Vietnam Electricity thermal power plants face coal shortage

Thermal power plants run by state utility Vietnam Electricity (EVN) are expected to receive 17.98 million tons of coal in 2023, but that will leave a shortfall of about 1.5 million tons.

At a meeting to discuss coal supplies last Friday between EVN and state-run mining Vinacomin, representatives of the utility added that the latter is set to supply 16.91 million tons of coal for EVN this year, reaching only 97.1% of its year contract.

To deal with the shortfall, EVN will have to use its coal reserves, which stand at just 1.5 million tons at the end of 2022.

EVN also noted the quality of blended coal Vinacomin will supply in 2023 might reduce the operational stability and output of its power plants, especially during the peak period of the dry season in 2023.

Vinacomin said it expected its coal inventories at the end of 2022 would be only about 1.5 million tons, much lower than the same period last year.

Coal demand for domestic economic development is high, while the price of imported coal has continuously increased to record levels, putting great pressure on the mining group, it added.

EVN deputy general director Ngo Son Hai said that the low level of coal inventories at Vinacomin and thermal power plants is a worrying situation, which will directly affect the plants' power generation capacity, especially in the first six months of 2023 when demand surges.

EVN, the country’s sole power distributor, has been calling for a market mechanism to set power prices, as costs of input materials have been increasing while power retail prices have not changed since 2019, said CEO Tran Dinh Nhan. Nhan stressed the price of coal has skyrocketed 600% since the beginning of 2021, while the price of oil has risen in double digits.

The state utility is expected to incur a loss of VND31.36 trillion ($1.33 billion) this year, including VND64.8 billion from higher costs despite belt-tightening and maximizing low-cost electricity generation (hydropower).

In the first 10 months of this year, the power grid in Vietnam generated 225.98 billion kWh, up 6.1% year-on-year. That included 86.56 billion kWh from coal-fired thermal power, or 38.3% of the total; 82.42 billion kWh of hydropower (36.5%); 29.87 billion kWh of renewable energy (22.65 billion kWh of solar power and 6.91 billion kWh of wind power, or 13.2%); 23.87 billion kWh of gas-fired power (10.6%); and 2.68 billion kWh of imported power (1.2%). EVN generated 103.89 billion kWh, or 45.97%.