Transparency needed to draw power industry capital, officials say
Transparency needed to draw power industry capital, officials say
According to experts, in order to attract strong investment in the power industry, Vietnam needs to put in place a competitive electricity market with transparent prices and perfect mechanisms to facilitate an effective investment environment.
Increasing demand
Nguyen Tuan Anh, Deputy Director of the Electricity and Renewable Energy Authority under the Ministry of Industry and Trade (MoIT), said that new power sources expected to be put into operation in the 2022-2025 period will not keep up with the load growth, making it increasingly difficult to ensure stable supply and risking peak capacity shortage in the northern region from May to July.
Transmission of renewable energy sources remains limited |
Nguyen Tuan Anh explained that about 10 major power projects in which Electricity of Vietnam (EVN) is not invested, are behind schedule bringing capacity shortage to about 7,000 MW, which will affect power supply. Meanwhile, renewable energy sources (solar and wind power) have been significantly supplemented, but transmission of the energy remains limited, likely resulting in local electricity shortages at times.
Tuan Anh also said that according to the MoIT’s Electricity Master Plan VIII, the demand for commercial electricity in the 2021-2030 period is expected to reach 8-9 percent, placing ongoing pressure on grid construction and power supply.
Therefore, he said, Vietnam needs to promote investment in the power grid, targeting a balanced development in power supplies and loads, minimize inter-regional power transmission by 2030, as well as calling for private investment in the transmission grid in order to reduce the burden on the electricity industry.
Transparency in price policy
Nguyen Thai Ha, Deputy Director of the Investment Management Board of T&T Energy Group JSC said that the first thing big foreign partners care about is transparency and stability in policies, as well as favorable terms of contracts to ensure consumption of relatively large output over a relatively long time.
Investment in transmission grids to connect power sources |
Sharing the same opinion, Pham Thi Thanh Tung, Deputy Director of Credit for Economic Sectors Department under the State Bank of Vietnam, said that to make the banking sector's mechanisms and policies effective, apart from the efforts of the sector, the MoIT and EVN also need to soon issue a policy on electricity prices, ensuring transparency and consistency to gain investor trust.
To attract capital and formulate policies and mechanisms for the development of renewable energy and the power grid, the state agencies need to avoid interruptions and gaps as they did with solar and wind power development. Only then can they mobilize more private investment in the electricity sector.
Currently, the MoIT is studying and amending the Electricity Law to revise policies and laws on investment, bidding, and development of power sources and transmission grids. The Power Master Plan VIII has also provided solutions on electricity development, which stipulate regulations on investors, ministries, sectors, the Committee for Management of State Capital at Enterprises, and localities.
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Total investment capital demand for Vietnam's electricity development in the 2021-2030 period is estimated at US$141.59 billion, of which the demand for power sources is US$127.45 billion and that for grids is about US$14.14 billion. |
