Pha Lai Thermal Power Plant. Pha Lai Thermal Power JSC, which runs the plant, made a net profit of 155 billion VND in third quarter of 2022. (Photo: baodautu.vn)
Hanoi (VNS/VNA) - Electricity demand has been growing steadily since 2021 and is expected to surpass domestic output in the short term.
According to VietinBank Securities (VBS), electricity demand in Vietnam is projected to grow by 8.5% annually in the next five years, mostly coming from manufacturing and construction sectors.
The fast-paced demand is forecast to exceed domestic output by 13.3 billion kWh in 2023 and 27.7 billion in 2025, leaving the country with no choice but to import liquefied natural gas and generate more thermal power to pick up the slack.
VBS did not expect renewable energy to contribute much to the output between 2023 and 2025 as there are still a number of obstacles in the way of green projects. However, the transition to renewable energy has been well underway and this type of energy is expected to take the front seat after 2025.
Vietnam Electricity was concerned that the backup capacity rate would drop steadily after 2023, leading to electricity shortages in the short term.
Specifically, the backup capacity rate is projected to fall to 18% in 2025 with electricity output falling short of demand by 27.7 billion kWh. In the North, the rate is likely to stay as low as 10% during the period.
Mirae Asset said the country has planned to purchase electricity from Laos to fill the supply-demand gap.
To this end, the Nam Mo-Tuong Duong Electricity Transmission Line has been built to transmit electricity from Nam Mo Hydropower Plant to Vietnam. The line has reached 91% of its completion and is slated to operate in November.
On the bright side, electricity producers raked in huge profits in Q3/2022 on the back of the mounting power demand.
Mien Trung Power Investment & Development JSC (HNX: SEB) made revenue of 66 billion VND, up 50% year-by-year. Its after-tax profit hit 31.3 billion VND, soaring over one-hundred-fold against last year.
Nuoc Trong Hydropower JSC (HNX: NTH) followed suit with an after-tax profit of 10.4 billion VND, over twenty times higher than the figure in 2021. A Vuong Hydropower JSC was riding high with earnings of 180 billion VND, nearly fourfold more profitable than that of the previous year.
Vinh Son-Song Hinh Hydropower JSC (HOSE: VSH) earned 220 billion VND, in contrast to Q3/2021 when it was running at a loss of 42 billion VND. Pha Lai Thermal Power JSC (HOSE: PPC) posted a net profit of 155 billion VND, against a loss of 35 billion VND in Q3 last year.
Other producers that made big money in Q3 amid rising power demand include Hai Phong Thermal Power JSC with an after-tax profit of 41 billion VND, Quang Ninh Thermal Power JSC with 147 billion VND, Ba Ria Thermal Power JSC with 86.5 billion VND, and Thac Ba Hydropower JSC (HOSE: TBC) with 105 billion VND.
ACB Securities said energy security is a top priority for the Vietnamese Government since the energy sector is the country's engine of growth.
The company also said the sector's outlook is bright in the short term thanks to firms' post-pandemic recovery./.