VietNamNet Bridge – Though small and medium size hydropower--considered as recyclable energy, has been encouraged to be developed by the state; investors always have to struggle hard to earn money.

Dang Van Hong, the owner of a small hydropower plant, has complained that the plant has been “pending for indefinite time”, because he still cannot obtain some necessary licenses, which means that the plant still cannot sell electricity and create money as he expects.

Kicked off some years ago, the project was warmly welcomed by the local authorities because it was a big project with the investment capital of hundreds of billions of dong.

However, though the construction has been completed, the plant has been operational smoothly on a trial basis, and though it is now the rainy season, when the water supply is profuse to run hydropower plants, the plant still cannot be put into operation.

In principle, the hydropower plant development program must be approved by the government. Vietnam would have 1097 hydropower plants with the total capacity of 24,000MW, accounting for 35 percent of the national electricity output, or 41 billion kwh.

Under the current regulations, small and medium hydropower plants (up to 30MW), must seek the permission from the Ministry of Natural Resources and the Environment for using surface water before it can generate power to the electricity grid.

The current laws stipulate that within 30 working days since the day of receiving lawful documents, state management agencies must give answers if to grant a license on using surface water, and clarify the reasons if the answer is “no.”

However, Hong said that following the procedures is really a miserable work. He had to go through the mill for the last year, but he still cannot obtain the license.

Meanwhile, Hong has been chased by the creditors – commercial banks. Hong also has to move heaven and earth to arrange money to run the plant.

According to Truong Dinh Lam, a businessman in Son La province, in order to be able to sell electricity, one must obtain a license from the Electricity Regulatory Agency. Meanwhile, in order to apply for the license, one has to submit the license on exploiting surface water from the Ministry of Natural Resources and the Environment.

All the power investors must have these kinds of documents to be able to sell electricity and get payment. The owners of the hydropower plants mostly live in mountainous areas, and they have to spend time to travel to Hanoi tens of times to get the licenses.

Lam said that since it is too costly to apply for licenses, some investors accept to pay 300 million dong to the brokers who provide package service of obtaining licenses.

According to the Ministry of Industry and Trade, Vietnam began buying electricity from China at 5.8 cent per kwh. However, the price has risen to 6.08 cent, or 1300 dong, since the beginning of the year.

Meanwhile, the Electricity of Vietnam only pays 800-900 dong for every kwh bought from domestic small and medium hydropower plants, 1280 dong from coal run thermopower and 5500-6000 dong from oil run power plants

As such, EVN pays the small and medium hydropower plants 400-500 dong per kwh lower than it pays to Chinese seller.

Small and medium hydropower plant investors have complained that they have been discouraged by the investments. While they have to sell electricity at low prices, they have to borrow money at high interest rates (15 percent per annum) and spend time and money to follow administrative procedures.

Phan The Hai