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EVN says Vietnam still needs to buy electricity from China

(10:36:12 AM 17/07/2014)
(Tinmoitruong.vn) - Electricity of Vietnam (EVN), responding to the public’s severe criticism about electricity imports from China, said that the purchases were needed to ensure domestic demand.


Thoi bao Kinh te Vietnam has quoted a senior executive of EVN as saying that Vietnam still needs to import electricity from China to ensure stable electricity supply in northwest Vietnam.


A lot of power plant owners complain that they cannot sell electricity to EVN, the only wholesale electricity buyer and distributor, even though they accept low selling prices.


While EVN refuses to buy electricity from domestic plants at low prices, it has been buying electricity from China at higher prices, a move described as “enigmatic”. The public has doubts that EVN might be receiving some benefits from the electricity supply contracts with China.


EVN’s senior executive denied the “benefits”, saying that buying Chinese electricity was a necessity.


Vietnam was aware of the danger of electricity shortage 10 years ago.  While electricity consumption has increased rapidly by 17 percent, many power projects cannot be completed as scheduled for many reasons.


In order to ensure a stable electricity supply, in 2003, EVN drew up a plan to import electricity from China to satisfy domestic demand. It began importing electricity in 2004 to provide electricity to 13 northern provinces.


The imports then eased the electricity shortage in the period from 2004 to 2010, thus helping ensure a stable electricity supply for the national grid.


In 2010, when hydropower plants were not able to run at their designed capacity due to the harsh dry season, EVN imported a huge volume of 5.6 billion kwh from China. If it had not bought Chinese electricity, Vietnam would have incurred regular outages.


Imports from China have been decreasing considerably since 2010 as the domestic supply has become more abundant with power plants put into operation. Meanwhile, the economic growth slowdown led to lower electricity usage, thus helping balance supply and demand.


According to EVN, in the first six months of 2014, Vietnam imported 1.14 billion kwh only, much lower amount than the imports in the same period of the last few years.


EVN set up a yearly electricity import plan after considering the domestic demand and supply. The plan is adjusted monthly when there are changes with supply sources.


Also according to EVN, under the contract, Vietnam has committed to buy electricity from China until the end of 2015. After that, the two sides will discuss power exchange between Vietnam and China, i.e., Vietnam may export electricity to China when its power supply is more than sufficient, and import electricity from China when supply cannot satisfy domestic demand.


EVN buys Chinese electricity at 6.28 US cent per kwh, which is lower than the prices offered by domestic thermal coal-run and gas-run power plants, but higher than the prices offered by domestic hydropower plants.


Therefore, EVN only buys electricity from China in the dry season, when domestic hydropower plants don’t have a high output.