The risks of energy shortages taken full force

The government’s plan to reduce the use of fossil fuels and increase clean energy sources is facing major obstacles, such as dependence on coal, and without new investment supply will decline faster than demand , which could lead to power shortages.

The Cam Pha thermal power station, which falls under Vietnam’s National Coal and Mineral Industries Group (Vinacomin), is temporarily closed due to lack of coal.

A representative of Cua Ong Coal Selection Company, a coal supplier for Cam Pha Thermal Power, confirmed: “Since the beginning of the year, the company has not supplied coal to the plant.

The total capacity of the power plant is 600 MW. In normal times, it annually supplies the market with 3.68 billion kWh.

Dang Thanh Hai, general manager of Vinacomin, at a conference on October 20, called on the station to fix the problem and resume production. He affirmed: “Vinacomin will ensure sufficient supply of coal in accordance with the signed contract”.

Current demand is met with a mix of locally produced and imported charcoal, photo Le Toan

The demand for coal for power generation continues to rise, despite Vinacomin’s efforts to meet current demand with locally produced and imported coal. In the first nine months of 2022, the company had to import around 3.14 million tonnes to be mixed with locally produced coal to supply thermal power plants.

Coal for power in 2022 is expected to be around 35.5 million tonnes, or 101% of plan and up 4% from 2021.

According to Vinacomin’s plan, coal production for power plants in 2022 is expected to reach 35 million tons, but the supply is highly dependent on imports. In the fourth quarter of the year, the company expects to import about 1.9 million tonnes of coal to be blended with locally produced coal.

Currently, Vinacomin and Dong Bac Corporation account for about 95% of the total coal production of the whole industry.

Vinacomin executives, however, fear coal imports will fall short of this year’s plan. Current solutions, such as storing and blending domestic coal, cannot compensate for the coal shortage.

Most of the coal stocks are in Mao Khe and Uong Bi, but they cannot be consumed directly by the power plant and must be mixed with imported coal or other domestic coal sources.

According to many national analysts, the European Union plans to keep coal-fired power plants running longer. This could make it more difficult for Vietnam to import coal in the last two months of the year.

In the fourth quarter, in addition to coal for power generation, Vinacomin is expected to import up to two million tonnes, if household coal demand is included, bringing the total for 2022 to 5.1 million. tons.

According to a forecast by the Ministry of Industry and Trade (MoIT), by 2030, coal-fired power will account for nearly 43% of Vietnam’s power capacity, up from more than 38% currently.

The country has been facing severe power shortages since 2021 as electricity demand has grown faster than new power plants. As a result, Vietnam will have to import 680 million tons of coal by 2030.

MoIT’s August Draft Coal Industry Development Strategy shows that the demand for coal continues to rise.

Vietnam’s coal demand is projected to be around 94-97 million tonnes in 2025 and peak at around 125-127 million tonnes in 2030. By 2045, coal demand could drop to 73-76 million tons per year.

MoIT data also shows that domestic coal consumption has increased rapidly, from 27.8 million tonnes in 2011 (representing 62.2% of total coal consumption) to around 53.52 million tonnes in 2021 ( representing 96.7%). Thus, the volume of coal consumed today is more than twice that of 2011.

Based on coal resources and reserves, geological conditions and mining technology, MoIT expects coal mobilization capacity to increase by 2030 to 43-47 million tonnes of commercial coal per year.

Then it is expected to shrink to about 45 million tons of coal over the next decade. To meet coal demand for production, Vietnam is expected to import about 50-83 million tons between 2025 and 2035, then gradually decrease to about 32-35 million tons in 2045.

In the forecast, the MoIT noted that potential coal resources are limited and mining conditions are increasingly difficult, resulting in higher production costs. Moreover, the coal industry cannot significantly increase mining production and is highly dependent on natural factors.

Mining companies are also facing labor shortages due to the harsh environment, health effects and the general energy transition in the coal industry, which is also forcing companies to switch to less polluting products.

According to the MoIT, the national production and consumption may change when the state organizes a survey and assessment of the Red River Delta coal basin and some other continental shelf basins of Vietnam.

The state can enact appropriate mechanisms and policies to support and encourage enterprises to invest in overseas coal mining, as well as seek and diversify sources of imported coal in Vietnam.

Source: VIR