power shortage,power price,solar power,renewable energy

On May 12, peak capacity was 41,208 MW and electricity consumption was 837.5 million kWh. According to the National Power Monitoring Center, electricity consumption on May 31 broke a record with peak capacity of 41,549 MW and consumed power output of 850.3 million kWh. In Hanoi, electricity consumption on May 31 was at a record high with a peak capacity of 4,530 MW and an electricity output of 90.3 million kWh.

However, those records were easily surpassed the next day. The numbers recorded on June 1 were 880.3 million kWh – an increase of nearly 25% compared to the same period in 2020, and more than 15% compared to the average in the week before the heat wave.

On June 2, a new "milestone" in electricity consumption was established. National electricity consumption capacity on June 2 set a new peak of 41,558 MW.

Compared to the peak in 2020, the national peak capacity on June 2 was 3,200 MW higher - equivalent to the total capacity of both Son La hydropower plant (2,400 MW) and Lai Chau hydropower plant (1,200 MW).

Fast growth

According to the Vietnam Institute of Energy, Vietnam is one of the world's fastest growing power systems. By the end of 2020, Vietnam's electricity system had a total installed capacity of about 69,000MW (including rooftop solar power).

There is a significant gap between installed capacity and actual generating capacity. Although the installed capacity is approximately 70,000MW, the maximum available generating capacity is only 41,558MW. That means a large amount of installed capacity cannot generate electricity. Although the actual generating capacity is never equal to the installed capacity, such a gap is worth noting.

Solar power is a reason for this situation. Solar power sources saw sudden growth in 2019-2020. From a negligible level in early 2018, solar power capacity reached 4,700MW by the end of 2019 and 16,700 MW by the end of 2020, accounting for nearly 26% of the total installed capacity of the power source.

However, solar power contributes very little to electricity output (about 4% of the total output of the entire power system in 2020) because it can only be generated during the day. It depends on the weather and is cut when the power grid is overloaded. Meanwhile, the peak load is usually at night (about 10 pm).

The power system needs stable and predictable power sources. It cannot rely on less stable power sources such as solar power. This does not negate the role of solar power, but rather only to defeat the "illusion" that renewable electricity can "carry" the whole power system. In fact, thermal power and hydroelectricity are still the pillar to ensure electricity consumption demand, which is an important factor contributing to keeping electricity prices at an affordable level for the majority of people.

 

Of Vietnam’s electricity production in 2020, coal-fired power contributed the largest proportion of 50% with 123 billion kWh, followed by hydroelectricity with 73 billion kWh, accounting for 29.5%, and gas-fueled thermal power with 14% or 35 billion kWh, solar power with 4.4%, and imported power with 1.2%. The rest 1% was from oil and other renewable energy.

In addition to domestic electricity, in 2020 Vietnam imported about 1.93 billion kWh from China and 1.14 billion kWh from Laos.

The worrisome future

To achieve the "peak" capacity of 41,558MW on June 2, power sources had to stretch themselves to the maximum to meet the demand. Many power companies reported overloading of power grids due to prolonged hot weather, leading to potential hazards for the grid.

Worryingly, this "peak" capacity was set in the context of the Covid-19 epidemic, when industrial production stalled, and restaurants, hotels, and tourist sites were closed, resultng in reduced power consumption. That is, if everything returns to normal as before the epidemic, the risk of power cuts is possible. In Hanoi, many apartment buildings and urban areas had to use generators during hot days.

According to the Electricity of Vietnam Group (EVN), in the period of 2021 - 2025, electricity demand will grow by approximately 8.9%/year, equivalent to an increase in electricity supply demand of 23.6-30.5 billion kWh/year.

However, the output of newly added sources is only about 6.1 to 16.7 billion kWh/year, much lower than demand. The reason is that many thermal power projects are behind schedule and wind power projects have been delayed after the preferential price mechanism ended in October 2021.

Currently, there is no information on incentive mechanisms for the development of renewable energy for the period after October 2021, so the progress of these power sources is still risky.

To ensure electricity supply in the 2021-2025 period, it is necessary to speed up the construction of power projects, including coal-fired and gas-fired power plants, and expand large hydropower projects. The Ministry of Industry and Trade also needs to consider a new pricing mechanism for renewable energy sources at a reasonable level. It is necessary to pay attention to wind power because this is a more stable power source than solar power when generating electricity both day and night.

Luong Bang

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