LNG Thi Vai Storage in the southern province of Ba Ria-Vung Tau is the country's only LNG complex. (Photo: VNA)Under PDP8, the estimated capital requirement for the developmentof power sources and transmission grids was estimated at nearly 135 billion USD.Of which, 119.8 billion USD was allocated to power sources, averaging 12billion USD per year, and 14.9 billion USD to transmission grids, averaging 1.5billion USD per year.
For the 2031-50 period, the estimated capital requirement for thedevelopment of power sources and transmission grids ranges from 399.2 billionUSD to 532.1 billion USD. Of which, 364.4 billion USD to 511.2 billion USD wereallocated to power sources, averaging 18.2 billion USD to 24.2 billion USD peryear, 34.8 billion USD to 38.6 billion USD to the transmission grid, averaging 1.7billion USD to 1.9 billion USD per year.
Given the substantial amount of capital requirement of the plan,MPI stressed the importance of participation from all economic players, as wellas the diversification of funding sources, including foreign partners as a keycomponent to the plan's success.
"Securing the necessary financial sources remains achallenging issue, which may pose various obstacles to the successfulimplementation of the country's power plan," said MPI in a publicstatement.
Besides relying on state-owned enterprises to carry out numerousprojects under PDP8, MPI advised the government to seek out and encourageprivate investors to participate in the plan.
As of now, there was not yet a working mechanism for encouragingand selecting private investors in the power sector, which may help ensurePDP8's smooth progress.
"We have observed instances in which projects experiencedprolonged delays, even in the investment phase; instances in which projectswere approved and assigned but not yet implemented or were being carried out atan extremely slow pace. There were even instances in which capacity forimplementation was not met but projects were not revoked," said MPI.
While waiting for the completion of PDP8's first phase, Vietnamhas been actively looking for alternative energy sources including liquefiednatural gas (LNG). The power-hungry Southeast Asian economy, now established asa major manufacturing hub in the Asia-Pacfic region, received its first LNGshipment last month.
Under PDP8, the country aims to generate an equivalent of 20GW of electricityfrom LNG by 2030, starting from zero. This figure is approximately 15% of the country's total electricity output, providing power to 20 millionhouseholds and helping to alleviate the load on the national electricitysystem.
However, numerous hurdles will likely hamper the country's ability to ensurethe supply of LNG at a reasonable cost, according to industry experts,especially as the country is making its moves to transition away from coal.
The global LNG market has witnessed increased delays and uncertainties insecuring long-term LNG supplies. Meanwhile, Vietnam will have to compete withbuyers from China, South and Southeast Asia, who have managed to ink a numberof long-term deals this year.
Without a long-term contract, the country will likely experience volatile spotprices, which have been recorded to skyrocket to 70 USD per British thermalunit (mmBtu) last year before stabilising at the current 12 USD per mmBtu.
Meanwhile, there are in-house problems that must be worked out bypower suppliers and Electricity Vietnam (EVN) regarding supply contracts andpricing as wind and solar power investors continued to voice their grievancesover difficulties in price negotiations and extending project deadlines withthe Power Trading Company (EVNEPTC) a subsidiary of EVN.
Experts have warned current disagreement over pricing could slowdown the sector's development while leaving a significant portion of the country'spower capacity stranded./.
VNA
