Electricity demand outgrows supply in northern Vietnam

There are few electricity projects in the planning for northern Vietnam. Illustration photo: Quang Trach 1 thermal power plant

In mid-June, Electricity of Vietnam (EVN) and a consortium of contractors comprising of Japan's Mitsubishi Corporation, Hyundai Engineering and Construction Co., Ltd. (HEC) of South Korea, and Construction Corporation No.1 of Vietnam signed a contract on a bidding package of Quang Trach 1 thermal power plant in the central province of Quang Binh.

The VND30 trillion ($1.3 billion) engineering, procurement, and construction (EPC) contract includes the construction of two turbines with a combined designed capacity of 1,200MW and thesupporting infrastructure. The first turbine’s construction is expected to be completed within 42 months and the second one would be finished within 48 months from the day that the contract comes into effect.

With the construction plan of Quang Trach 1 thermal power plant, until early 2025, only 600-1,200MW will be added to the national grid.

The initial investor of Quang Trach 1 thermal power plant project was PetroVietnam. In 2016, EVN replaced PetroVietnam as the investor.

The problem is that EVN took five years to deal with problems related to investment procedures and it would take nearly five years to complete the construction, thus the total time for completing the 1,200MW thermal plant is 10 years.

Since 2016, a few large-scale power generation projects in the northern region either started construction or went into commercial operation. These include the 600MW Thang Long thermal power plant, the 600MW Thai Binh 1 thermal power plant, the 1,200MW Hai Duong thermal power plant. The 1,200MW Nghi Son 2 thermal power plant is expected to start commercial operation in 2022. The construction of these projects also took a long time.

EVN – the key unit in charge of developing power plants – did not even begin construction of any power plants between 2016 and the end of 2020 despite numerous projects waiting for construction. Until January 2021, the construction of the expanded Hoa Binh Hydropower Plant was kicked off, however, it would take at least three years to complete the construction.

In addition, despite Quang Trach 2 thermal power plant having its investment planning approved in February 2021, it will take a few years to complete the investment procedures.

Although a lot of renewable energy projects in the central and southern region come into operation, they cannot meet the electricity demand of the northern region due to the limited capacity of the 500kV transmission system.