Steel and cement sectors must minimise electricity use

This is the first time pressure of supplying power for the two industries has actively been discussed, before the risk of 2011′s power shortage, which is forecasted to be two to three times more serious than last year.

The meeting was chaired by deputy minister of Industry and Trade Hoang Quoc Vuong last week, with the participation of the Vietnam Steel Association, Vietnam National Cement Corporation, Vietnam Steel Corporation, Electricity of Vietnam (EVN), Electricity Regulatory Authority of Vietnam, Energy Department and Department of Heavy Industry.

Deputy minister Vuong said 2011 continues to be a very difficult year for power supply. According to EVN’s power supply and operation plan in 2011, there might be a shortage of up to two billion kWh of power in the dry season of 2011, doubling last year’s shortage. Thus, reducing the use of power is required and steel and cement industries must reduce power consumption during this period, directed the deputy minister of Industry and Trade.

In 2010, as cutting living power was not enough, steel and cement industries were also affected. In July 2010, the Vietnam Steel Corporation sent written document to Ministry of Industry and Trade requesting the ministry to direct EVN not to apply sudden power cut. Just two months later, EVN sent written report to the ministry mentioning that the hot development of steel industry, with supply exceeding demand, has put great pressure on power sector, which already lacked of investment capital, now must supply power for the projects out of planning.

In the context of future power shortage, the ministry also requested steel and cement enterprises to set up production and repairing plans to minimise the use of power in the dry months (especially from March to June) of 2011.

In 2010, commercial electricity output of EVN was estimated at 85.7 billion kWh (up by 14.5 percent over 2009). Of that, steel and cement manufacturing already consumed 10.19 billion kWh.
The power consumption of these two industries accounted for 12.04 percent of the total commercial electricity production, up by 27.5 percent over 2009. Power consumption of steel sector was 4.67 billion kWh, accounting for 5.52 percent, and of cement sector was 5.52 billion kWh, accounting for 6.5 percent.

According to calculations of Vietnam Cement Association, cement consumption would continue to increase by nine to 10 percent compared to 2010, estimated at 56 to 57 million tonnes.

In 2011, cement industry would have 10 new plants put into operation, with output volume expected to increase by about nine billion tonnes, bringing the total capacity of cement production in 2011 to estimated over 60 million tonnes, meeting the domestic demand and having a little surplus for export.

In 2010, cement industry produced nearly 51 million tonnes, the consumption reached 50.21 million tonnes, up by 10 percent compared to 2009.

As forecasted, with the rise of input costs as at present, in 2011, prices of electricity, coal and packing would continue to rise, and there would be an increase adjustment to prices of cement in the market.

Particularly, as recommended by Department of Heavy Industry (Ministry of Industry and Trade), in 2011, cement enterprises would also face tension of power supply; the peak time is from March to June.

To limit the negative impacts of power reduction, at the request of Ministry of Industry and Trade, the Vietnam Cement Association and Vietnam National Cement Corporation have sent written document to members of steel and cement industries directing them to soon improve technology and equipment, in order to enhance efficiency of power use. Especially, those members should have plans to used waste energy to to support production.

To avoid the same situation like last year, EVN needs to work with steel and cement manufacturers to build a unified plan for power supply in 2011. However, if EVN needs to reduce power supply, EVN should still prioritise the plants of those two sectors, which have high electrical efficiency and are in development planning. – Dien dan kinh te VN

Tags: Vietnam electricity, Vietnam energy, Vietnam power shortage