Current coal supply policy: cause of coal-power crisis

VietNamNet Bridge - Electricity of Vietnam (EVN), the biggest electricity generator in the country, has complained to the government about the oversupply of coal, but at other times, the shortage of coal.


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EVN has warned Vietnam may face electricity outage



Most recently, EVN repeatedly gave warnings that Vietnam may face electricity outage because Vinacomin, the largest coal miner, does not supply enough coal to coal-fired thermal power plants. 

According to EVN, the plants in the north are seriously lacking coal and have to operate at a moderate level. The Quang Ninh Plant stopped its two power generation units in November because of short coal supply.

In its latest dispatch, dated November 20, to the Ministry of Industry and Trade (MOIT), EVN said Vinacomin and Dong Bac Corporation, at a meeting between EVN and coal suppliers, committed to provide enough coal to run the plants, but in fact, the supply had come in dribs and drabs.

Meanwhile, EVN in May 2017 asked the government to approve its plan to cut the coal volume it had to buy from Vinacomin by 2 million tons, citing the high price and low quality. 

Reasons

According to EVN, the plants in the north are seriously lacking coal and have to operate at a moderate level. The Quang Ninh Plant stopped its two power generation units in November because of short coal supply.

The shortage of coal for power production in the last months of the year is attributed to increased demand and decreased supply.

In terms of demand, thermal power plants have to intensify their power production to offset the decrease in hydropower output caused by the drought.

According to Tran Viet Ngai, chair of the Vietnam Energy Association, the drought in central provinces is serious, and the provinces cannot generate electricity from high-capacity hydropower plants. 

As a result, the provinces have to use more electricity from thermal power plants, estimated at 47.3 percent of total output this year instead of 40 percent in previous years.

Meanwhile, the coal supply is limited because of policies and price fluctuations in the world market.

First, under the PM’s instruction, EVN only has the right to buy coal for electricity production from Vinacomin and Dong Bac Corporation. 

If EVN lacks coal, it has to ask the two corporations to increase supply or report to ministries for help, while it cannot buy coal from other sources.

Second, the coal inventory for domestic electricity production is not plentiful because of the sharp increase in exports, powered by the coal price escalation in the world market and the depreciation of the Vietnam dong.

The price of coal used for power production has increased by 130 percent in the world market since 2016, when it fell to a low of $50 per ton.

Meanwhile, the dollar price increased from VND22,735 on January 1, 2018 to VND23,390 in August, facilitating exports.


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Kim Chi

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