An LNG power project usually takes 7-8 years, offshore wind power 6-8 years, so it will be difficult to operate before 2030 without a clear mechanism, according to experts.
According to the Power Plan VIII, the total capacity of power sources by 2030 will be more than 150,000 MW, nearly double the current capacity (about 80,000 MW). Gas-fired thermal power sources must be newly invested in at over 30,420 MW, of which 75% is liquefied natural gas (LNG); and offshore wind power is 6,000 MW.
By 2030, there will be 13 LNG power projects developed, but currently only one project, Nhon Trach 3 and 4 thermal power plants, with a total capacity of 1,500 MW, is under construction and expected to operate by the end of next year and mid-2025. Thus, to achieve the target in Power Plan VIII, Vietnam needs to develop about 22,500 MW of gas power in the next 7 years. For offshore wind power projects, some investors are currently licensed to survey the sea, measure wind and geology in some offshore areas.
At a meeting to consult experts on the development of gas-fired and offshore wind power on December 25, Director of the Department of Electricity and Renewable Energy (Ministry of Industry and Trade) Hoang Tien Dung acknowledged the great challenge of putting the projects into operation before 2030. Because a gas-fired power project takes 7-8 years, while offshore wind power takes 6-8 years from selecting an investor to negotiating the purchase of electricity, arranging capital and implementing the EPC contract.
The current challenge in developing LNG and offshore wind power is pointed out by businesses as the lack of legal mechanisms and infrastructure. Mr. Pham Van Phong, General Director of PetroVietnam Gas Corporation (PV Gas), said that LNG power projects are currently having difficulty determining the ability to recover capital, arrange capital or the amount of gas to be imported. The reason is that there is no financial policy, output underwriting mechanism, or price transfer mechanism from gas purchase contracts to electricity purchase contracts.
Mr. Le Manh Hung, General Director of PVN, expressed his opinion at the meeting on December 25. Photo: Dung Can
Similarly, with the offshore wind power project, Mr. Le Manh Hung, General Director of PVN said that due to the similarity with offshore oil and gas activities, when implementing, some activities such as seabed survey can be carried out in parallel. This is completely possible for PVN, but there is a lack of mechanism. Currently, there is no management agency responsible for deciding on policies and planning to test the survey of offshore wind power projects, according to the General Director of PVN.
In addition, the lack of LNG import infrastructure also affects the goals of the Power Plan VIII. According to this representative, not considering the connection of LNG import infrastructure and power plants will not optimize resources, reduce investment efficiency and waste port resources.
"Only the LNG storage and import port in Thi Vai, Ba Ria - Vung Tau province, has been completed. Other warehouses and ports are facing many difficulties and problems," said the General Director of PV Gas.
Meanwhile, experts mentioned the bottleneck in price. Mr. Dinh Trong Thinh, an economic expert, said that it is necessary to clarify the mechanism for buying and selling electricity. "The State has intervened in prices, so there must be a mechanism to ensure that buying and selling follow the market. Only then will investors feel secure in spending billions of dollars to invest in gas and wind power plants," Mr. Thinh said.
Sharing the same view, Mr. Nguyen Tien Thoa, Chairman of the Vietnam Valuation Association, proposed to amend the Electricity Law to calculate the correct and sufficient electricity price. According to him, two problems will arise if the electricity trading mechanism remains as it is now: EVN will suffer losses and go bankrupt, or the State will have to compensate for the price difference between the cost of production and selling electricity to consumers.
"Financial bottlenecks, specifically price, must be resolved and clearly demonstrated in solutions and recommendations of management agencies," Mr. Thoa acknowledged.
Faced with many LNG projects that have been implemented and are preparing for investment facing problems in planning and procedures, last week the Ministry of Industry and Trade issued a document requesting localities to promptly remove and resolve problems within their authority so that investors can implement the projects.
However, in order for LNG and offshore wind power projects to operate in accordance with Power Plan VIII, according to experts, the mechanism problems are all related to laws such as the Land Law, Price Law, Bidding Law, Electricity Law, and guiding documents, which need to be promptly amended and resolved by competent authorities.
They also mentioned the need for a specific mechanism to develop offshore wind and gas power. This proposal was raised by businesses at a meeting in the middle of this month.
Mr. Nguyen Quoc Thap, Chairman of the Vietnam Petroleum Association, said that it is necessary to have a thorough resolution of the National Assembly allowing the Government, ministries, branches and enterprises to implement in parallel with the process of perfecting the legal framework.
Dr. Phan Duc Hieu, Standing Member of the National Assembly's Economic Committee, shared the same view, that it is possible to report to the National Assembly to have a mechanism to implement the law in parallel with the completion and amendment of the law. However, he noted that the Ministry of Industry and Trade needs to establish a group of experts to review and propose amendments to synchronous policies, because the Economic Committee's view is not to develop individual legal documents.
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