Total electricity produced and imported in the first half this year rose 11 percent year-on-year to almost 117.4 billion kWh, Vietnam Electricity (EVN), the country's biggest power producer and monopoly distributor, said in a new report.

Of this, 800 million kWh were produced using oil, which cost more than coal, the report said.

A kWh of oil power costs up to VND6,000 (26 cents, excluding distribution and transmission fees) to produce, but it is sold for just VND1,844.64 (7.9 cents), a loss of VND4,155 (18 cents).

EVN deputy general director Vo Quang Lam said that coal and gas supply is low and hydropower plants are suffering from a lack of water, so the company might have to mobilize up to 3 billion kWh of power produced from oil this year to meet demand, which is set to continue to rise in the last six months of the year. "This would be a huge financial challenge for EVN," he said.

To accommodate demand, EVN plans to put two thermal power plants and one hydropower plant with a total capacity of 1,480 MW into operation in the second half of this year,

The plants are Vinh Tan 4 Extension in the southern province of Binh Thuan Province, Duyen Hai 3 Extension in the southern province of Tra Vinh and Upper Kon Tum Hydropower Plant in the Central Highlands province of Kon Tum.

Also in the last six months, EVN will start construction of two solar power plants, the 50MW Phuoc Thai 1  in the central province of Ninh Thuan and 49 MW Se San 4 in the Central Highlands province of Kon Tum. 

Vietnam’s rapid growing economy is posing greater risks of power shortage. The Ministry of Industry and Trade said last week that the shortage is estimated at 6.6 billion kWh in 2021, nearly 10 billion kWh in 2022 and 15 billion kWh in 2023.

The reason for the shortage is that 47 of 62 proposed energy projects with a capacity of more than 200 MW each are behind schedule, the ministry said, adding that Vietnam might need to import 3.6 billion kWh in 2021 and 9 billion kWh in 2023 from Laos and China to meet domestic demand.

The World Bank has estimated that Vietnam needs $150 billion for energy sector development by 2030, as electricity demand is set to grow by 8 percent a year for the next decade.