Mekong Utility Watch

Vietnam will suffer electricity shortages until monopoly removed, says energy industry leader

Vietnam Net Bridge
March 20, 2008

“We need to create a real electricity market and remove the monopoly,” Vietnam Energy Association Chairman, Tran Viet Ngai, said earlier this year in response to the country’s chronic power shortages. “The biggest problem right now is Electricity of Vietnam controls all the generation, distribution and investment.”

 

The electricity price increase plan will only help reduce losses for the Electricity of Vietnam (EVN), while it will not help improve the electricity shortage. Vietnam will still lack electricity as the monopoly still exists.

Tran Viet Ngai, Chairman of the Vietnam Energy Association, talked about the electricity investment projects and the electricity price increase plan.

 

EVN has asked the government to approve the electricity price increase plan. Will the plan help settle the electricity shortage?

 

In the years before 2000, Vietnam lacked 500-600MW a year. Since 2007, Vietnam has been lacking 800-1,000MW a year.

It is estimated that from 2008, EVN has to add an additional 1,500-2,000MW a year to its electricity generating system. In order to have 1,000 MW, EVN will have to spend VND20tril a year if it invests in coal-run power plants, and VND16-17,000tril a year if it builds hydropower plants. Therefore, in order to have 2,000 MW, EVN will need VND40tril. The electricity price increase will help EVN arrange enough money for its investment projects.

However, the electricity price increase plan will only help EVN reduce losses, it cannot help settle the electricity shortage.

I advocate the plan to raise the electricity price. However, EVN and the government need to consider thoroughly when to raise the price and how much to increase it.

The government has said that the electricity price increase should not be discussed at this sensitive moment. I personally think that the government should not approve the plan to increase the electricity price at this moment, it would be like throwing oil onto a fire.

What do you think Vietnam needs to do to resolve the electricity shortage?

We need to create a real electricity market and remove the monopoly.

In order to do that, we need more and more investors in electricity projects.

The biggest problem now is that EVN undertakes all the work related to electricity generation, distribution and investment.

EVN remains the only electricity wholesale buyer, which then retails electricity to consumers. It is necessary to have more and more electricity distributors, which would enable consumers to have more choices and buy electricity from those who provided good-quality products and at reasonable prices.

Have a lot of investors been injecting money in power generating projects?

PetroVietnam, Vinacomin, Song Da Corporation have invested in 50 hydropower plants. However, they all have to sell electricity to EVN, they cannot sell directly to consumers.

Our association is also planning to call for investment in a complex of thermo power plants which have the total capacity of 3,000 MW.

You may know that recently, EVN had to cut electricity in many areas. Do you think that EVN cuts electricity in order to reduce losses? Are EVN’s expense and financial reports lacking transparency?

EVN does not have a provision electricity sources. Therefore, the electricity shortage occurs when a generating source has trouble. I can say that EVN has cut electricity to reduce losses. Financial reports of EVN are audited every two years.

(Source: Tien phong)

 

 

 

 

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