Power production costs remains problem for Vietnam to solve

Power production costs remains problem for Vietnam to solve

Former US Secretary of State John Kerry has suggested an optimal solution to
ensure power supply for Vietnam's economic development.

The survey conducted by Kerry and Fulbright University in Vietnam and
General Electric Vietnam (GE Vietnam) found that the rapid decline in
renewable energy prices, the capability of accessing capital for green
works, and the agreement on voluntary cutting of power consumption between
clients and suppliers will be effective solutions to replace coal.

The World Bank in 2016 estimated that Vietnam would need 320 billion kwh by
2020 and 690 billion kwh by 2030, which means a growth rate of 16 percent
per annum in 2015-2020 and 8 percent per annum until 2030.

Vietnam has been advised to create a power strategy by reconsidering
electricity demand to choose suitable sources of energy by 2025.

The World Bank in 2016 estimated that Vietnam would need 320 billion kwh by
2020 and 690 billion kwh by 2030, which means a growth rate of 16 percent
per annum in 2015-2020 and 8 percent per annum until 2030.
When comparing the efficiency of coal-fired and gas-fired plants or
renewable energy programs, it is necessary to consider the moments for plant
operation.

If investors begin programming the building of a coal-fired plant in 2017
and construction starts in 2018, they would able to put the plant into
operation by 2023. Meanwhile, it only takes one year to put a solar power
plant into operation.

It is also necessary to consider the environment tax when running thermal
power plants. Experts believed that a reasonable tax was $31 for every ton
of CO2 to be emitted in 2010, and $35 now. If the tax rate is applied, coal
producers in Vietnam would have to pay $4.2 billion in 2016 and $10.5
billion prior to 2025.

If so, the production cost of coal-fired plants would be 4.6 cent per kwh
higher.

This means that the electricity from renewable sources will have more
competitive production costs, if the expenses on carbon emissions and
pollution treatment are taken into account.

With its economic development plans, Vietnam has to increase the electricity
supply from coal-fired thermal power plants as the hydropower resources are
in decline and Vietnam has canceled a plan to build nuclear power plants.

There are concerns that the coal import would increase influences to the
payment balance.

Meanwhile, if only Chinese banks lend money to thermal power plants, this
means that Vietnam would increase its reliance on imports from China, and
that Vietnam would find it difficult to fulfill its commitments on emission
reductions.

New thermal power plants are facing strong opposition from people because
they produce dust, ash, mercury and acid that poison the air and water.

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Link to Original Article:
http://english.vietnamnet.vn/fms/science-it/182237/power-production-costs-re
mains-problem-for-vietnam-to-solve.html

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com