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Investors dismayed as EVN turns its back on wind and solar power
Vietnam’s first wind power plant has provided electricity to the national grid, though the offtake price has not yet been fixed. The electricity monopoly, EVN, insists it cannot ‘buy high to sell cheap,’ according to a report by the newspaper Tien Phong.
Solar power slow to shine
Director of Le Trong Dinh of the Kim Dinh International Group says that to date, Electricity of Vietnam (EVN) has “said more than it has done” on development of clean energy projects. Though investors have put tens of millions of dollars into such projects, very few of them are supplying electricity to the national grid.
Kim Dinh thinks there’s a powerful argument for solar lampposts. The installation cost is 70 million dong for a solar lamppost but only 40 million dong for a conventional lamppost using a 300 watt high pressure lamp. However, during the lifetime of the lampposts, 20 years, the conventional lamp will require more than 100 million dong’s worth of electricity, and the solar-powered lamp none.
“We have about 500,000 lampposts on public streets. If we were to replace all of them solar energy lampposts, the nation could save 547MW of electricity per year, as much as is produced at a medium-sized thermal power plant at an average investment cost of $1.5 million/MW. Reliance on solar energy to light our streets would also replace 438,000 tons of CO2,” Dinh said.
Wind power potential still unexploited
Vietnam’s pioneer wind power investors complain that EVN will not negotiate a reasonable price for the energy they produce on a 120 megawatt Binh Thuan province ‘wind farm’. The facility, an investment of the Vietnam Renewable Energy Joint Stock Company REVN in Binh Thuan’s super-windy Mui Ne area, has provided electricity to the national grid since late 2009, while the sale price has still been ‘under negotiation.’
A representative of a private firm that invests in the renewable energy sector, who asked to be anonymous, said that there is no current incentive to invest in renewables. “EVN says that because it can purchase electricity from hydropower plants at only five US cents per kilowatt hour and can only sell the power at an average price less than six cents, it cannot afford to buy electricity from wind power plants at an average of ten cents.”
EVN won’t ‘buy high to sell cheap’
An EVN Deputy Director General admits that many wind and solar power investors still cannot sell electricity to EVN, explaining that their production costs are too high.
“They’re offering us wind-generated electricity for ten to 10.5 cents per kWh. We can buy power from coal and gas-fired power plants, at a little more than seven cents. The wind power investors must reduce their costs to six or 6.5 cents per kWH - that’s the cost in China - and then we’d buy from them.
“EVN under present circumstances will suffer big losses if we purchase electricity generated from wind power.”
The vicious circle has been existed for many years. EVN’s a monopoly buyer. It insists that it cannot buy electricity at overly high prices, because it has to sell electricity at low prices as instructed by the State. Meanwhile, investors complain that they cannot make profit when investing in the power sector.
(In other news, Vietnam’s power sector has just proposed that the basic electricity price be raised to eight cents per kilowatt hour in 2011 to stimulate needed investment in new generating capacity. – VNNB)
Vietnam Energy Association Chairman Tran Viet Ngai comments that EVN can purchase power at low prices from hydropower plants and at higher prices from wind and solar power plants, averaging its costs. By doing so, EVN can encourage investors to pour money into renewable energy and help settle the electricity shortage.
vietnamnet, Tien phong
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