VietNamNet Bridge – The Ministry of Industry and Trade (MOIT) plans to exclude 338 projects from the list of hydropower plant projects to be developed nationwide.

Do Duc Quan, Director of MOIT’s Hydropower Department, said the ministry has decided to propose the government to remove the projects after checking the power plant development program and the implementation of the projects. In fact, even if the government does not stop the projects, investors may still decide not to invest in the projects themselves, because this is no more a lucrative business field.

Quan affirmed that if the government approves the proposal to remove the 338 projects, or 1/3 of the programmed projects, this would in no way affect the power generation and supply to the national economy, because these are all small scale projects.

Economists have pointed out that Vietnam would have more losses than gains when developing small scaled hydropower plants, because the electricity output to be churned out is modest, while the plants would cause the environment pollution.

Meanwhile, the expenses on small scale plants would be very high, because of the high expenses on the transmission line system which collects electricity from the small plants to transmit electricity in the national grid.

Tran Viet Ngai, Chair of the Vietnam Energy Association has noted that in fact, investors had stopped pouring money into small scale hydropower plant projects before the ministry decided to cut down the number of projects shown in the power plant development program.

A forecast says Vietnam may lack 50 billion kwh of power by 2030. However, it does not lack electricity now. 90 percent of electricity has been provided to serve the industrial production, while only several percent of electricity output serves the household daily use. Meanwhile, the production has been stagnant in the economic crisis.

“Why should the Electricity of Vietnam (EVN) buy electricity from small scale hydropower plants if it does not lack electricity?” Ngai said.

Before deciding to pour money into hydropower projects, one should consider if it can sell electricity to EVN, the only wholesale buyer.  Meanwhile, EVN itself is also big power generator which has 14,000-15,000 MW of hydropower.

“It’s now the end of small scale hydropower plants. No one would be foolish enough to invest in small scale hydropower projects nowadays,” Ngai said.

Also according to Ngai, in the future, coal run and gas run power plants would be the main sources of power supply.

Vu Ngoc Cu, Deputy Chair of the Lao Cai provincial Entrepreneurs’ Association, also thinks that it’s very risky to make investment in hydropower projects nowadays.

It always requires big investment rates for hydropower projects and long time to take back the investment capital. Most of the hydropower plants are located in remote areas where the transport infrastructure conditions remain very poor, which makes it very difficult and costly to carry equipments and materials to the sites to serve the construction works.

Meanwhile, the investors also face a lot of other high risks, from the spiraling prices due to the economic recession, the changeable credit policy, the flood, drought or natural calamities.

According to Cu, the investment rate for small scale hydropower projects in Lao Cai is VND25-30 billion per 1 MW in Lao Cai province. This does not include the expenses to be spent to connect the power plants with the national grid.

DDDN