Electricity imports from Laos and China account for only a fraction of the demand in northern Vietnam, where shortages are expected, according to the Ministry of Industry and Trade.
Vietnam has been buying electricity from China since 2005 and from Laos since 2016. It now imports around 4 million kilowatt-hours from the former and 7 million kWh from the latter daily, deputy minister Dang Hoang An said at a recent press briefing.
The demand in the north is for 445-450 million kWh a day, he said after lawmakers earlier this week questioned the government on why electricity imports are needed while domestic renewable sources remain unused.
Vietnam plans in turn to export electricity to other countries, he said.
This year the imports are vital as hydropower reservoirs have low storage due to drought.
The imports are cheaper than domestic production. China sells to Vietnam at 6.5 U.S. cents per kilowatt-hour, and Laos at 6.9 U.S. cents, 16.5% and 11.5% lower than domestic prices.
Another reason for the import is that transmission of electricity from the central and southern regions, where 90% of renewable power is generated, is difficult since the main grid has run out of capacity, Bui Van Thinh, chairman of the Binh Dinh Wind Power Association, said.
China and Laos are closer to northern Vietnam, and buying from them is necessary, he added.
Analysts said upgrading the main transmission line would take years, and electricity from Laos and China is cheap, making it the best available option.
An also said many renewable power plants have not been added to the grid because they have not completed the paperwork.
While untying knots to increase power supply is necessary, there are legal criteria all projects must meet, he said.
For instance some plants are built on lands not meant for commercial projects such as rubber farms. They have to be penalized for the violation before being allowed to operate, he pointed out.
Renewable power plants with a capacity of around 4,600 MW remain off-grid mostly because they have not reached a deal on pricing with the government.
The industry ministry recently approved a temporary price so that they can be quickly linked to the national grid.
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