Due to lower hydropower output, the State-owned Electricity of Vietnam Group (EVN) intends to spend nearly VND5 trillion (USD239.6 million) on power purchases from China this year.
EVN has to continue to buy electricity from China
Dang Hoang An, EVN Deputy General Director said on January 16 that dry weather would affect several areas in Vietnam this year with the central and southern regions being the hardest hit.
As a result, apart from power purchases from foreign sources, EVN would have to spend as much as VND5.542 trillion (USD265.5 million) on mobilising more diesel-fuelled sources in 2013, driving up retail power prices, he noted.
The country’s power output is estimated to total 133.4 billion kWh this year, up 11% from a year earlier. The national power consumption during this dry season is estimated at 64.14 billion kWh.
The country targets hydropower output at 53.94 billion kWh during the year, accounting for 40.4% of the national figure.
Coal-fuelled power sources are expected to contribute 22% to the national output, equivalent to 29.4 billion kWh while gas-fuelled power sources 44.35 billion kWh, representing 33.24% of the national figure.
The country is estimated to have to mobilise 1.57 billion kWh from diesel-fuelled power sources and import over 3.6 billion kWh from China.
According to An, the mobilisation of diesel-fuelled power sources would drive up production costs and more losses. He explained that it costs VND3,530 to produce 1 kWh which is then sold at an averaged VND1,400.
He estimated that the consumption of 1.57 billion kWh from diesel-fueled power sources this year would mean EVN has to bear additional productions cost of up to VND5.542 trillion (USD265.5 million.
Concerning power purchases from China, EVN Deputy General Director Dinh Quang Tri said the group has signed five-year contracts to buy electricity from the neighbouring country.
EVN currently has to pay around VND1,300 per kWh of electricity sourced from China, according to a reported by made Minister of Industry and Trade Vu Huy Hoang at a National Assembly’s meeting in the middle of last year.
This means that EVN would have to pay VND4.773 trillion (USD214.3 million) on power purchases from China this year.
According to existing contracts EVN would be forced to buy a certain amount of electricity from China annually.
As a result, EVN was compelled to continue buying power from China at prices much higher than domestic sources last year even though domestic power supply was sufficient.
Regarding power consumption, Dang Hoang An emphasised the urgent need to work out more effective measures to encourage people to use electricity more efficiently.
“Domestic power consumption is still inefficient,” he assessed.
Power retail prices are estimated to increase by 7.2% to averaged VND1,459 per kWh this year.