More power cut misery

Sudden power cuts disturbed many enterprises in Vietnam

Nguyen Huu Quang, deputy general director of Vietnam Cement Industry Cooperation, said the recent power price hikes forced the state-owned corporation to add at least VND20,000 ($1) to the price of one tonne of cement.

“But, from April we will have to further add VND80,000 to the price of a tonne of cement due to coal and petroleum price escalation,” he said.

The government from last March raised electricity prices by 15.3 per cent on average, from VND1,077 (5.2 cents) to VND1,242 (6 cents) per kWh.

However, Quang claimed the sudden power cuts were the most damaging.

“We will suffer from a 20 per cent drop of our needed power this year. But, instead of power cuts, Electricity of Vietnam (EVN) should diminish the power volume provided to us, so that we will be able to ensure stable production. Otherwise, the local cement market will be affected. A sudden power cut within an hour can result in thousands of dollars in losses to us,” he said.

Vietnam Steel Association chairman Pham Chi Cuong shared the view. He said the steel industry was not scared of power price hikes, but of “sudden power cuts”, which caused heavyweight financial damages.

“For example, when steel is being manufactured, a sudden power cut can freeze the process. Thus, the manufacturing process must be started from scratch,” Cuong said.

Hanoi’s Planning and Investment Department vice director Nguyen Van Tu said that EVN needed to give power-providing priorities to enterprises producing export-oriented products and products which could replace imported ones.

“If power shortages continue attacking the city’s exporters, they will not be able to boost exports and the city’s economic picture will be darkened with a bigger trade deficit,” Tu said.

Nguyen Thanh Hoa, vice head of the Ministry of Industry and Trade’s Planning Department, said that power provision priorities would be given to enterprises producing export-oriented products and energy-saving projects.

In early this year, EVN deputy director Duong Quang Thanh said that Vietnam would face a power shortage of 3 billion kWh this year due to scarcity of water in all reservoirs.

EVN said additional charge this year was expected to reach 117.6 billion kWh, a rise of 17.63 per cent against last year.

EVN reported that during 2011’s first two months, in order to meet the country’s year-on-year 13.5 per cent increase in demand, EVN produced nearly 6.4 billion kWh, up 10 per cent year-on-year and purchased 8.98 billion kWh, up 14.4 per cent. Some 956 million kWh was imported from China, up 29 per cent against the same period of 2010.