Steel, cement sectors to pay more for power
Steel, cement sectors to pay more for power
Power price hikes topped the agenda in an on-line discussion titled "for sustainable development of the local steel and cement industries" held in Ha Noi on Wednesday.
Tran Viet Ngai, chairman of the Energy of Viet Nam Association, said Vietnamese customers pay an average of VND1,600 (US$0.076) for a kWh of electricity compared with $0.1 in other countries in the region.
To operate all the power plants in existence by 2020, the sector needs 80 million tonnes of coal compared with some 30 million tonnes expected to be mined in the country this year.
Thus, Viet Nam will have to import coal for its thermal power plants, according to Ngai.
He said electricity prices will then rise to VND8,000-9,000 per kWh. "The electricity sector has suffered great losses."
Bui Quang Chuyen, deputy head of the Ministry of Industry and Trade's Heavy Industry Department, said steel and cement plants consumed 12 per cent of the country's electric output in 2010 and 11.4 per cent last year.
In 2013 the steel sector is expected to produce 5.3 million tonnes of ingot and 10 million tonnes of steel, an increase of 10 per cent compared with last year.
The supply of some steel products exceeds demand while others are imported to meet domestic demand.
Most steel plants in the country are small and use outdated technologies that are not environmentally friendly, Chuyen said.
Nguyen Van Thien, chairman of the Viet Nam National Cement Association, said the country is expected to achieve cement output of 75 million tonnes by 2015, 10 million higher than demand by that time.
Nguyen Tien Nghi, deputy chairman of the Viet Nam Steel Association, said power price hikes would raise costs for the steel and cement sectors, causing them problems since prices of steel and cement products cannot be raised.
Nghi said any power price hikes would have negative impacts on these two sectors and affect the country's economy.
Ngai of the Viet Nam Energy Association said the steel and cement sectors have to adopt the latest technologies that help them use power effectively and profitably.
Chuyen summed up by saying hiking power price is "a must."
He added that by 2020 any manufacturer using electricity inefficiently would face bankruptcy because the high production costs would render them uncompetitive.
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