Decision approving Power Plan VIII – Looking back after 1 year

Decision approving Power Plan VIII – Looking back after 1 year

Electricity Planning VIII was approved by the Prime Minister in Decision No. 500/QD-TTg, dated May 15, 2023. Up to now, it has just been 1 year, but the implementation of projects still has many problems (except for the 500 kV Quang Trach – Pho Noi line), which was started in early September 2023. To suggest a solution to remove this deadlock, the Scientific Council of Vietnam Energy Magazine has researched and reviewed 16 basic items in the Planning and initially proposed ‘immediate addition’ and ‘immediate promulgation’. ‘ some legal documents to ‘immediately implement’ projects. We look forward to receiving comments from readers.

According to the law, after 10 years, when the National Electricity Development Plan for the period 2011-2020 ends, the electricity industry will again base itself on the National Electricity Development Plan for the period 2021-2030, with a vision to 2050. (referred to as Power Plan VIII) to build power sources and grids to serve the country’s economic development plan. However, due to the impact of the Covid-19 pandemic and a number of other subjective reasons, as well as changes in policies and goals, it was not until May 15, 2023 that Power Plan VIII was approved.

Unlike before, Power Plan VIII is an “open” plan – when the list of power source and grid projects is not specifically listed in order of construction and commissioning time. After being approved, the Ministry of Industry and Trade prepared a Plan to implement Electricity Planning VIII and the Prime Minister approved it in Decision No. 262/QD-TTg dated April 1, 2024, after more than 315 days ( from the date the Planning is approved). Thus, the implementation time of Power Plan VIII is only 6.5 years, compared to 10 years of this period.

So, can Power Plan VIII be implemented as required?

Consider 16 basic items in Power Plan VIII:

1. Construction schemes/projects, as well as improving policies and laws: There are 7 projects, implementation time is from 2023-2025 and it is hoped that they will be on schedule.

2. Projects/projects to strengthen scientific and technological capacity, build basic research centers and development centers to be implemented from 2023-2030. With the above time, it is hoped that the projects will be implemented on schedule.

3. Projects/projects to train and improve the quality of human resources from 2023-2030. With 6.5 years left, implementation needs to be urgently implemented to hopefully achieve results by 2030.

4. Offshore wind power capacity by region: Currently, the implementation plan only states by region and capacity scale, and has not yet selected an investor to implement a specific project. It can be said that it will be very difficult to ensure that offshore wind power projects with a total capacity of 6,000 MW are put into operation by 2030, because from the time of project investment preparation until the time of putting into operation this power source is not less than 7-8 years, while the remaining planning time is only 6.5 years.

5. Onshore wind power projects (on land and near shore): If these projects are licensed for investment, their ability to meet schedule is appropriate.

6. Capacity of small hydroelectric power sources by locality: The plan lists the capacity of small hydroelectric power projects by locality, but does not name the project or specific investor. On the other hand, the new regulations on forest land conversion are very complicated and require a long time to apply for permission. Therefore, if we want to achieve total capacity from small hydropower sources by 2030, we need to urgently require localities and investors to participate in order to hope to achieve the plan.

7. Biomass power capacity by locality: Although from 2023 to 2030 it is only stated that “the whole country will increase by 766 MW”, the ability to properly implement the plan is relatively difficult due to many procedural difficulties, Regulations and purchasing prices for biomass electricity are not really attractive.

8. Capacity of power sources produced from waste by locality: From now to 2030, an additional 1,112 MW of capacity will be increased, but the ability to execute as planned is not high (as in the case of biomass power mentioned above).

9. Rooftop solar power capacity by locality: Currently the biggest problem is that according to the request of the Ministry of Industry and Trade, if connected to the grid, EVN only records and does not pay (no trading). leading to difficulty attracting investment from people, businesses, factories, and offices. On the other hand, not allowing third parties (other than EVN) to invest in self-produced and self-consumed rooftop solar power systems to sell electricity to on-site industrial households also hinders the development of this model.

The question here is: Enterprises that produce export products want to have a “green electricity” certificate, but do not have enough technical capacity to operate rooftop solar power, why not leave it to the outside party? Third business cooperation? If there are appropriate legal regulations, self-produced and self-consumed rooftop solar power can be developed instead of sending rooftop solar power to the grid. (Currently, there are many businesses investing in this model and wish to complete business registration licensing procedures).

10. Domestic gas thermal power projects and LNG gas power projects: The biggest obstacle in negotiating the power purchase agreement (PPA) between the project investor and EVN is the ratio of electricity through the power purchase contract long-term and electricity prices for gas power projects. This problem needs to be resolved soon so that 22,400 MW of LNG gas power can be put into operation by 2030.

11. Coal thermal power projects: All face difficulties in arranging capital because major countries have cut off credit sources for coal power. Without a breakthrough in capital, the possibility of these projects being put into operation by 2030 is not feasible.

12. Cogeneration power source projects, power sources using residual heat, blast furnace gas, by-products of technological lines in industrial facilities and medium and large hydropower expansion projects: Hopefully the This project is implemented on schedule.

13. Pumped storage hydropower projects: Bac Ai Pumped Storage Hydropower, capacity of 1,200 MW is under construction and likely to be put into operation in 2029 (1 year behind schedule), while Tich Hydropower Phuoc Hoa power currently has no investor. The possibility of putting into operation 2,400 MW in 2030 is not feasible.

14. Storage battery projects: Currently the investor is unknown and there is no electricity price for storage. Therefore, the goal of having about 300 MW of battery storage put into operation by 2030 is a big question mark.

15. Power transmission grid projects: Procedural problems in selecting investors, transmission prices… so although the Electricity Law allows private economic sectors to participate in investment, there are no regulations. Legal documents guiding implementation. Up to now, no non-state enterprises have participated.

With the volume stated in Electricity Planning VIII on the transmission grid being very large, but time is running out, the ability to implement transmission projects is difficult to achieve as set goals.

16. Connection projects to release capacity of power sources (including at distribution voltage level): Currently, the location of the power source is unknown, the investor is unclear, and the mechanism for selecting the investor is unclear. Deployment investment… so there is a possibility of not ensuring synchronization in the construction of power sources, power grids and transformer stations.

Under time pressure for project planning and progress:

Firstly: Competent authorities need to immediately issue legal documents related to mechanisms and policies regulating LNG gas power, offshore wind power, direct power purchase and sale mechanism (DPPA), solar power roof (including self-produced and self-consumed), guidance on choosing investors for power source projects, transmission and distribution grids.

Second: With offshore wind power, due to many missing legal regulations, it is recommended that the National Assembly consider promulgating a specific, pilot mechanism to both deploy early and learn from experience to expand the scale, while Continue to complete legal documents.

Third: The Decree on encouraging self-generated and self-consumed rooftop solar power needs to consider allowing a third party to invest in a solar panel system to sell electricity to on-site businesses (even without generating it onto the grid, or broadcast to the grid is not paid).

Fourth: Supplement documents and circulars to address transitional renewable energy projects and outstanding projects (which have been and are continuing to be completed).

Fifth: Simplify construction investment processes, decentralizing localities and businesses to appraise projects, reducing procedural congestion time. Along with that, it is necessary to amend or promulgate new synchronous regulations on the environment, forest land use, compensation and site clearance… in the direction of clear responsibilities at all levels and simplify procedures.

Sixth: Implement Power Plan VIII in the direction of allowing investors and localities to change the project scale during implementation (within +- 10% of capacity compared to decisions in the Plan) without No need for re-approval, to quickly save time for project implementation.

Power Plan VIII is built to be implemented within 10 years (2021-2030) with a total estimated budget of 134.7 billion USD (on average, the entire electricity industry needs to mobilize about 13.5 billion USD each year). ). After 1 year (from the date the Prime Minister approved Power Plan VIII until now), it shows that there are still many barriers to fully implementing the Plan’s objectives.

Recently, the Ministry of Industry and Trade submitted additional plans for implementing Power Planning VIII after many efforts to coordinate with localities to review more specific projects. As an open plan, supplementing the Implementation Plan to promptly adjust projects with problems is completely reasonable. However, with the remaining time (only 6.5 years) to carry out the 10-year workload, with the annual capital that needs to be mobilized reaching 20.7 billion USD, it shows great pressure.

We understand and share with the State management agency on energy in the current context. But ahead are challenges and pressures that require the determination of the Prime Minister, the urgent action of the Ministry of Industry and Trade, local authorities at all levels and investors to ensure projects in Power Plan VIII soon. implemented to ensure energy security for the national economy (period up to 2030 and following years)./.


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