On 25 July 2022, the Ministry of Industry and Trade (MOIT) issued Letter No. 4329/BCT-DL reporting to the Government on the implementation of provisions under the Power Master Plan 8 (PDP 8).
Key points in the Letter:
1. Status of the power system and implementation of national electricity planning
a) Consumption of commercial electricity in the period 2011-2020:
The average growth rate of commercial electricity in the period 2011-2015 reached 10.7%/year, in the period 2016-2020 reached 7.7%; for the whole period 2011-2020, reached 9.6%/year (only 3.4% in 2020 due to the impact of the Covid-19 pandemic).
Electricity consumption is concentrated mainly in the North and the South, accounting for over 90% of the total electricity consumption of the country. The Central region accounts for a low percentage, less than 10%. The proportion of electricity consumption in the North tends to increase gradually (39.2% in 2011, 44.1% in 2020), the South tends to gradually decrease the proportion of electricity consumption (51.1% in 2011, 47 % in 2020).
b) Power source development:
By the end of 2020, the total installed capacity of all types of power sources of the national power system will reach 69,342 MW, of which the North 25,121 (36.2%), the Central region 12,323 MW (17.8%) and in the South 31,898 MW (46%). Basically, the power system ensures to meet the load demand of the whole country.
2. MOIT’s answer to the Deputy Minister’s questions on PDP 8 draft:
v Solar power projects:
MOIT explained that 2,428.42 MW of solar power projects should be added into PDP8 as postponing these projects until after 2030 could pose legal risks and compensation costs for investors. However, these projects need to absolutely comply with the provisions of the Law on Investment and Law on Construction, closely follow the absorption capacity of the national power system and ability to release capacity of the grid; comply with the electricity price mechanism at the time of operation, take responsibility for the efficiency of the project according to approved mechanism. After that, if inspection and examination agencies detect violations, they will be strictly handled according to the provisions of law. In case of serious violations, the authority could even withdraw the IRC and suspend the project.
v LNG power projects:
MOIT explained that there is no need to obtain opinion from Politburo in relation to LNG import capacity and total capacity to be installed as the recent proposal in draft PDP8 is an improvement of technical calculation after reviewing draft PDP8 as a result of Vietnam’s commitments under COP26.
In addition, MOIT also suggests that no legal risks to remove certain coal/LNG projects (already in PDP 7) as those removals have been made in line with proposals from the provinces and investors.
Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.