July 12, 2020 08:31

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Despite high prices, we need to take into account gas-fired power

08:19 | 13/10/2019

VCN- Depending on imported gas or high electricity price is considered a significant challenge in the development of gas-fired power. However, in order to ensure energy security for Vietnam, gas thermal power is an indispensable field.  

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It is expected that in 2030, gas-fired power will increase to 19,000 MW, an increase of 12,000 MW compared to present, accounting for 14% of the system's capacity. Photo: Internet.

Large imports, high price

According to the Department of Electricity and Renewable Energy (Ministry of Industry and Trade),currently, Vietnam has 7,200 MW of gas-fired power, accounting for about 16% of the total system capacity. In particular, the Southeast region has 10 factories with a total capacity of 5,700 MW. The Southwest region has two factories of Ca Mau 1 and 2 with total capacity of about 1,500 MW. The total electricity output is about 45 billion kWh/year, accounting for about 25% of the total system electricity output. It is expected that by 2020, the capacity of gas-fired power will be nearly 9,000 MW, accounting for 14.9% of the system's capacity, behind hydro and coal thermal power.

In order to increase gas-fired power, the key factor is to ensure the gas source for electricity generation. According to the Department of Petroleum and Coal (Ministry of Industry and Trade), the ability to supply gas for electricity production in 2019 will be guaranteed with the output of 6.6 billion m3 (of the Southeast) and 1.42 billion m3 (of the Southwest). The operation of Phong Lan Dai in the first quarter of 2019 has helped offset the declining output of Lan Tay and Lan Do gas fields. The introduction of the SV-DN field in the third quarter of 2020 will add about 1.5 billion m3 of gas per year to the Southeast region. Gas supply capacity in the Southeast region will be maintained at the current output level until the end of 2022. From 2023, the output of gas supply to the coast will be sharply reduced (Block 06.1 stops exploiting in May 2023) and the Southeast region will begin to lack gas.

"With a total capacity of about 19,000 MW of gas power plants in 2030, equivalent to about 22 billion m3 of gas needed for power generation, of which nearly 50% will come from imported liquefied natural gas (LNG)," the Department of Petroleum and Coal said.

The representative of the Electricity and Renewable Energy Department said: “The difficulty in developing gas-fired power is the limitation of domestic gas source, so it depends on imported LNG from abroad.The price of LNG depends on the world market. In addition, Vietnam has no experience in building and operating LNG terminal and a chain of gas-fired projects using LNG. Especially, the high electricity price makes it difficult to participate in the electricity market.”

In comparison, gas-fired power has a "top" price among the power sources.

Specifically, hydroelectricity is approximately VND1,000/ kWh; coal thermal power is approximately VND1,500/ kWh; wind power is VND1,900 - 2,200/ kWh; solar power is about VND2,100/ kWh. Meanwhile, according to the preliminary calculation of Vietnam Electricity (EVN), the average price of gas-fired power using Block B is about VND 2,800/ kWh.

Urgently planning LNG import terminal

In order to ensure the main objectives in the National Electricity Development Planning, the Department of Electricity and Renewable Energy recognizes that in the period of 2020-2030 and following years, it is necessary to develop power source projects include: coal-fired thermal power, gas-fired thermal power (domestic and LNG), renewable energy and electricity imported at appropriate rates.

For the development ofgas-fired thermo-power, it requires the Government's management and decision on the basis of ensuring electricity supply, harmonizing the interests of investors and customers using electricity and having mechanisms for gas-fired power projects to ensure efficiency and attract investment.

About the electricity supply in general and electricity development in particular, Mr. To QuocTru, Vice Chairman of Science Council, Vietnam Energy Association said: theconstruction of coal thermal power plants from now to 2030 is slow. Many hydropower reservoirsare at dead storage level or below dead storage level,reducing the generation capacity which affects the power supply of the whole system. Therefore, the general energy balance from now to 2030 needs new breakthrough solutions, of which the need ofimporting LNG for the energy industry is urgently considered.

The Department of Electricity and Renewable Energy also stated: “Regarding the development orientation, it is expected that by 2030, gas-fired power will increase to 19,000 MW, an increase of 12,000 MW compared to the present, accounting for 14% of the system's capacity. The Ministry of Industry and Trade is reporting to the Prime Minister for consideration to supplement the National Power Development Plan of gas-fired power plants using imported LNG fuel sources at locations which are favorable for the development of power plants and LNG import warehouses and ports such as Long Son, Ca Na.”

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"The Vietnam Energy Association expects that the demand for importing LNG for power generation in 2030 of Vietnam must reach over 1 million tons. The planning of infrastructure for importing LNG in areas such as Phu My Port (Ba Ria), Nhon Trach Port, Ca Mau - O Mon in the coming years should be assigned by the Government to EVN and Vietnam Oil and Gas Group to coordinate in the implementation urgently and seriously to achieve the expected results,"Mr. To QuocTrusaid.

Some experts saidthe current LNG market is very exciting, in order to get competitive prices, it needsthe promotion, investment and help of ministries, branches, especially the Ministry of Industry and Trade in collaboration with the international cooperation agencies to exploit the best reserves and price to import LNG to Vietnam in the future.

By Thanh Nguyen/Kieu Oanh