VIETNAM: Private electricity plants encouraged

The Government is reaching out to other industry sectors to set up independent power plants to reduce the monopoly of the State-run Electricity of Viet Nam (EVN).

The Viet Nam Oil and Gas Group, one of the biggest independent power investors outside EVN in Viet Nam, is taking part by building Ca Mau electricity plants 1 and 2 that will open in 2007 and 2008, respectively.

By the end of 2006, Viet Nam had 17 independently run power plants (IPP) not affiliated with the State-run EVN, with a combined capacity of 210 MW. Other IPP plant projects are being promoted to merge electricity in the national grid in the coming period.

Work has started on 40 IPP projects, including the 1,950 MW gas-power-fertilizer complex owned by Viet Nam Oil and Gas Group and the thermo-electric plant project by the Viet Nam Coal and Minerals Industries Group with a capacity of 1,400 MW.

Among the IPP projects are a number of hydropower projects invested by Song Da Corporation and other thermo-electric projects owned by foreign investors. According to EVN, the hydropower plants with independent capital resources will be expected to reach a combined capacity of 3,150 MW in the next five years.

The electricity sector forecasts that it needs an investment of US$3.83 billion a year through 2010 to develop the power network.

Of the total amount, EVN will be able to meet half of the investment capital, and the rest must be mobilised from other investors.

Industry Deputy Minister Bui Xuan Khu said by 2020 a more competitive electric power market will be created.

Independent power plants should negotiate to reach a suitable price, he said, with approval from the government’s oversight agency. The establishment of a new electricity regulating agency by EVN in 2007 aims to negotiate electricity prices and implement power buying and selling contracts with the independent power plants.

The agency also handles electricity generation sources, retail distribution, and the import and export of electricity to countries in the Mekong region.

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