said in a recent release.

Dry weather in recent months has resulted in major lakes in the north and central region recording their lowest water levels in years.

As of this month, 26 hydropower reservoirs of EVN contained about 19.67 billion cubic meters of water, a drop of 28 percent year-on-year, equivalent to a loss of 2 billion kWh.

In the first nine months, hydropower production fell 18.3 percent year-on-year, and coal-fired power plants had to run at full capacity to make up.

The national power utility has forecast there will be challenges in electricity production for the rest of the year because of lower water, coal and gas supply, and higher costs from oil-fired plants.

"Oil is expected to be highly utilized in the last three months of the year, which will be a big financial challenge for the corporation."

A kWh of oil power costs up to VND6,000 (26 cents, excluding distribution and transmission fees) to produce, but it is sold for just VND1,844.64 (7.9 cents), a loss of VND4,155 (18 cents).

This is the second time in the last three months that EVN has to mobilize oil-fired power plants to supply increasing demand.

Vietnam’s rapid growing economy is posing greater risks of power shortage. The Ministry of Industry and Trade said in July that the shortage is estimated at 6.6 billion kWh in 2021, nearly 10 billion kWh in 2022 and 15 billion kWh in 2023.

The country might need to import 3.6 billion kWh in 2021 and 9 billion kWh in 2023 from Laos and China to meet domestic demand, it added.

The World Bank has estimated that Vietnam needs $150 billion for energy sector development by 2030, as electricity demand is set to grow by 8 percent a year for the next decade.

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