VietNamNet Bridge – If China stops selling electricity to Vietnam, the country will not suffer, experts say. In fact, China is charging high prices and electricity supply has been unstable.  

Dr. Nguyen Minh Due, Chair of the Vietnam Energy Economics Association, said in An Ninh Thu Do that Vietnam has been pursuing a strategy on ensuring power security for many years, under which it develops domestic power generation sources and imports electricity from neighboring countries, including Laos, Cambodia and China.

The contract to buy electricity from China was signed in 2005 which paved the way for Electricity of Vietnam (EVN) to begin importing electricity from China in 2009.

The contract includes provisions about the buyer’s commitments to electricity volume and the time period to purchase.

Since then, Vietnam has been buying electricity from China regularly. If it does not, it will be fined.

And it still has to import electricity even when the domestic supply is abundant.

In 2012, Vietnam had to buy Chinese electricity at 6.08 UScent per kwh, or VND1,300 per kwh, despite the domestic power oversupply.

Due, citing a report, said that at that time, some big domestic power plants ran at 70 percent of the capacity only, while small power plants with the capacity of less than 30 MW could not sell electricity to EVN.

Vietnam now buys Chinese electricity under contract between EVN and Chinese CSD.

When asked what will happen if Vietnam cannot buy electricity from China, Academic Tran Dinh Long, Deputy Chair of the Vietnam Power Association, affirmed Vietnam will have many alternative choices in case it does not buy power from China.

“In one or two years, when other power projects get completed and power plants are put into operation, Vietnam will not have to buy power from China anymore,” he said.

A report showed that Vietnam imported 654 million kwh from China in the first four months of the year.

In 2013, EVN bought 3.6 billion kwh from China, worth VND5 trillion.

While EVN has to buy electricity at high prices from the neighbor, domestic electricity cannot be sold.

Thanh Nien newspaper reported that while some domestic power plants even offered to sell electricity to EVN at VND0 per kwh to be able to run their machines, EVN bought Chinese electricity at prices higher by 2-3 times than the average price at which it bought from domestic sources.

The problem is that a provision of the contract signed between Vietnam and China says that if EVN does not buy the electricity volume agreed by the two sides, and if more than 5 percent of electricity capacity goes back to China, EVN will be fined.

As a result, small hydropower plants in Ha Giang and Lao Cai provinces in northern Vietnam have been forced to cut down generation capacity.

The chair of the Vietnam Energy Association Tran Viet Ngai thinks that the major problem now lies in EVN’s monopoly, which gives EVN the exclusive right to decide from which plants to buy electricity.

Dat Viet