Current power supply allays foreign investor concerns

 Vu Huy Hoang, Minister of Industry and Trade affirmed to foreign investors last week at the bi-annual Vietnam Business Forum held in Hanoi that, “there are no outages in Vietnam at this time”.

Hoang’s statement was in response to Marc Townsend, chairman of the American Chamber of Commerce, who said that a lack of adequate infrastructure facilities in terms of power and transport had discouraged foreign investment to Vietnam.

Hoang asserted that, “Power supply in Vietnam has never been as good as it is now”. This was aimed at dispelling foreign investor concerns, as in the recent past power shortages had severely affected their operations.

He admitted that there were outages in some parts of the country, but that they were caused by weak transmission systems, and not a supply shortage.

According to the Ministry of Industry and Trade (MoIT), the nation’s electricity generation in the first four months of this year rose 10.28 per cent on-year, reaching 41.9 billion kilowatt hours.

Hoang said this was enough to meet the current electricity consumption demand throughout the country. He added that current electricity reserves were around 20-30 per cent of total generation capacity.

Though Hoang did say there were no outages at this time, he did not address the issue of future outages as demand rises commensurate with economic recovery.

Power shortages have been one of the biggest concerns of foreign investors in Vietnam for many years. To deal with the problem, many companies such as Intel and Formosa built their own power plants to supply their manufacturing facilities.

The Vietnamese government has plans to build more new power plants to ensure national energy security, but most of the projects are moving slowly.

Tran Viet Ngai, chairman of the Vietnam Energy Association, said the government must push up the construction of power plants to increase supply by 2015, when he believes the country could face a severe power shortage due to rising demand.

In order to accelerate the construction of new power plants, last year the government ordered the MoIT to adjust the national electricity development master plan for the 2011-2020 period. The ministry, however, has not yet given any information on the revised content.

According to the government, the construction of many power projects, particularly those in the south, have been delayed, requiring additional supply from the north and central regions to be sent to the south. This threatens the supply security of the entire power system.