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Viet Nam is currently able to generate around 100 billion kWh of power per year.
According to the plan, 3 per cent out of the 330 billion kWh will be imported. The remaining 97 per cent will comprise 19.6 per cent hydropower, 46.8 per cent thermal power, 24 per cent gas generated power, 4.5 per cent renewable energy, and 2.1 per cent nuclear power.
Nearly 67 per cent of investments will be directed towards power generation sources while 34 per cent will go to the power grid.
Ministry figures have shown that, during the first half of this year, over VND3.5 trillion (US$171 million) was lost due to current low power prices.
"EVN has a VND10 trillion ($488 million) debt with the Viet Nam Coal and Mine Group (Vinacomin) and PetroVietnam.
In addition, the company lost more than VND8 trillion ($390 million) last year," Vuong said.
The deputy minister confirmed that this has been the first time that power prices have been mentioned in the plan and that the Government has encouraged private sector investment in the industry.
Electricity prices are set to be increased by 40 per cent with two to three cents per kWh added until 2020 to ensure enough capital reaches the power sector, he said.
"While there are several solutions to mobilising investments, including issuing Government bonds, developing groups and calling on foreign investment, adjusting electricity tariffs to make up for investment costs is the most important," Vuong added.
Accordingly, the Prime Minister has allowed Electricity of Viet Nam (EVN) to adjust electricity prices within five per cent, creating a flexible mechanism for industry development.
Investors have been actively investing in small hydropower plants, expecting large profits at investments of around $10 million per project.
"Some plants need reviewing, providing only small amounts of power at great cost and to the detriment of the environment," Vuong said, adding that power projects required several billions of dollars for proper infrastructure development.
EVN, Vinacomin and PetroVietnam have all played important roles in developing power resources to help build a competitive energy market.
The new plan, set to help supply all rural families with electricity by 2020, also targets putting Viet Nam's first nuclear power plant, producing a total of 10,700MW (equivalent to 10 per cent of the country's total output) into operation in the same year.
EVN looks for ODA funds
Electricity of Viet Nam wants the Government to give it ODA funds to build 39 power plants with a combined capacity of 27,000MW by 2015 as envisaged in the national electricity development plan. The monopoly State supplier said it needs VND552.9 trillion (US$27 billion) in all and VND90 trillion ($4.3 billion) a year but can't raise the money on its own.
Many major projects, such as the Lai Chau hydroelectricity plant and the Vinh Tan and Duyen Hai thermal plants, faced a cash crunch, deputy director Dinh Quang Tri said.
Nguyen Hong Ha, head of the Lai Chau and Son La hydroelectricity plants, said another VND2 trillion ($97 million) was needed this year to complete work on the Lai Chau hydroelectricity plant. EVN has only been able to raise VND400 billion ($19.3 million) this year. Tri said the company only had enough money now to service its debts.
But borrowing from banks was also difficult because power projects needed very large loans running into billions of dollars, well in excess of the capacity of domestic finance and credit organisations, he said.
Moreover, with power projects having gestation periods of at least two or three years, lenders were reluctant, he added.
Some analysts said EVN should diversify its credit sources by borrowing from the World Bank, Asian Development Bank, and other countries.
Of the 26 plants scheduled to be built, work has already begun on 18.
EVN also needs to build 44 transmission networks with a capacity of 500 kV and 212 with a capacity of 220 kV.
Source: VNS
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