Experts call for allowing private capital in power grid construction

With power transmission lines and sub-stations getting overloaded in some provinces, authorities and experts have urged the Government to allow renewable energy investors to install transmission systems and transfer them to EVN for operation.

Power transmission systems in some localities are overloaded after a number of renewable energy projects linked up. Experts have called on the Government to allow private investors to instal transmission systems


Transmission lines, especially in Ninh Thuan and BinhThuan provinces, have become overloaded after several renewable power plantswent online. Ninh Thuan wants the Government to allow them tobuild transmission infrastructure.

Many experts agreed with this, saying besidesadjusting zoning plans for renewable energy, the Government should create amechanism for private investment in transmission systems.

Assoc Prof Dr Bui Quang Tuan, Director of the VietnamInstitute of Economics, said this would address the lack of capital.

Phuong Hoang Kim, Director of the Ministry ofIndustry and Trade’s Electricity and Renewable Energy Authority,told Nguoi Lao Dong (The Labourer) newspaper that with huge sumsneeded for electricity development and the Government no longer guaranteeingloans for power projects, the private sector should be allowed to invest insome stages.

The Electricity Law stipulates a Governmentmonopoly in transmission, meaning the Government installs, manages and operatestransmission systems, he said.

Therefore, the private sector is not allowed to doso. "Even if enterprises ... build transmission lines and hand overat zero VND, the electricity industry has no mechanism to receive theseassets," he said.

The law also stipulates transmission costs shouldbe less than 100 VND/KWh and subsidised by the Government to keep electricityprices under control.

If the private sector invests in transmission, itwould determine the price, which cannot be as cheap as State-regulated rates,but it is not easy to sharply raise electricity prices since they are fixed bythe State, he explained.

From the perspective of energy security, Prof DrTran Dinh Long, Vice Chairman of the Vietnam Electrical EngineeringAssociation, said in many countries power transmission remains a monopoly ofthe Government because this is the "backbone" of the electricalsystem.

So, if Vietnam has a plan to allow the privatesector into power transmission, there should be a thorough discussion in theNational Assembly before laws are amended, he said.

Transmission lines of 220KV and above shouldremain a Government preserve, he said.

Transmission lines of 110KV and less and linesfrom power projects far from existing transmission lines could be opened to theprivate sector, he said.

In addition to quickly building transmission linesin areas where they are overloaded, the electricity sector also needs tobalance transmission from various sources, he said.

For instance, from 8am to 4pm it is preferable forsolar plants to transmit power to the grid.

According to EVN, as of the end of June thecountry had 89 solar power plants with a total capacity of 4,543 MW, far inexcess of the 850 MW by 2020 envisaged in the power plan.-VNS/VNA

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