Mr Phuong Hoang Kim
Reporter: Electricity sector is having many SPPs that cannot generate their full capacity on the national grid because the local power transmission grid is overloaded. Is there an inaccurate planning when building more solar power projects in this area?
Mr. Phuong Hoang Kim: When studying about and planning the SP projects in Ninh Thuan, Binh Thuan, the Ministry of Industry and Trade has additionally planned projects of high voltage transmission lines from 110kV to 500kV.
However, in fact, SP projects are implemented rapidly in a short time, in which some projects have only been done within 6 months or even 4 months because they want to enjoy preferential rates of 9.35 Uscent/kWh before 30 June 2019.
Meanwhile, projects of high-voltage transmission lines usually take a long period of construction, in which 110kV taking about 2 years, 220kV lines taking 2 – 3 years and 500kV lines taking 3 – 5 years, causing the inconsistency between transmission lines and SP projects. .
In fact, SP investors are well aware that high-voltage transmission lines cannot be hastened, so currently many plants shall reduce generation capacity. However, it is expected that, by 2020, a series of power transmission projects will be completed, which will release all the existing solar power capacity in this area.
Reporter: Some private investors said that it is necessary to privatize the transmission grid investment. Does it face any difficulties, sir?
Mr. Phuong Hoang Kim: In the context that the investment of the power industry is large and currently the projects are not guaranteed by the Government, private investment in the power transmission grid is so welcomed. However, the current Law on Electricity stipulates that the power transmission field is a state monopoly and the current price is set by the State at 103 VND/kWh. Therefore, when the private investments are made in power transmission, it shall be determined that the transmission charges shall rapidly cover the investment sums, it is certain that this figure will be not as cheap as the current one of 103 VND/kWh.
When there is a transmission grid made by the private sector, if a third party wants to connect to the grid, how will it be handled if the investors say that, it’s full loaded and they disagree with further connection? There is no specific regulation on “who is responsible for coordinating the use of the transmission grid so that a third party can supply power to the end users?” Therefore, it will cause a waste of national resources on a common level. Hence, the power transmission field is still considered to be a state monopoly, which can be connected by the third party at reasonable cost and acceptable manner.
It cannot be refused that the private performance will be faster in terms of procedures, but it is finally still required to be covered in the electricity prices which are controlled by the State, hence, the prices are not easy to be increased. It should be noted that, when making investment, private investors would like to recover their spent capital as soon as possible. Once the problem is solved, they are willing to make more investments.
Reporter: So what do you think the State should do if the private sector would like to build a power transmission lines?
Mr Phuong Hoang Kim: The goal of business is efficiency and private enterprises are even more concerned about this issue. Therefore, it is necessary to balance and harmonize the benefits of electricity market participants including the State, enterprises and people.
Private enterprises when investing will offer a certain price rate. If the State buys electricity with high production costs and transmission costs, it is forced to sell electricity at a high price, but not to compensate for losses regularly. People then had to buy electricity at high prices. Those are issues that need to be discussed and considered comprehensively, not just think simply that the power sector should give or not allow private enterprises to invest in the power transmission field.
There are also things that seem simple, but actually they are very difficult. For example, how will Trung Nam Group invest in the power grid complying with technical requirements so that the power sector can receive and operate it stably and safely in the future? Or about handing over the project at a price of 0 dong (VND), the power sector also has no mechanism to undertake this property. The line that costs 0 VND, then how about the operation and maintenance costs later? This will be studied by the MOIT and will be reported to the Prime Minister, ensuring the general interests of electricity market participants.
Report: SP projects have been added to the Plan, with a capacity of up to 13,000MWp, and the actual commercial operation has just reached 4,500MW. So how will the remaining projects be implemented, sir?
Mr. Phuong Hoang Kim: In addition to the planning, the MOIT considered the connection to the transmission grid. In fact, in recent years, most projects have focused on Ninh Thuan – Binh Thuan region and are facing problems in power transmission. For other areas without problems in electricity transmission, the implementation of the solar power projects has not been done mainly because of problems in infrastructure and land site, so it is impossible to reach the target schedule of 30 June, 2019 to enjoy price incentives 9,35UScent/kWh.
At present, many power grid projects have been planned and the investors must calculate the investment efficiency, thereby they can continue their performance when the new prices are officially announced.
PV: So what will the target of developing solar power in the future be like, sir?
Mr. Phuong Hoang Kim: SPP only supports capacity during the daytime. According to statistics, the peak consumption during the day is different from that of the evening peak is 6% and solar power will offset this 6%. Because SP is time-consuming and unstable, when the cloud passes it can reduce the capacity being transmitted to the grid, SP development also requires capacity backup to be mobilized when there are any fluctuations in weather. For calculations, in order to mobilize 5,000MWp SP, it is necessary to have at least 1,500MW of rotating backup capacity, which means that it can be mobilized immediately once solar power drops.
Of course, this contingency cost shall be calculated in production costs and thus makes an increase in electricity prices. Therefore, traditional power sources are still needed to ensure stable power supply; the development of SP and renewable energy sources need to be in line with other power sources for ensuring efficiency when operating the whole power system.
Reporter: Thank you sir!