Investment stories of Samsung Electronics multinational company in Bac Ninh, Thai Nguyen, etc. and the subordinate role of the Northern Power Corporation (EVNNPC) in these stories have been and will be justifying the above-mentioned judgment.
Regarding this issue, Mr. Thieu Kim Quynh – the Chairman and President of the Northern Power Corporation (EVNNPC) said that: “To get such successful investment projects as the current FDI projects in Bac Ninh, Thai Nguyen, Vinh Phuc, Hai Duong provinces, etc. the power sector and the local authorities have taken one step ahead, because when preparing for doing businesses in Vietnam, foreign investors always take into account very prudently policies, mechanisms, regulations, human resources, infrastructure systems including power grids and power generation sources for realizing investments”.
How have the power sector and the provinces taken “one step ahead” in FDI attraction and FDI project implementation, sir?
A tripartite meeting among People’s Committee – Investor – EVNNPC is normally held before the investor makes investment decision on a specific project. In this meeting, the parties normally jointly take into consideration the province’s requirements, the investor’s demands for electricity, and how the power sector can meet these requirements and demands given the existing resources of the Corporation and its efforts. Only after the demands are met, can the project be realized.
The more capital investors put into their projects, the more investments the power sector has to make
The power sector plays an important role, however what the power sector contributes to realizing investment projects is normally not being adequately recognized although EVN is always behind the scenes to back up big projects in the FDI attraction highlights, sir?
The reality shows that the power sector has always actively and accountably participated in local economic development processes. For instance, in Bac Ninh province, right from the first days Samsung made their investments in the province of a few of USD billions and at the beginning of 2017, when they announced to “pour” additionally USD 2.5 billion, etc. the power sector has always observed closely all these movements in order to proactively prepare their network, generation investment plans to satisfactorily serve the operation of Samsung complex.
EVNNPC needs to consider appropriate investments in the power system to satisfy Samsung’s electricity requirements for the coming 10 to 15 years corresponding to their additional investment of USD 2.5 billion. In particular, Yen Phong Industrial Zone (Bac Ninh) – where Samsung locates their factory, currently only three 110 kV substations have been operating, today 5 substations should be put in place. The electricity provision is not only for the factory itself, as when such a big project with tens of thousands of employees as Samsung’s project come into operation, power grids need to be invested for expansion to serve satellite plants, industrial complex, or power grid rehabilitation is needed to serve the workers’ village, residential areas adjacent to Samsung factory, which is likely to amount to hundreds of billions of VND.
All the actual progresses that EVNNPC has persistently pursued and achieved over the past years have been acknowledged by many provinces.
Customers are central
Does proactive preparation of EVNNPC for significant customers and loads such as the above-mentioned FDI projects derive from the changing business mind of the power sector during the recent time, towards the motto “customers are central”?
When supply – demand balance changes, the power sector in general and EVNNPC in particular are obliged to change correspondingly, as it is the survival.
Regulations, norms on access – to – electricity duration, power supply recovery after failures, replacement of switchgears (for low and medium voltage networks), etc. have gradually documented and standardized for being practically applied and used as benchmarks for assessing professionalisms of power companies. In short, the power sector in the past was professional in power generation and power system operation rather than in retail business. Therefore, change of mind is needed in taking “one step ahead” serving all the customers.
What are difficulties and challenges that you have to cope with during electricity supply to the socio-economic development, particularly to big scale projects in provinces, sir?
As said before, in terms of power sale structure of EVNNPC, the proportion of electricity sales to the industrial and construction sector accounts for more than 62%, with the average tariff at only VND 1,494/kWh, and the tariff applicable is much lower if electricity consumption is at off-peak hours. A lot of cement and steel projects are concentrated in the North, which register to buy electricity at 110 kV voltage level with low price, and very large off-peak electricity consumption. With such a low tariff applicable for industrial zones and export processing zones, if no proper controls and arrangements are in place, we worry that electricity “export” situation may happen in our own territory.