POWER April 2016 - 8

Vietnam Reconsiders New
Coal-Fired Power Plants
Vietnam, which has long been a coal exporter,
is considering a hiatus in licensing
new coal-fired power plants because it says
domestic coal reserves won't be enough to
feed generators starting in 2020.
Prime Minister Nguyen Tan Dung in early
February told the Ministry of Industry
and Trade to submit proposed revisions to
its latest master plan. The revisions should
reconsider the country's lofty coal power
ambitions and reflect recent commitments
to cut greenhouse gas (GHG) emissions by
8% by 2030 compared to a business-asusual
scenario, he said.
About 28% of Vietnam's total installed
power capacity of 33.9 GW in 2014 was
coal-based. The remainder came from hydropower
(40%), gas turbines (22%), diesel
and wind (5%), oil-based thermal (2%),
gas-based thermal (1%), and imported
sources (2%). The country's installed capacity
base has grown dramatically since
2005, when it was only 11.6 GW.
Socioeconomic development forecasts
released in August 2015 show that the
country expects power demand to soar
10.5% a year through 2020. Master Plan
VII calls for massive increases in capacity
that would see hydro's share reduced
to just 12% by 2030 and coal's share
increased to 60% to meet this demand.
The new power plants will need investments
of $21.4 billion through 2020,
and an additional $25.6 billion between
2021 and 2025.
But over the past year, officials have
shown less enthusiasm about coal's future.
The government has allotted 564 million
metric tons of coal for power generation
between 2015 and 2030, " which can only
be sufficient for the demand of the existing
plants, " said the Ministry of Industry
and Trade last year (Figure 1). Noting that
coal capacity in 2015 was about 6.7 GW
and another 7.6 GW of new installations
were in the pipeline, it underscored that
" coal production will not be sufficient for
the 2021-2030 period. "
The decision comes as government documents
reveal struggles by state-owned
coal producer Vinacomin to keep exports
steady while meeting domestic consumption.
Between 2011 and 2015, the company
has been stricken by plunging coal
prices and consumption. Meanwhile, taxes
and fees have raised production costs. The
company has been importing coal from
Indonesia since 2011, and it said imports
1. Short on fuel. Vietnam is reconsidering an energy policy that would make it highly dependent
on coal power because the nation's domestic production of coal is dwindling. Projects
like the state-run utility EVN's Duyen Hai 3 plant, a three-unit plant with a total capacity of 1,245
MW that is under construction in Duyen Hai district, may need to rely on imported coal. Courtesy:
EVN
would gradually increase from about 3
million metric tons in 2016 to 20 million
metric tons by 2020. Domestic production
will stall at 42 million metric tons in
2020, it said.
Coal production isn't the power sector's
only development challenge. The Asian
Development Bank (ADB) highlighted in a
December 2015 study of Vietnam's energy
sector that the country's power sector
" still needs to continue the reforms process,
which is in the most crucial stage,
and reach cost-reflective tariffs. "
How the country will bag the investments
it needs is also unresolved, the
ADB said. Although private sector investors
are gradually being attracted
to power generation, the " environment
is not conducive for private sector investments
in the expansion of power
transmission and distribution networks.
Hence, the [National Power Transmission
Corp. (NPT)] and power corporations remain
solely responsible for meeting investment
requirements either using their
own resources or borrowing from export
credit agencies, multilateral and bilateral
banks, and commercial banks. "
And, even though it has vastly improved
its technical capacity over the
past two decades, the country continues
to grapple with debilitating skills gaps.
" EVN and its subsidiaries have a huge
workforce, but most of them are semiskilled
and there is a dearth of skilled
managerial staff, " the ADB pointed out.
" The NPT and the five power corporations
being fairly new entities, human resource
capacity in the key operational areas of
corporate strategic business planning,
accounting, financial management, and
system planning need to be strengthened,
and appropriate processes and procedures
need to be further developed for
efficient and effective operation. "
Vattenfall Completes
World's First
Decommissioning of an
Offshore Wind Farm
Vattenfall has dismantled five offshore
wind turbines-with a total capacity of
10 MW-at the Yttre Stengrund wind farm
in Kalmar Sound, Sweden. The monthlong
decommissioning project was the
first in the world for an offshore wind
farm, but more projects will soon follow
as early turbines reach the end of their
8
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POWER April 2016

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