LookAtVietnam Bridge – While the electricity shortage has become serious and people and businesses are struggling with the power cuts everyday, there is a power plant that cannot sell electricity to EVN

PetroVietnam: EVN lacks electricity but does not buy electricity

The electricity shortage has become serious and people and businesses are struggling with the power cuts everyday

The Vietnam National Oil and Gas Group (PetroVietnam), the investor of Ca Mau 1 and Ca Mau 2 power plants, said that EVN has refused to buy all the electricity output of Ca Mau thermopower plant.

Phung Dinh Thuc, General Director of PetroVietnam, in charge of the gas industry, said that the gas supply for Ca Mau plant is enough to produce 720MW a day. However, EVN purchases only  450MW a day in May 2008.

Tran Ngoc Canh, General Director of PetroVietnam, said that EVN keeps buying electricity from China, even with the price higher than the price offered by Ca Mau 1. However, Canh declined to give concrete figures.

EVN: China-sourced electricity cheaper

Meanwhile, EVN affirmed that China-sourced electricity is cheaper than PetroVietnam’s electricity.

The average price at which EVN is purchasing electricity from China is 4.5 UScent /kwh. If counting on the transmission, management fee and the loss during the transmission, the electricity has the production cost of VND1,100/kwh. Meanwhile, the purchase price from Ca Mau 1 plant, according to Pham Manh Hung, Deputy General Director of EVN, was UScent7/kwh in January 2008, and UScent8 in February 2008, while EVN sells electricity at UScent5/kwh on average.  As such, EVN has every reason to purchase electricity from China instead of PetroVietnam.

EVN said that it plans to buy 3.5bil kwh in 2008, an increase of 31% over 2007. In 2007, EVN purchased 2.67bil kwh from Yunan province.

Plant has excess electricity, people still lack electricity

However, a question has still been raised that if EVN only cares for its interests, while ignoring the interest of people. May is in the peak dry season month, when the electricity shortage is most serious in a year, while EVN still refuses to purchase electricity from some power plants.

According to EVN, in the dry season months, from January 1, to May 31, 2008, the demand will reach 31,7bil kwh, up by 4,8bil kwh over the same period of 2007. The situation proves to be more serious in the north due to the increasingly high additional demand, expected to reach 83mil kwh a day in May (up by 17.57%).

In order to deal with the electricity shortage, EVN plans to buy electricity from Ca Mau 1 (750 MW), Ca Mau 2 (750 MW), and Nhon Trach 1 power plants. Besides, EVN will also buy from Chinese plants and new EVN’s sources, including expanded Uong Bi 1 and Tuyen Quang.

However, it is now clear that Ca Mau 2, Tuyen Quang Hydropower and Nhon Trach Thermopower have been slow in implementation, while the expanded Uong Bi plant is still in the period of trial electricity generation, which has not run at the designed capacity yet. Ca Mau 1 is now running at nearly full capacity, but EVN does not purchase all the electricity it can provide.

People guess that EVN does not want to buy electricity from Ca Mau 1, because it would rather have a serious electricity shortage than suffering loss. As the electricity price offered by Ca Mau 1 is higher than EVN’s sources, the more EVN purchases, the bigger losses it will suffer.

It is now the dry season, when the water level of water reservoir is low, and EVN “grants privilege” to Ca Mau 1 by buying electricity from the plant. However, the situation will be different in two months, when the rainy season begins. EVN will run its hydropower plants and reduce the electricity volume it will purchase from non-EVN sources. If so, Ca Mau 1 may be unable to sell any MW to EVN.

Tran Thuy