With a policy on reducing fossil energy use and striving for zero emissions by 2050, plus creditors’ refusal to lend money to ‘dirty-power’ projects, investors have no more opportunities to develop coal-fired power. Their only choice is to shift to gas-fired projects.

A representative of Cong Thanh Thermal Power project in Thanh Hoa told VietNamNet that he has become impatient waiting for approval from agencies to shift to an LNG project which could generate electricity before 2028.

“We have got everything ready, from site clearance, port, leveling, and survey drilling to connection lines. BP group will provide gas, GE the turbines, and Actis is in change of financial arrangement. Now we just need a nod from the government and the Ministry of Industry and Trade (MOIT) to start the project immediately,” he said.

He said that he doesn’t need preferences from the state, even though other LNG-fired project developers all demand privileges. 

For example, they want confirmation in PPA (power purchase agreement) that 90 percent of their capacity will be used. Some investors even request the state to act as a guarantor for Electricity of Vietnam (EVN) and fulfill payment obligations if EVN breaks its commitments, and to compensate for damages if EVN falls into insolvency.

Other investors require want to be sure that they can convert at least 30 percent of the project’s revenue into foreign currencies based on the State’s forex balancing capability

“We don’t need these things,” he said.

In a document from the Government Office to MOIT dated July 11, Deputy Prime Minister Tran Hong Ha assigned the ministry to coordinate with relevant agencies to handle cases beyond its capacity and report to the Prime Minister.

However, to date, the investor still has not received a notice about a working session with MOIT on the issue.

According to Bui Tuan Tu, deputy head of the Nghi Son Economic Zone (EZ) and Thanh Hoa industrial zone (IZ) Management Board, there are sufficient documents for Cong Thanh project to shift from a coal-fired project to LNG-fired.

Cong Thanh is not the only project that wants to shift to LNG-fired.

According to MOIT, there are five coal-fired power projects which have been going slowly, because of changes in shareholder structure and problems in capital arrangement. 

The total capacity of the five projects is 7,220MW. The projects are Quang Tri Thermopower (1,320MW), Cong Thanh Thermopower (600MW), Nam Dinh I (1,200MW), Vinh Tan III (1,980MW) and Song Hau II (2,120MW).

Of these, Quang Tri power plant has been canceled following a document from EGATi from Thailand, the investor of the project, on the cancellation. Quang Tri provincial authorities have suggested that the power project use LNG instead of coal.

Many other localities also want to replace coal-fired power projects with LNG.

LNG to ease electricity shortage

According to experts, the 7,220MW of coal-fired power plants which are on the waiting list may not be completed as credit for coal-fired power development is restricted.

Nguyen Thanh Son, a respected energy expert, warned that coal-fired power projects are not feasible if the investors cannot mobilize capital.

In such conditions, according to Le Hai Hung from the Hanoi University of Science and Technology, switching to gas-fired power is a must. The emission volume from LNG-fired power plants is lower than coal-fired power, and even lower than associated gas.

“We are building Thi Vai Port to import LNG. LNG power is relatively safe and ensures power security for the next 10-20 years,” Hung said.

Hung said that international creditors are turning their back on coal-fired power. Meanwhile, Plan 8 has set a roadmap for the gradual reduction of coal-fired power. It will be much easier to borrow capital for LNG power projects.

“The World Bank and international financial institutions have stopped lending to fund coal-fired projects. They prioritize lending to projects using renewable energy. So, it would be easier to get loans for LNG power plants,” Hung said.

He said that management agencies need to approve switching from coal-fired power to LNG projects soon and create favorable conditions for investors.

“The agencies that act slowly and hinder the switch will be contrary to environmental protection policies,” he said.

Luong Bang