Private Investment: The Key to Energy Development (20/01)
20/01/2012 - 17 Lượt xem
What were major energy contributions to economic development in
2011?
For any country, energy is always a vital segment of the
economy. The energy industry in Vietnam made great efforts to contribute to
economic development in 2011.
Specifically, despite many difficulties in 2010,
including the low water level in many hydropower lakes, the power industry took
power saving measures to ensure sufficient power for production and domestic
use. Commercial power production amounted to 93.8 billion kWh in 2011, marking a
9.52 percent increase from a year ago. Of this, power for industrial production
and construction increased 13.9 percent and accounted for 52.9 percent of total
power supply; power for trading facilities, hotels and restaurants, 8.4 percent
and 4.5 percent; and power for domestic use, 6.3 percent and 36.1 percent,
respectively. Important decisions related to the power industry took effect in
2011, including Governmental Decision 37/2011/QD-TTg, regulating the price of
power in compliance with the market mechanism. A competitive power market was
launched on July 1, 2011. The changes are expected to motivate the development
of the power industry and to ensure sufficient power supply.
Oil and gas exploration and extraction was fairly stable
in 2011. Crude oil production was 15 million tonnes increasing 0.2 percent from
2010-2011. Natural fuel gas amounted to 8.9 billion cu.m, and liquefied
petroleum gas 531,800 tonnes. Particularly, the Dung Quat Oil Refinery worked
fairly stably producing about 5.6 million tonnes of gasoline and oil in
2011.
Together with the power and petroleum sectors, the coal
mining industry also worked well in 2011, producing 47.8 million tonnes of clean
coal and increasing four percent from 2010-2011.
The energy sector continued to play a major role in
making profit from exports. For example, crude oil took second place among
Vietnamese major exports with revenue at more than US$7 billion in
2011.
Capital shortage is currently one of the biggest
barriers for the energy sector. However, work started last year on construction
of many private large power investment projects. What role would the private
sector play in solving capital shortage for the power sector in the near
future?
Because Vietnam is developing fairly rapidly the demand
for energy in general and electricity in particular is always higher than
supply. Power projects require tremendous investment capital. For example, an
average power plant would usually cost US$2-2.5 billion, or an oil refinery
would need about US$10 billion in investment capital. Vietnam need to build many
energy projects in the next 10-20 years to keep up with the growing need of
energy for economic development. The power sector in particularly would need
almost US$50 billion in investment capital in the next 10 years. However, state
budget investment would be insufficient. For this reason, domestic and foreign
private businesses would play an important role in investing to develop the
energy sector.
Following the State's policies, investment in
development of energy projects has progressively been expanded to non-state
economic sectors, particularly the private sector. Currently, foreign investors
are developing 11 Build-Operate-Transfer (BOT) thermopower projects in Vietnam
at a cost of US$2-2.3 billion per project. Two BOT projects - Phu My 2-2 and Phu
My 3 power plants - were built at a total cost of about US$1.5 billion and are
currently operational. The Mong Duong 2 and Hai Duong thermopower projects are
also underway, and construction of these plants would cost almost US$5 billion.
We believe that after the power market is officially launched in the near future
following the market-based power pricing policy, private investors would play an
even more important role in developing energy projects.
Private investors have also participated in many
renewable energy projects. What do you think about the future of renewable
energy in Vietnam?
Vietnam has potential for development of renewable
energy. Statistics show that Vietnam has great energy potential, including
almost 9,000MW of wind power, 7,000MW of small hydropower plants, 800MW of
biomass power, and 300MW of geothermal power. However, the country has developed
a small part of the potential through small hydropower, wind power and biogas
projects. This explains why the cost of renewable energy is fairly high when
compared with the cost of power made from coal, natural gas and water.
Prime Minister Nguyen Tan Dung dispatched Decision
37/2011/QD-TTg on June 29, 2011, regarding the mechanism to support the
development of wind power projects in Vietnam. The Ministry of Industry and
Trade is looking to submit the Prime Minister drafts on a legal framework and
mechanisms to help develop sources of solar energy, biomass energy and more.
Together with the itinerary to build a competitive power market and to improve
state support policies and mechanisms, I believe that Vietnam would make the
most of potential for renewable energy development.
What policies would be continued in the short run to
attract private investors in the power sector in particular and the energy
sector in general?
Following the National Power Development Plan for
2011-2020, with a Vision to 2030, power plants will have a combined capacity of
about 75,000MW by 2020 and 146,800MW by 2030. It is expected that total
investment in the power sector will be US$123.8 billion in 2011-2020.
Electricity of Vietnam (EVN) would be able to arrange about 47 percent of total
investment capital, and the rest should come from other economic sectors. To
achieve the goal, the Ministry of Industry and Trade is taking steps to
diversify forms of investment in the development of power resources following
the itinerary for reforming the Vietnamese power sector, in order to increase
competitiveness and economic efficiency.
Major measures to raise investment capital for power
development in the short term are (1) to step by step increase financial
capacity of power companies by increasing work efficiency and ensuring
sufficient equity capital for investment development, (2) to develop financially
reputable power groups/corporations to reduce the cost of raising capital for
power projects and to raise internal capital without the Government's support
and (3) to raise capital through bond issuance at home and abroad to invest in
power projects.
One of major steps for the near future is to apply a
market-based pricing mechanism in the areas of power, coal, and oil and gas to
ensure that power production businesses can reinvest and expand investment in
power resources and power networks. State businesses will be equitized (i.e.
become joint stock companies) to make them able to increase investment capital
for power infrastructure projects. In addition, domestic and foreign joint
ventures will be fostered to draw more investors. The sector will also attract
foreign direct investment (FDI) capital, official development assistance (ODA)
capital, foreign commercial loans, supplier credit and more for power sector
development.
We hope that with comprehensive policies, tough
direction by the Government, ministries and related agencies, the energy sector
will develop strongly and steadily in the time to come to keep up with economic
development need./.
Source: SaigonTimes.
Source: SaigonTimes.
