Investing over VND 6,100 billion
In order to implement projects on “lighting up” islands, EVN had to actively mobilize a huge capital. Only in the period of 2013 - 2018, EVN invested over VND 6,100 billion to supply power from the national grid to island districts. In fact, projects on power supply to islands with high investment rates without financial efficiency have made EVN face many difficulties in convincing capital financers.
In addition to a part of finance from the budget, EVN has actively worked with international organizations and banks such as: the World Bank (WB), Asian Development Bank (ADB), German Development Bank (KfW), etc., to arrange ODA and preferential loans. At the same time, EVN has implemented forms of socialization, attracting all social resources to mobilize capital for projects on power supply to islands.
11/12 island districts across the country directly supplied power by EVN
Hardship in construction, operation
Overcoming difficulties in capital mobilization when formulating the project is really hard, implementing construction of cross-sea projects is also not easy. EVN and contractors, construction units have faced the harshness of weather on sea, storms, abnormal tidal conditions; complex construction conditions, entirely depending on geological characteristics of each area, etc.
Particularly, for the project of connecting the national power grid to Co To Island (Quang Ninh Province), although the pulling 110kV transmission line by hot-air balloon was carefully calculated and considered the most feasible option, when implementing it, contractors still have to “brainstorm much” due to abnormal development of marine climate, strong winds, and many ships and rafts, causing great difficulties.
As for the project on supplying power from the national grid to Lai Son island (Kien Giang province), up to 40% of the construction time that EVN carried out works under the condition of wind speed at level 5 and above. There were even periods of rough sea, the project progress seemed impossible to be completed “on schedule.” For the Spratly Islands, due to the geographic location far from the mainland and including many islands and island points distributed across on a vast marine area, the power supply to the Spratly Islands and DK1 Platform also faced many difficulties.
Completing the construction process, EVN faces the “problems” of operating the power systems in “Remote offshore places of the Fatherland”. The systems often suffer from harsh thunderstorms and storms. Additionally, due to the influence of marine climate, electric equipment on the islands is easily damaged due to the relatively high content of salt in the air, causing many risks for reliable operation of power systems.
Compensation for losses of more than VND 1,500 billion
For projects on power supply to islands, EVN is also under much pressure of balancing economic efficiency. Form the time of taking over and managing the direct electricity sale in island districts and communes until 2018, EVN compensated for loss at about VND 1,500 billion due to their use of in-place diesel power with expensive costs.
According to Mr. Tran Tue Quang - Deputy Head of Electricity Regulatory Department Authority of Vietnam (Ministry of Industry and Trade), the electricity price applicable to people in the districts and communes in accordance with the Government’s regulations is from only 8.9% to a maximum of 34% of the production cost of Power sector. Particularly, in some places, EVN bears huge losses with price being only 2.32% of the production cost. Specifically, in Spratly Islands, the cost of power production is up to VND 72,552/kWh, but in accordance with State regulations, EVN only sells at an average unit price of VND 1,635/kWh. In other island districts, with the same situation, EVN also bears entire losses, so that people in islands can buy electricity at the same price as those in mainland.
Chairman of EVN’s Member Council Duong Quang Thanh still affirmed: Despite many difficulties, the power supply to island districts across the country is always a crucial political task attached special importance to by EVN. The Group concentrates all resources on ensuring stable, uninterrupted and reliable power supply in island districts, with the goal of not only contributing to implement islands’ economic development targets, improving the quality of people’s living, but significantly contributing to ensuring national security and national defense, firmly protecting the country’s sovereignty.