Coal power balance back on the agenda

Since the beginning of the month, the north of Vietnam has been in its hottest period of the summer so far and local electricity shortages are becoming serious.

The Hanoi branch of Electricity of Vietnam (EVN) has updated the daily power cut schedule for the entire city, which constitutes the epicentre of the heatwave, with the highest temperature measured reaching over 40 degrees Celsius, according to the National Centre for Hydro-Meteorological Forecasting.

“According to EVN’s calculations, the north of the country will lack about 1,500-2,400MW during some peak hours or extreme weather in 2022,” predicted Vo Quang Lam, deputy general director of EVN, last November.

“In 2022, electricity demand for socioeconomic development will be at a high level,” Lam added, as the economy gradually recovered from the pandemic and coal mines became increasingly exhausted.

Each year, Vietnam exploits about 40-47 million tonnes of raw while commercial coal reaches about 37-45 million tonnes per year. Coal output for power generation more than doubled from about 32 million tonnes in 2016 to about 70 million tonnes in 2021, as data from the Petroleum and Coal Department under the Ministry of Industry and Trade (MoIT) suggests.

While discussing coal imports with the Minerals Council of Australia in April, MoIT Minister Nguyen Hong Dien said, “Vietnam is short of coal for electricity production. Import demand stands at about 18-25 million tonnes this year.”

Meanwhile, global coal use increased to a record level, pushing up coal prices on the world’s markets. The coal price on May 30 was recorded at $401 per tonne, up 33.76 per cent on-month and 237.26 per cent over the same period last year, according to data from global economic information provider Trading Economics.

The energy price crisis and domestic demand pressure has caused many major economies in the world, especially Europe, to plan to withdraw production restrictions on coal power plants. Meanwhile, Vietnam is making efforts to fulfil its commitment to achieving zero carbon emissions by 2050.

Nguyen Anh Dung, the GIZ’s 4E project senior officer, commented last week that major countries could spend several billion US dollars on restarting coal power. “However, Vietnam cannot follow this approach. The country is affected by global coal and petroleum markets, but only in the short term.”

Dung – who has conducted several research papers on policies to promote innovation in industries at the Ministry of Science and Technology – found that Vietnam needs a roadmap to close coal power plants, and this closure depends on how Vietnam achieves its net-zero targets.

Returning to coal power, Dung argued, could be “a temporary solution of large economies before switching very quickly to renewable sources of electricity.”

The problems of the world’s energy market would not affect the general trend in 10-20 years, Dung said. “Germany is now restarting some coal-fired power plants, but maybe in the next few years, when gas supplies gradually stabilise, it will return to green energy sources.”

Vietnam has no short-term solution to replace coal-fired power. According to the Electricity Regulatory Authority of Vietnam (ERAV) under the MoIT, the total installed capacity of the power system stands at almost 79,000MW, of which most comes from coal-fired power (32.28 per cent) and hydroelectricity (22.23 per cent). Solar power and rooftop solar power, meanwhile, account for 11.28 and 9.86 per cent, respectively.

Prime Minister Pham Minh Chinh at the end of last month asked the MoIT, EVN, and Vietnam Oil and Gas Group to quickly calculate the total amount of gas to be exploited.

Some calculations pointed out that, when operating the O Mon I-IV plants, all of which belong to the O Mon Power Centre, carbon emissions could be cut by half and thus ensure zero carbon emissions by 2050.

The PM also urged Power Generation Corporation 2 under EVN to research, exploit, and invest more in wind and solar power projects in the region and remove coal from the energy mix.

In the latest draft of the Power Development Plan VIII, the installed capacity of coal-fired power by 2030 is reduced by 8 per cent compared to the draft before COP26, with the note that coal power could be replaced by biomass and hydrogen energy. In case biomass and hydrogen can replace coal, there could be no more coal-fired power plants by 2045.

Now the ERAV is trying to resolve issues related to grid overload and capacity loss in the transmission process, mobilisation in case of excess power, forecasts of renewable energy sources, and mechanisms for the development of battery energy storage

systems for renewable energy to build and transform the grid system towards using more renewable energy sources.