It takes an average of 7.5 years to complete a project.

The Ministry of Industry and Trade has just sent the Prime Minister a report on removing difficulties and obstacles to implement offshore gas and wind power projects in the Power Plan VIII.

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Electricity investment progress is very slow.

According to Power Plan VIII, the total capacity of gas-fired power plant projects invested in construction and put into operation by 2030 is 30,424 MW (23 projects), of which: the total capacity of gas-fired power plants using domestically exploited gas is 7,900 MW (10 projects), the total capacity of gas-fired power plants using LNG is 22,524 MW (13 projects).

By December 2023, there is only one gas-fired power plant, O Mon I Thermal Power Plant (660 MW), which was put into operation in 2015 and is currently using oil fuel. O Mon I Thermal Power Plant will switch to using gas fuel after having gas from Block B gas field.

One project under construction is the Nhon Trach 3 and Nhon Trach 4 thermal power plant project, with a capacity of 1,624 MW, progress reaching 73%. The Nhon Trach 3 and Nhon Trach 4 thermal power plant project uses LNG from the Thi Vai LNG Port Warehouse.

Currently, the Thi Vai LNG Port Warehouse project has completed construction and put into use, ready to supply LNG to the Nhon Trach 3 and Nhon Trach 4 thermal power plant projects.

The remaining 18 projects are in the process of preparing for investment and construction.

Assessing the progress of gas-fired power projects, the Ministry of Industry and Trade said that the construction progress of combined cycle gas turbine units, from the time of assignment to the investor until commercial operation, requires at least about 7.5 years. Of which, the time for negotiating the Power Purchase Agreement (PPA) and arranging loans is about 2-4 years.

"The duration of this phase is difficult to determine and has great variability, as it depends on the capacity, experience and finances of the investor and the specific requirements in the PPA Contract," the Ministry of Industry and Trade noted.

In practice, the Nhon Trach 3 and Nhon Trach 4 thermal power plant projects have begun construction (currently about 73%) but have not yet signed the PPA contract and arranged the loan capital.

According to the Ministry of Industry and Trade, gas-fired power projects that can be put into commercial operation before 2030 include: power projects in the O Mon Power Center; Nhon Trach 3 and Nhon Trach 4; Hiep Phuoc. The total capacity of the projects put into operation before 2030 is 6,634 MW.

The remaining projects can only be put into operation by 2030 if the PPA negotiations and loan arrangements are completed before 2027. The gas-fired power projects in the gas-fired power chain (Block B, Blue Whale) also depend on the progress of the upstream project to ensure the overall efficiency of the entire project chain.

High demand investor

On the domestic side, investors often require in the PPA Contract to commit to a stable long-term output or to purchase electricity output or to transfer the commitment to purchase gas output from the gas purchase contract to the electricity purchase contract; to transfer the gas price to the electricity price.

Foreign investors always have very different requirements. In addition to the above requirements, foreign investors also require the PPA contract language to be English and Vietnamese. If there is a difference between English and Vietnamese, English will prevail; Foreign law (UK or Singapore). Foreign investors require the Government to guarantee EVN's payment and contract termination, guarantee foreign currency conversion, guarantee risks related to the progress of the connection and transmission project, grid and transmission incidents, etc.

The Ministry of Industry and Trade believes that: The current regulations on electricity market operation do not stipulate a commitment to consume a minimum amount of electricity for plants participating in the electricity market (physical consumption). The regulation on the mechanism of physically consuming electricity for units participating in the electricity market is not consistent with Article 17 of the Electricity Law mentioned above and Resolution No. 55-NQ/TW of the Politburo.

In order to have a basis for implementing gas-fired power projects in the coming time, based on current regulations, the Ministry of Industry and Trade said it will continue to direct EVN and investors of power plants to negotiate and agree on contracted electricity output and add it to the power purchase contract.

However, EVN's agreement and commitment to long-term contract electricity output with investors of gas-fired power projects will create practical problems for EVN (the electricity buyer of the project).

There are cases where the output that EVN commits to purchasing from many power plants will exceed the actual demand. At that time, the plant will not generate electricity but EVN will still have to pay for electricity, affecting EVN's financial balance in case the retail electricity price is not adjusted in time.

However, the implementation of domestic gas-electricity projects such as the gas-electricity project chain such as Block B and Blue Whale will bring efficiency and contribute to the state budget, so the Ministry of Industry and Trade recommends that the Government assign relevant ministries to build a financial mechanism for EVN and PVN in the synchronous implementation of gas and electricity projects, without creating pressure on electricity prices and burdens for EVN.

Recently, the Ministry of Industry and Trade has reported to the Prime Minister, proposing that the Prime Minister agree on the policy for the gas-electricity underwriting mechanism based on the principle of horizontal transfer (transferring gas prices to electricity prices, transferring regulations on underwriting gas output in gas purchase and sale contracts to electricity purchase and sale contracts), assigning the Ministry of Industry and Trade to direct relevant parties to negotiate gas purchase and sale contracts, gas sales contracts, and electricity purchase and sale contracts based on the principles approved by the Prime Minister.

Up to now, the Government Standing Committee has agreed in principle to transfer gas prices to electricity prices for the Block B, Blue Whale, LNG Nhon Trach 3&4 projects.

Regarding the content of underwriting electricity and gas output of the Nhon Trach 3&4 LNG project, the Government Standing Committee commented: "The negotiation of underwriting electricity and gas output is a production and business agreement between enterprises".

Due to the difficulties and obstacles in developing gas-fired power projects (including power projects using domestically exploited gas and LNG), offshore wind power are very new issues, related to many competent authorities, ministries and branches. Therefore, the Ministry of Industry and Trade recommends that the Prime Minister establish an interdisciplinary working group of the Government to focus on researching and proposing mechanisms, policies and urgent and important issues, and at the same time propose amendments to legal documents to ensure consistency and feasibility for submission to competent authorities for consideration and decision.
EVN is about to receive two foreign-invested gas-fired power plants . Two foreign-invested BOT gas-fired power plants are about to be transferred to Vietnam after the 20-year contract expires. EVN is assigned to receive them.