Power generators suffer from… electricity excess

Power companies belonging to PetroVietnam and the Vietnam Coal and Mineral Industries Group (Vinacomin) have complained that they have to cut down production because the Electricity of Vietnam, the only buyer, has decreased the volume of electricity mobilized from the sources.

Nguyen Thi Ngoc Bich, Deputy General Director of PV Power, a subsidiary of PetroVietnam, said that in July, the electricity volume purchased by EVN in July decreased by 423 million tons. Meanwhile, the electricity output mobilized from the plants belonging to PV Power was equal only to 90 percent of the volume agreed before by the two sides.

The decreases in the sales will surely badly affect the business results of PV Power, which fears that it may fail to fulfill the yearly business plan.

Currently, PV Power is making electricity mostly from gas. The sales decreases have forced PV Power to cut down the volume of gas it purchases from PV Gas. Meanwhile, the gas volume supply was fixed by PV Power and PV Gas before. The problem is that when PV decreases the gas volume to purchase, it may face the penalty for breaking the contract.

As for thermo gas-run power plants, when cutting down production, the plants will have to shift from 2-2-1 model to 1-1-1 model, which will badly affect the machines and equipments. Especially, the plants would have to put machines and equipments into maintenance sooner than previous expected.

PV Power has reportedly cut down 10 percent of the regular expenses in order to maintain operation.

Like PV Power, Vinacomin, another big partner of EVN, is also facing the electricity excess, because EVN has refused to use all the Vinacomin’s output.

According to Vinacomin, in July 2011, the volume of electricity bought by EVN from Vinacomin’s factories was just equal to 70 percent of that in June. EVN bought 658 million kwh in June and 400 million kwh in July. Meanwhile, the purchase volume is expected to decrease further in August.

According to Vinacomin, the sharp cut in the electricity volume to purchase, plus the fact that EVN still has not paid the debt of 2 trillion dong to Vinacomin, both have made Vinacomin’s operation more difficult.

Vinacomin has also criticized the coal pricing scheme, saying that the coal prices applied to EVN are too low. According to the biggest coal supplier, in 2011, relevant ministries decide that the coal price should be 940,000 dong per ton. However, Vinacomin can get 580,000 dong per ton when selling to EVN. Especially, Vinacomin can get 108 dollars, or 2.2 million dong per ton, if it exports the coal.

Vinacomin has complained that some thermopower plants have to halt the operation of some furnaces, thus having caused big losses to enterprises. As for coal-run plants, furnaces need to operate stably for a long time, and the stop of some furnaces will surely make the conditions of equipments worse, while it will be very costly to restart the equipments.

Despite the big losses, power generators have no other choice than continuing selling electricity to EVN, because EVN remains the only wholesale buyer in Vietnam.

Meanwhile, EVN has attributed the electricity excess to the low economic growth, which has led to the lower demand for electricity. The electricity demand growth rate had reached 9.1 percent by the end of July in comparison with the same period of the last year, while the figures were always higher than 15 percent in previous years.

Also, the water flowing to hydropower plant reservoirs has been profuse, which has prompted EVN to exclude some thermopower plants from the list of plants from which EVN would buy electricity. EVN would buy electricity from hydropower plants which offer lower sale prices. For the time being, the thermopower plants should go under maintenance. -Vietnamnet

Tags: Vietnam electricity, Vietnam energy, Vietnam power shortage