Lawmakers question electricity imports amid renewable surplus

Lawmaker Ta Thi Yen said that price negotiations between the government and renewable energy developers are still underway, meaning there is plenty of unused energy just waiting to be distributed.

“Hundreds of renewable projects that have been approved by the government are not connected to the national grid, while at the same time the economy is experiencing a power shortage and we’ve had to increase imports from Laos and China,” she told the National Assembly Thursday.

Dinh Ngoc Minh, a member of the National Assembly Economic Committee, said that many people have asked why 85 renewable projects with a total capacity of 4,600 megawatts have not been connected to the power grid given the dire energy shortage.

“If administrative procedures are determined by the government, why does it not connect the [renewable energy] projects to the grid instead of buying from China and Laos?” Minh asked.

“To which government body does this responsibility belong?”

In response, Minister of Finance Ho Duc Phoc said that he had discussed the matter with Minister of Industry and Trade Nguyen Hong Dien, who had said that Vietnam’s current power supply is already enough.

“If we already have enough supply, why were the projects approved for construction in the first place? And why don’t we cut power imports and use domestic sources instead?” Phoc demanded to know.

Vietnam has been importing power from Laos and China for years and the imports are part of the country’s long-term power plan, according to sources.

A memorandum signed between Laos and Vietnam in 2016 stated that Vietnam would import at least 3,000 megawatts from Laos by 2025 and 5,000 megawatts by 2030.

The industry ministry said earlier that the imports from these two countries have been increasing this year due to the shortage of water at local hydropower plants.

Eighteen reservoirs nationwide are nearly out of water, or have run out of water entirely, and 20 are at less than 20% of their reserve capacity. The amount of water stored by Vietnam as of May 21 was 5.5% lower than planned, according to government statistics.

Some have argued that imported electricity generally costs less than domestic production.

China sells power for Vietnam at 6.5 U.S. cents per kilowatt-hour, and Laos do so for 6.9 U.S. cents. These figures were 16.5% and 11.5% respectively lower than domestic prices in the first three months this year.

Meanwhile, price negotiations is still going on for renewable projects that have missed the deadline for incentive buying price. The industry ministry has recently approved temporary prices for 19 projects.

Lawmakers also questioned the government’s decision to hike power prices 3% starting on May 4. They also raised concerns over the VND26.2 trillion in losses that the national utility Vietnam Electricity (EVN) recorded last year.

Yen said that she didn’t understand why EVN recorded such losses. She rhetorically posited the question: could it have been because of leaders’ incompetence in running the company?

Minh said that power plants operated by EVN account for only 11% of total power generation in Vietnam, which means that the majority of power comes from private companies that seemingly haven’t raised their prices.

“If these companies made profits, why did EVN post losses?” Minh asked. “If they did not raise their prices, why did EVN?”