Big demand
At Decision No. 4711/QD-BCT approving Power System Operation Plan in 2017 issued by the Ministry of Industry and Trade, it is clearly specified that given the projected generation output in the year of 2014 billion kWh, the three main generation sources including hydropower, coal fired thermal power and gas turbines contribute 32.3%, 42%, 22.2% respectively to this output. The remaining output will be generated from other sources such as oil fired thermal power, or imported or others.
An expected reliance on a robust growth of such clean energy sources as gas turbines is not very promising, because no new gas resources are found available and even some existing gas resources experiences a reduction in their production.
The proportion of coal fired thermal generation has risen from 17.5% to 30.4% between the years 2010 - 2015. The photo shows Vinh Tan Thermal Power Complex (Binh Thuận province)
Associate Professor and Doctor Truong Duy Nghia, Chairman of Vietnam Thermal Science and Technology Association states that hydropower is the cheapest generation source although its initial investment cost is higher than that of coal fired thermal generation, construction duration of hydropower projects is not time consuming, therefore all the countries possessing large potential for hydropower development have absolutely harnessed this type of energy. The Ministry of Industry and Trade’s statistics show that in 2005 the total installed capacity of power system was 11,600 MW of which hydropower accounted for 38%; coal fired thermal 13%, gas turbines 45%, the remainings were oil fired and diesel generation sources. As of 2014, the total installed capacity of power system tripled to 34,600 MW, of which hydropower represented 40%, coal fired thermal power 28%; gas turbines 22%; small hydropower – wind power – diesel generators 5%.
Considering the generation output during the period 2010 - 2015, the share of coal fired thermal power grew from 17.5% to 30.4%; gas turbines declined from 49% to 29.5%; hydropower slightly rose from 27.6% to 38%, and other energy srouces trimmed down from 6% to only 2.1%.
In order to satisfy the economic growth, the annual power load growth is forcasted at 10 - 11%, in orther words around 4000 – 5000 MW of new capacity will be needed every year, which cause a big challenge for the power sector in seeking for new generation sources.
Coal fired thermal generation is inevitable
Associate Professor and Doctor Truong Duy Nghia says that every generation source has its own advantages and disadvantages, countries will go for power generation sources suitable for their actual conditions.
The total investment capital for developing power sector in the period 2016 – 2030:
The total investment capital for developing power generation sources and power networks (not including BOT generation projects) during 2016 – 2030 will be approximately USD 148 billion in aggregate, which will be split into different phases:
- 2016 - 2020: Approximately USD 40 billion in aggregate, or USD 7.9 billion per year on average. Of which, 75% will be for generation development, 25% will be for network development.
- 2021 - 2030: Approximately USD 108 billion in aggregate, or more than USD 10.8 billion per year on average. Of which, 74% will be for generation development and 26% for network development.
Source: Decision 428/QD-TTg dated March 18, 2016
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Hydopower generation has low production cost and affordable investment cost, however not every country or every place can develop hydropower. Furthermore, operation of hydropower plants will remarkably depend on weather conditions, normally a hydropower plant runs 4000 hours per year on average and requires a large land area for reservoir construction.
A gas turbine has such advantages as short construction duration, quick start-up, high efficiency, no emission of dusts and SO2, its operational availability of about 6500 hours per year, however its fuel cost is high, operation and maintenance cost is up to twice as high as that of coal fired thermal generation, spare parts are undurable but require high cost for replacement.
Solar energy is clean and emits no hazardous substances, its investment cost is steadily decreasing (currently a little bit higher than that of coal fired thermal generation), its operation and maintenance cost is low with high automation level, in spite of this its operational availability is only around 1,500 hours per year and solar energy can develop only in some certain places.
Whereas, coal fired thermal power generation has investment cost of about USD 1,500 per kW, operational availability of 7,500 hours per year, with production cost only higher than hydropower, currently maintains to be a key generation source in the world.
Selection of clean technologies and investors
Admitting that coal fired thermal power generation has the most severe emission problem, Doctor Nguyen Manh Hien, former Director of Institute of Energy views that thanks to advanced technologies, emission will be controlled.
“With the current coal fired thermal power generation technologies and precipitators, coal fired power plants are no longer dirty”, emphasized Doctor Nguyen Thanh Son, the main concern now is whether investors are “clean” or not!
In ASEAN region where installed capacity is projected to increase by 174 GW in the coming decade (about 6% of the total capacity needs in the world), nearly twice as much as the current capacity figure of 200 GW, coal fired thermal power plants will account for 38% of the total generation output. Therefore, cleaner technologies are being taken into account.
Introducing appropriate options
It is a common desire of every country in their development cause that the most green, clean, advanced and modern technologies are applied in their projects. However, they have to weigh up appropriate options to both meet the increasing energy demand with reasonable costs and strict regulations on emission.
In Vietnam, the current retail tariff does not fully comply with a perfect competitive electricity market mechanism and has kept unchanged during the two recent years. In addition, feed in tariffs of such renewable energy sources as wind power, solar energy are quite higher than the present average retail tariff, which cause the challenges in attracting investment in generation sources to obtain an additional capacity of 4000 – 5000 MW every year to satisfy the stable electricity supply objective for socio – economic development to be more stressful.