The sluggishness of most liquefied natural gas (LNG) power projects in recent times may seriously affect national energy security.
Not much has changed yet
“According to reports from some localities as well as monitoring by specialized units of the Ministry of Industry and Trade, the implementation of gas-fired power projects has not changed much, except for Nhon Trach 3 and 4 Power Plant Projects. If this situation continues to recur, national energy security will be seriously affected.”
This was the statement of Mr. Nguyen Hong Dien, Minister of Industry and Trade, at a meeting with ministries, branches, localities, energy corporations (Vietnam Electricity Group - EVN, Vietnam Oil and Gas Group - PVN) and investors on thermal power projects using domestically exploited natural gas and liquefied natural gas (LNG) in the list of key investment projects of the Planning and Implementation Plan of the Area VIII Planning held on May 24.
In fact, gas-fired power projects, including domestic natural gas and liquefied natural gas, are considered extremely important power sources, as they can serve as a flexible, low-emission baseload power source - in line with Vietnam's goal of achieving carbon neutrality by 2050.
Since the beginning of the 15th Government term, the Government, the Prime Minister, and the Ministry of Industry and Trade have focused on directing and urging the implementation of key energy projects; the Ministry of Industry and Trade also regularly holds working sessions with localities, ministries, sectors, and relevant investors to urge the implementation of projects. However, the results have been very modest.
“There have been 6 working sessions between representatives of the Steering Committee, the Ministry of Industry and Trade and other ministries, branches with localities and relevant corporations on gas-fired power projects, but the situation has not progressed much, except for the Nhon Trach 3&4 Power Project,” said Mr. Dien.
As of May 22, 2024, most of the gas-fired power projects are in the investment preparation process and have not made much progress. There are 3 LNG gas-fired power projects, Ca Na, Nghi Son, Quynh Lap, with a total capacity of 4,500 MW, which have not yet selected investors. With the project in the investment preparation process, Hai Lang Phase I, Quang Ninh has not completed the Feasibility Study Report (FS) according to the opinion of the Department of Electricity and Renewable Energy to resubmit to the Ministry of Industry and Trade for appraisal.
In addition, the LNG Bac Lieu Project, Hiep Phuoc Phase I, and O Mon 2 have not completed the negotiation of the Power Purchase Agreement (PPA). The Long An I and II projects have not completed the adjustment of the investment policy and have not approved the FS. With the two BOT Son My I and BOT Son My II projects, the investors have not completed the FS as prescribed to be eligible for approval.
Even the Nhon Trach 3&4 Project, which has completed 85% of construction and will generate commercial electricity from November 2024, has not yet officially signed a PPA.
Waiting for mechanism
Speaking to reporters from Dau Tu Newspaper, many experts said that the reason why some localities are slow in selecting investors is because the implementation steps must follow procedures. However, even when an investor is selected, the question of when the factory will start operating is still a difficult question to answer clearly.
According to the Power Plan VIII, from now until 2030, Vietnam plans to develop 30,424 MW of gas-fired power. Of these, 10 projects will use domestic natural gas, with a total capacity of 7,900 MW, and 13 projects will use imported LNG, with a total capacity of 22,524 MW. 
This can be seen in the reality of the Bac Lieu LNG Power Project. Although the investor was selected in January 2020, that is, 4 years ago, it is still very vague. “Although the Nhon Trach 3 & 4 LNG Power Project is being implemented vigorously, we must see that behind it is the support of PVN - a very large unit. But even with this support, it is not easy to implement other power projects when the mechanism is unclear as it is now. The remaining private investors just line up and wait,” commented Mr. PD, a representative of a foreign investor.
Sharing this reality, Mr. Nguyen Binh, an expert in developing electricity projects, said that the Draft on the mechanism for gas-fired power projects issued by the Ministry of Industry and Trade mentioned the minimum rate of electricity through contracts (Qc) of 70% and no more than 7 years. But no private investor can reach this level.
“To repay the bank loan, the project must sell about 80-85% of the electricity output according to the annual design capacity and the repayment period must last at least 9-12 years, depending on the type and scale of the project. For example, at the Hai Lang project, Korean investors have proposed a Qc level of 85-90% to ensure the feasibility of capital arrangement,” Mr. Nguyen Binh shared.
This person also said that the fact that the electricity price is set in VND alone has made many investors hesitant because they are worried that strong exchange rate fluctuations will affect their revenue and debt repayment.
According to the request of the Ministry of Industry and Trade, before June 30, 2024, investors must report to competent authorities, the State Steering Committee for important national programs, works and projects, key energy sector projects and provincial and municipal authorities on the commitment to project implementation progress with the common goal, the highest being commercial power generation before 2029.
In reality, it takes 3.5-4 years to build a power project, so to generate commercial electricity before 2029, projects need to arrange loans before entering 2026. However, to arrange loans from abroad, there must be an officially signed power purchase contract and the negotiation time for this contract, such as the Nhon Trach 3&4 Project currently being implemented, is not less than 2 years, while the Bac Lieu LNG Power Project has not gone anywhere after 4 years.
Source: https://baodautu.vn/du-an-dien-i-ach-cho-don-bay-d216260.html
Comment (0)