The power sector would need a total of US$48.8 billion to generate 330 billion kWh of domestic electricity per year by 2020, according to Deputy Minister of Trade and Industry Hoang Quoc Vuong.
Vuong made the statement at a conference held in Ha Noi on Wednesday to launch a 10-year national power development plan.
Viet Nam is currently able to generate around 100 billion kWh of power per year.
According to the plan, 3 per cent out of the 330 billion kWh will be imported. The remaining 97 per cent will comprise 19.6 per cent hydropower, 46.8 per cent thermal power, 24 per cent gas generated power, 4.5 per cent renewable energy, and 2.1 per cent nuclear power.
Nearly 67 per cent of investments will be directed towards power generation sources while 34 per cent will go to the power grid.
Ministry figures have shown that, during the first half of this year, over VND3.5 trillion (US$171 million) was lost due to current low power prices.
“EVN has a VND10 trillion ($488 million) debt with the Viet Nam Coal and Mine Group (Vinacomin) and PetroVietnam.
In addition, the company lost more than VND8 trillion ($390 million) last year,” Vuong said.
The deputy minister confirmed that this has been the first time that power prices have been mentioned in the plan and that the Government has encouraged private sector investment in the industry.
Electricity prices are set to be increased by 40 per cent with two to three cents per kWh added until 2020 to ensure enough capital reaches the power sector, he said.
“While there are several solutions to mobilising investments, including issuing Government bonds, developing groups and calling on foreign investment, adjusting electricity tariffs to make up for investment costs is the most important,” Vuong added.
Accordingly, the Prime Minister has allowed Electricity of Viet Nam (EVN) to adjust electricity prices within five per cent, creating a flexible mechanism for industry development.
Investors have been actively investing in small hydropower plants, expecting large profits at investments of around $10 million per project.
“Some plants need reviewing, providing only small amounts of power at great cost and to the detriment of the environment,” Vuong said, adding that power projects required several billions of dollars for proper infrastructure development.
EVN, Vinacomin and PetroVietnam have all played important roles in developing power resources to help build a competitive energy market.
The new plan, set to help supply all rural families with electricity by 2020, also targets putting Viet Nam’s first nuclear power plant, producing a total of 10,700MW (equivalent to 10 per cent of the country’s total output) into operation in the same year.
