A plan proposed by the National Load Dispatch Center (NLDC), under the national utility Vietnam Electricity (EVN) intends to cut 180 million kilowatt-hours per month in the third quarter and 350-400 million kilowatt-hours per month in the last quarter.

This time frame corresponds with the expected third and further quarter annual flooding in the northern, and central-southern regions, respectively, when hydropower power supply would increase.

The proposed amount of 1.74 billion kilowatt-hours is 34 percent higher than EVN’s previous plan to cut 1.3 billion kilowatt-hours of renewable energy this year.

Cutting solar and wind power has been the go-to solution for EVN since last year, after a surge in the number of such plants strained the national grid.

As solar power plants depend on the number of sunshine hours during the day, authorities still have to rely on traditional sources such as coal, gas and hydropower to ensure grid stability.

This is why solar power, whose output could fluctuate by up to thousands of megawatts in seconds depending on the intensity of sunlight, is the first to be cut when there is an overload.

Another reason for the output cut is slower growth in consumption. Last year, due to Covid-19 impacts, demand grew by less than 2.5 percent compared to 10 percent in previous years.

The cuts have hurt renewable energy developers. A leader of a solar power company in the central province of Ninh Thuan, who asked not be identified, said his plant has seen output cut since the end of last year.

The company has to bear losses of hundreds of million Vietnamese dong (VND100 million = $4,300) each month, not to mention suffer interest payment to banks, he added.

The Phu Lac Wind Power Plant in the central province of Binh Thuan is also suffering output cuts.

The plant’s CEO, Bui Van Thinh, said both developers and EVN were victims in this situation as the number of new plants exceed the government’s original plan, while there is a lack of synchronization in source and transmission investment.

The transmission line has reached its max capacity as dozens of plants come online, he said, adding: "Our revenues have plunged and the situation is tense."

Although energy authorities had earlier warned of power shortages this year, the boom in renewable power development has in reality created an oversupply, creating problems for EVN.

Solar capacity surged to 19,400 megawatts-peak at the end of last year, accounting for 25 percent of total power capacity. This capacity came from over 100 farms and 101,000 rooftop constructions.

Last year, authorities cut solar power by a total of 365 million kilowatt hours after the Ninh Thuan and Binh Thuan grids were overloaded.