Power shortage due to booming investment in steel industry

The Electricity of Vietnam (EVN) has suggested to the government that it should ask the investors with power demand of over 100 megavolt ampere (MVA) to develop and arrange for their own electricity supplies, as the booming investment in the steel industry has worsened the country’s power shortage.

According to EVN statistics, the average electricity sales price in Vietnamese markets was estimated at 909.28 dong per KWh, or 4.78 UScents/KWh. Meanwhile, the price for steel firms in Thailand was posted at 8.12 UScents per KWh; in Singapore of 14.1 UScents per KWh and in Indonesia of 6.7 UScents per KWh.
The posted electricity price was considered at attractive level for investors in steel industry, resulting in the large number of steel projects.

Up to now, there were 65 steel and iron cast projects in all over the countries with designed capacity of over 100,000 tonnes per year. Of which, 32 projects have been granted investment licences by the local government authorities. However they not yet received the approval from Ministry of Industry and Trade or prime minister (for the projects with investment capital of over 1.5 trillion dong).

In order to supply sufficient electricity for those afore-mentioned steel projects, EVN Group has to make investment to build hundreds of stations with capacity of over 1,205 MVA. Each year, these new steel firms have used up about 3.5 billion KWh, despite the fact that they have already operated with 50 percent of designed capacity. In the past time, EVN has invested over 30 trillion dong in constructing the new power grid in order to supply sufficient electricity for these steel and iron cast projects.

Therefore, recently, ministry of industry and trade has submitted document to the government, requesting the functional authorities not to grant investment licences for the steel projects with small production lines but consume large electricity. In addition, the ministry also suggested the approved steel projects must be listed in the general development plan for at least 5-10 years. For those projects that haven’t been included in the general plan, the investors are required to set up their own electricity supplies.

Tags: Vietnam electricity, Vietnam energy, Vietnam power shortage

Posted by VBN on Aug 30 2010. Filed under Energy. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry