Overview of power industry in Q1/2023 – What direction is there for the alarm situation of the shortage of stored electricity?

 

Electricity production in the first months of 2023 decreased

On May 22, the electricity industry fell into a state of alarm when EVN announced that the power system no longer had backup capacity, warning that the whole country was at risk of power shortage. The main reason comes from the intense heat from the end of April, causing the demand for electricity to increase, but the power output has decreased. National electricity output decreased in the context of industrial production decreased in the first quarter of 2023, EVN also said that this figure in the first quarter of 2023 reached 61.83 billion kWh, down 1.6% compared to same period.

Source: VIRAC’s Report

 

Coal-fired power output in Q1/2023

Source: VIRAC’s Report

 

According to the report of VIRAC and data provided by EVN, the total electricity output produced from coal fuel in the first 4 months of 2023 reached 40.0 billion kWh, accounting for 46.5% of the total electricity production and import of the whole system. 

Besides, according to VIRAC’s report, in the first quarter of 2023, coal-fired power output decreased by 1% compared to the same period last year.

 

Source: VIRAC’s Report

 

The main reason for this decline in power output is said to be that one of the leading coal exporters to Vietnam – Indonesia has applied new restrictions on coal exports to ensure domestic supply. However, the domestic coal price remained at 1.5 million VND/ton, while the world coal price fluctuated strongly and remained at a high level. Therefore, domestic enterprises have switched to using domestic coal sources to reduce input fuel costs.

 

As for the domestic market, due to the great demand for electricity, the supply of fuel to increase power output, even though it has been mobilized at full capacity, still does not meet the actual requirements when put into operation.

 

Gas-fired power output in Q1/2023

 

Source: VIRAC’s Report

 

According to VIRAC’s report, gas-fired thermal power output in the first quarter of 2023 decreased slightly compared to the same period last year.

Natural gas production decreased over the same period mainly because the main gas fields such as Bach Ho, Te Giac Trang, Su Tu Den, etc. are in the final stage of the field. Because the mines have been exploited for about 15-35 years, the level of production decline is high. Although new mines have been put into operation, they are still slow due to lack of capital, problems with investment procedures, difficulties to maintain and increase mining output, and expansion of exploration.

 

Hydroelectricity is seriously affected by drought and El Nino

 

According to the combined report, the impact of climate change and the El Nino phenomenon has caused a prolonged drought and water shortage, thereby affecting the flow of water to hydropower reservoirs in all three northern regions. Central and South both fell sharply compared to the same period in previous years. The total flow to large reservoirs in the North Central region is forecasted to be 15-35% lower, the Central Central and South Central regions 15-40% lower, and the Central Highlands 10 – 25% lower compared to the average of the years.

 

According to the data given by the Electricity of Vietnam (EVN), by 11/5/2023, there are 11/47 large hydropower reservoirs whose water level has reached dead water level or near dead water level, including: Lai Chau , Trung Son, Dong Nai 2, Buon Tua Srah, Huong Son, Tri An, Ialy, Ba Ha River, Xekaman 1, Dakr Tih, Se San 4.

 

Renewable energy power plants are still “covering mats”

 

In this urgent situation, EVN is planning to import electricity from Laos and China to solve the problem of electricity shortage. In which, the Group is negotiating to buy electricity from Laos through Nam Kong Hydropower Plant Complex, Nam San Hydropower Plant, which is expected to operate commercially in May; buy electricity from China via the 110kV Tham Cau – Mong Cai transmission line (Quang Ninh) with a capacity of 70MW.

However, a lagging fact of the power industry is that despite the shortage of domestic power output, it has to be imported from abroad, encouraging people to save electricity, but currently our country still has too many power plants using renewable energy that are “covered up” that cannot be generated on the national electricity grid.

Up to now, there are 85 renewable power projects (including 8 solar power projects and 77 wind power projects), with a total capacity of more than 4,700MW that have been put into investment, construction and “missed” the discount because the FiT price for wind power ended on October 31, 2021 and solar power ended in December 2020.

The inability to agree on purchase and sale prices with transitional renewable energy projects makes investors stuck, power plants “covered up” cannot operate commercially, facing the huge risk of default. Meanwhile, the power shortage still occurs and EVN has to call on people to save electricity, or to import electricity from foreign countries.

 

What direction for the electricity industry in the last months of 2023?

• State directives

In 2023, Hanoi has set a target to save 1.7-2.2% of the total energy consumed in the city. 65% of key load enterprises have committed to reduce use according to the chart that the electricity industry has built. 75% of enterprises, industrial parks, and industrial clusters The Department will conduct extensive propaganda, directly advocate for changes and gradually convert outdated, energy-intensive technologies to new technologies consuming less energy.

The Department of Industry and Trade sets the target to complete 55 green energy-using facilities in 2023. It is expected to organize about 1,000 energy-saving training courses to wards and residential groups.

At the same time, in the recent Standing meeting, Prime Minister Pham Minh Chinh directed the immediate solutions with the goal of not running out of electricity for production, business and consumption.

First, the Vietnam Coal-Mineral Group and the Northeast Corporation must ensure an adequate supply of coal for domestic coal-fired power plants, as much as they need to be supplied.

Second, power plants using imported coal must implement solutions such as borrowing, borrowing, buying back, advancing… coal from other plants.

Third, make the most of hydroelectricity at the right time.

Fourth, the National Oil and Gas Group must ensure an adequate supply of gas and oil for thermal power plants running on gas and oil.

Fifth, negotiate at provisional prices with wind and solar power projects that have completed construction investment and can immediately generate electricity into the national electricity system.

• Timely action of the whole electricity industry

According to EVN’s General Director, in recent days, the whole electricity industry has mobilized all capacity of power plants. At the same time, all employees of the electricity industry are also available 24/7 to work with local departments, agencies, and electricity customers to implement a series of energy-saving solutions.

Specifically, to mobilize to save electricity at the headquarters and working offices of the following units: At administrative and non-business agencies (saving 10%); public lighting (save 50%); outdoor decorative advertising lighting (save 50%); key energy users (saving 2%).

The results of these measures have, on average, contributed to a reduction in daily electricity demand by more than 5.9 million kWh. In which, the reduction of public lighting alone saves 900 thousand kWh/day.

• Raise people’s awareness of saving electricity

 

In the current difficult situation of the electricity industry, in addition to the above solutions, the most important and indispensable solution is to call on people to raise their awareness of saving electricity. Therefore, in order to contribute to further raising the awareness of people and businesses in the work of saving electricity, Mr. Trinh Quoc Vu, Deputy Director of the Department of Energy Saving and Sustainable Development (Ministry of Industry and Trade), informed The Ministry will continuously review and promptly develop regulations and standards and advise all levels to build and issue mechanisms to promote and encourage economical and efficient use of energy and electricity.

In addition, implementing and coordinating with localities to communicate about electricity saving through programs such as Earth Hour, organizing contests on saving electricity, saving energy… are also solutions that have been adopted. appreciate this moment.

 

Information on Vietnam’s e-commerce industry is compiled from the “Report of Vietnam’s electricity industry in Q1/2023” conducted by VIRAC. The full report will provide customers with in-depth analysis of the business environment, as well as the global and domestic market situation. In addition, VIRAC also offers some prospects, forecasts, and recommendations for businesses in the process of business and production.

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