Realizing the VIII power plan

Coal power difficult to borrow capital

Thanh Hoa Provincial People's Committee has just reported to Deputy Prime Minister Tran Hong Ha to request consideration and approval of the conversion of coal fuel to LNG of Cong Thanh Thermal Power Plant in Nghi Son Economic Zone and update it in the Implementation Plan of Power Plan VIII.

Electricity investment is increased in the VIII planning.

This project was granted the first Investment Registration Certificate by the Management Board of Nghi Son Economic Zone and Industrial Parks of Thanh Hoa province in 2010, and adjusted for the second time in mid-2018.

However, accessing capital for the project is facing many difficulties, making the project difficult to implement, because coal-fired thermal power is no longer an investment-encouraged field for credit institutions.

Therefore, Thanh Hoa Provincial People's Committee proposed Deputy Prime Minister Tran Hong Ha to consider and agree to allow Cong Thanh Thermal Power Project to convert coal fuel to imported LNG with a capacity of 1,500 MW and update the project to the Implementation Plan of Power Plan VIII.

According to the investor representative, the project has completed compensation for site clearance and site leveling for the main factory area, and has invested 80% of the infrastructure for the factory port area.

In addition, many important procedures for the previous coal power project have also been carried out such as the locality agreeing to lease land; the environmental impact assessment report and basic design have been appraised by specialized ministries; the signing of the power purchase contract with EVN for the previous coal power part has been completed...

It is expected that if converted, Cong Thanh Thermal Power Plant will use imported LNG, consuming 1.2-1.5 million tons/year; the plant's capacity will increase to 1,500MW. The average annual electricity output to the grid will increase from 3.9 billion kWh to 9 billion kWh. The total investment of the project will increase from 1.2 billion USD to 2 billion USD.

The investor of the Cong Thanh Thermal Power Plant Project said that LNG is a global trend, therefore, the capital arrangement to convert the coal plant to LNG has been completed after signing a deposit with a consortium of investors including BP Group (supplying gas for the project), GE Group providing equipment and Actis Investment Fund arranging finance.

According to the People's Committee of Thanh Hoa province, Cong Thanh Thermal Power Project has many favorable conditions to implement the investment project and complete the project before 2030 (expected in 2028) if switching to LNG gas fuel.

Maran Gas Achilles vessel enters Thi Vai LNG Terminal, marking an important event in the green energy transition roadmap of PetroVietnam Gas Corporation (PV GAS).

Electricity is prioritized, coal power is reduced

The Power Plan VIII, approved by the Prime Minister in May 2023, determined that by 2030, the structure of domestic gas-fired thermal power and LNG will reach 37,330 MW, equivalent to 25.7% of the total power capacity, accounting for the largest proportion in the power structure. Of which, domestic gas-fired thermal power is 14,930 MW, accounting for 9.9%, and LNG thermal power is 22,400 MW, accounting for 14.9%.

This power plan also has a roadmap to drastically reduce coal power, with the development goal within 20 years (from 2030 - 2050) to completely eliminate coal power and convert and replace it with clean energy sources, especially wind power and gas power.

Not only Cong Thanh, currently, many localities and project investors are also rushing to apply to convert coal power projects to gas power, such as at EVN's Quang Trach 2 Project.

Dr. Ngo Duc Lam, former Deputy Director of the Institute of Energy, said that switching from coal-fired power to LNG power is a reasonable trend. Regarding this project, Mr. Lam emphasized that the reasonableness lies in the location being close to the North - where there is a shortage of electricity and transmission will be easier.

"Usually, coal and gas power plants are located in the South and Central regions, but high electricity consumption is in the North, so the problem arises of "having to transfer electricity to the North" - that is, having to invest in transmission, this is the most pressing issue at present," said Mr. Lam.

A report by the Vietnam Oil and Gas Group (PVN) assessed that the advantages of LNG power plants are high availability, no dependence on weather, large capacity with wide adjustment range, fast response time, minimizing greenhouse gas emissions and pollution compared to coal and oil power plants.

“Putting LNG into use is also consistent with the Government's commitment at COP26 and the trend of using fuels that reduce emissions,” PVN emphasized.

At the meeting with 10 provinces with gas-fired power projects in June 2023, the Minister of Industry and Trade assessed that the progress of construction and operation of LNG power plants is crucial to national energy security until 2030, so if any project is at risk of being behind schedule, the Ministry of Industry and Trade will report to the Government and the Prime Minister to delay the progress of that project and accelerate backup projects/or calculate other alternative options to ensure safe power supply.

The Minister assigned the Department of Electricity and Renewable Energy to urgently guide, support and assist localities and investors in the implementation process. In particular, to promptly conduct project dossier appraisal according to regulations immediately after receiving complete dossiers submitted by investors.

The price of imported LNG is 1.5 times more expensive than domestic gas, EVN worries about financial balance difficulties . According to EVN's calculations, the price of LNG gas arriving in Vietnam is 1.5 times higher than the price of domestic gas, leading to increased power generation costs for factories and electricity purchases from EVN in the context of difficult financial balance.

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