The investor of the 600MW Cong Thanh coal-fired power project in Nghi Son Economic Zone (EZ), listed in the eighth national power development plan (Plan 8), now wants to develop a 1,500MW LNG-fired power project as it has been difficult to raise funds for ‘dirty energy’ now.

The Thanh Hoa People’s Committee has reported to Deputy Prime Minister Tran Hong Ha about the case, asking for approval on changing the coal-fired power project into an LNG-fired project.

The project got an investment registration certificate from the Nghi Son EZ and Thanh Hoa’s Industrial Zone (IZ) Management Board for the first time in 2010, and then the certificate with amendments for the second time in 2018.

Since then, the investor has found it very difficult to access capital for the project development, because the investment in coal-fired power is no longer encouraged now and credit institutions tend to turn their back to such projects. 

Therefore, provincial authorities have proposed that the government agree on developing Cong Thanh LNG-fired power instead of Cong Thanh coal-fired power project. The project, if approved, will use imported LNG, with the capacity of 1,500MW, and will be added to Plan 8.

The investor said the site clearance and ground filling for the main area of the plant have been completed, and 80 percent of infrastructure items for the port area have been developed.

Also, important procedures for the coal-fired project have been completed: local authorities have agreed on leasing land to the project; the environmental impact assessment report and basic design have been examined by competent agencies. The investor has also signed the PPA (power purchase agreement) with EVN.

If the project gets approval to be converted into an LNG-fired power plant, Cong Thanh will use imported NLG, consuming 1.2-1.5 million tons a year. The annual electricity output to be provided to the national grid will be 9 billion kwh instead of 3.9 billion, while the total investment capital for the project will be $2 billion instead of $1.2 billion.

The investor of Cong Thanh said using LNG is a growing trend in the world, so the arrangement of capital to convert from coal-fired to LNG-fired has been completed after making a deposit with the consortium of investors, including BP Group which will provide gas to the project, GE Group, which provides equipment and Actis investment fund, in charge of financial arrangement. 

According to Thanh Hoa authorities, there are many favorable conditions to develop the project, which is expected to become operational prior to 2030. 

Gas-fired power on priority

Plan 8 approved by Prime Minister in May 2023 says that Vietnam would have 37,330MW of gas-fired electricity by 2030, amounting to 25.7 percent, the highest proportion of total capacity of electricity sources. Of this, domestic gas-fired thermopower would be 14,930MW (9.9 percent) and LNG-fired thermopower 22,400MW, or 14.9 percent.

The plan sets a roadmap for gradual reduction of coal-fired power, striving to eliminate coal-fired power within 20 years (2030-2050) and replace coal-fired power with clean energy sources, especially wind and gas-fired power.

Not only Cong Thanh, many other investors intending to develop coal-fired power projects are also considering replacing registered coal-fired power projects with gas-fired projects. Quang Trach 2 Project developed by Electricity of Vietnam (EVN) is an example.

Ngo Duc Lam, former deputy head of the Energy Institute, applauded the shift from coal-fired to LNG-fired power project, saying this is a reasonable decision. Particularly, in the case of Cong Thanh, Lam emphasized the other advantages of the project: it is located near the north, which is seriously lacking electricity, while the transmission will be easier thanks to existing transmission lines. 

“Many coal- and gas-fired thermopower plants are located in the southern and central regions, and it is difficult to transmit electricity to the north, which means that more investments are needed to develop transmission network. This is the biggest problem now,” Lam explained.

A report of PetroVietnam pointed that LNG-fired power projects have great advantages over other types of power plants: they generate electricity continuously, not depending on weather conditions; they have large capacity with a wide range of adjustment; and they help minimize greenhouse gas emissions.

PetroVietnam stressed that the use of LNG for running power plants will also be commensurate with the government of Vietnam’s commitments at COP26 on reducing emissions to zero percent and a growing tendency in the world of using low-emission fuels.

Luong Bang