27
OVERVIEW OF ENERGY SECTOR IN VIET NAM AND PARTNERSHIP INVESTMENT OPPORTUNITIES Nguyen Thai Son Director of Planning Department General Directorate of Energy – MOIT 27-6-2012
OVERVIEW OF ENERGY SECTOR IN VIET NAM AND PARTNERSHIP INVESTMENT OPPORTUNITIES
Nguyen Thai Son
Director of Planning Department
General Directorate of Energy – MOIT
27-6-2012
Content
Strategy for national energy development
Current status and development plan
Investment proposals
1
Q&A
Power sector
Oil and gas sector
Coal sector
Overview of socioeconomic
Renewable energy sector
Current status and development plan
In
tro
du
cti
on
O
ve
rvie
w o
f so
cia
leco
no
mic
2
Area 331.150,4 km2
Population 86,2 mil
Number of provinces 63
GDP growth rate
- 2006-2010 7%/year
- Year 2011 5,9%/year
- First 4months of year 2012 4%
- Planning for period of 2011-2015 6,5-7%/year
Strategy for national energy development
De
ve
lop
me
nt
str
ate
ry
3
- - Energy development must be closely linked to national social - economic development strategy and ensure a step ahead at high speed, sustained, coordinated, diversification of energy sources and energy saving technologies.
- Gradually set up the energy market, diversification of ownership and business methods, aims to satisfy the best interests of consumers. Accelerate the abolishing subsidies and remove exclusive, advanced to eliminate the implementation of social policy through energy prices;
- Synchronized and rational development of energy system: electricity, petroleum, coal, new and renewable energy, including interest in clean energy development, priority development of new and renewable energy;
- Improve efficiency, energy efficiency business. Focus on investment in energy efficiency, reduce losses;
- Development of energy tied to preserving the ecological environment, ensuring the implementation of sustainable energy development.
(Decision 1855/QĐ-TTg dated 27th December 2007)
Current status – Generation share & load growth
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Power sector
EVN
54%
Tư nhân
3%
Cổ phần
15%
TKV
3%
IPP, BOT nước
ngoài
10%
PVN
10%
Nhập khẩu
4%
Khác
1%
Thủy điện
40.3%
Nhiệt điện than
15.1%
Nhiệt điện dầu
2.7%
Tuabin khí
33.1%
Nhập khẩu
3.7%
Khác
2.8%
Nhiệt điện chạy khí
2.3%
Depend on owner Depend on kind of source
2011
Total installed capacity 23500MW
Commercial electricity 93,8 bil kWh
Electricity growth rate
Period of 2006-2010 13,7%
Year 2011 9,5%
CURRENT STATUS OF GENERATION SHARE
Current status – Grid
5
U« ngBÝ
PhícLong
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Power sector
Voltage Line (km) Substation
(MVA)
220kV 10,015 22,004
110kV 13.449 5.960
6-35kV 135,371 39,804
LV 240,424
Voltage Line (km) Substation
(MVA)
500kV 3,890 10,650
Viewpoints for development
6
a) Development of the power sector must be associated with national social - economic development strategy, ensure enough electricity to supply the national economy and social life.
b) Efficient use of energy resources for power development internally the country, combined with the import of power, reasonable fuel imports, diversification of primary energy sources for electricity production, fuel conservation and ensure energy security for the future
c) Gradually improve the quality of electric power to provide electricity services to the increasing quality. Implementation of the electricity price under the market mechanism to encourage investment in power sector development and encourage the use of power saving and effective.
d) Power development along with protecting natural resources, environmental protection ecological guarantee the country's sustainable development
e) Progressive formation and development of competitive electricity markets, diversifying forms of investment and trading. Only State monopoly transmission grid to ensure the security of national energy system.
f) Development of power sector based on the rational use and effective source of primary energy resources of each region; to continue promoting rural electrification, guaranteed to provide full and continuous and safety for electricity demand in all regions nationwide.
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Power sector
Development Plan – Generation share & elect. growth rate
7
Electricity growth rate
Period of 2011-2015 14,1-16%/yr
Period of 2016-2020 11,3-11,6%/yr
Period of 2021-2030 7,8-8,8%/yr
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Power sector
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2015 2020 2025 2030
Nuclear Power
Renewable Energy
Imported
Coal Fired Thermal Power
Oil and Gas Fired Thermal Power
Hydropower & Pump Storage
Development Plan – Transmission grid
8
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Power sector
NOTE
500kV: Existing 500kV line
220kV: Existing 220kV line
Existing 500kV
substation Existing 220kV
substation
Existing TPP
500kV: 500kV line (- 2010)
500kV substation(-
2010)
500kV: 500kV line (- 2020)
500kV substation(-
2020)
MAP FOR NATIONAL
POWER SYSTEM PLANNING TO 2030
Pha
Lai Uong Bi
Hai Phong
Ninh Binh Thanh Hoa
Chem Ha Dong
Ha Tinh Vinh
Dong Hoi
Yaly Vinh Son
Plei Ku Quy Nhon
SongHinh
Thac Mo Da Nhim
Bao Loc Tri An
Ba
Ria
Tra
Noc Rach Gia Cai Lay
Phu Lam
LAOS NORTHERN REGION
CHINA
CAMBODIA Krong Buk
Dinh
Mai Dong
Hoc Mon
Nho Quan
Di Linh
Phu My Nha Be
Thuong Tin
Quang Ninh
D.Nai3&4
Nhon Trach Song May
Son La Soc Son
Nha Trang
Nuclear Power
Ban Sok
SOUTHERN REGION
CENTRAL REGION
Lai Chau
HOA BINH
Viet Tri
Quang Tri
Da Nang
Doc Soi
Sam Bor
Tan Dinh
O Mon
Thac Ba
Region
Period of 2011-2015 Period of 2016-2020 Period of 2021-2025 Period of 2026-2030
No. of
stat.
No. of
transf.
Cap.
(MVA)
No.
of
stat.
No. of
transf.
Cap.
(MVA)
No. of
stat.
No. of
transf.
Cap.
(MVA
)
No.
of
stat.
No. of
transf.
Cap.
(MVA)
Northern 8 11 6750 11 13 13100 11 14 12700 6 9 7500
Central 1 2 900 4 4 2400 1 1 900 4 4 2550
Southern 11 14 9450 11 13 11250 10 13 10800 10 13 10350
Total 20 27 17100 26 30 26750 22 28 24400 20 26 20400
Region
Period of 2011-2015 Period of 2016-2020 Period of 2021-2025 Period of 2026-2030
No. of trans.
lines Length (km)
No. of trans.
lines Length (km)
No. of trans.
lines Length (km)
No. of trans.
lines
Length
(km)
Northern 8 1443 18 2015 7 680 5 760
Central 3 1074 4 630 0 0 3 920
Southern 13 1361 11 1890 3 1554 6 1044
Total 24 3878 33 4535 10 2234 14 2724
Development Plan – Construction volume
Power sector
9
500kV transformer
500kV transmission line
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220kV transformer
220kV transmission lines
Region
Period of 2011-2015 Period of 2016-2020 Period of 2021-2025 Period of 2026-2030
No.
of
stat.
No. of
transf.
Cap.
(MVA)
No.
of
stat.
No. of
transf.
Cap.
(MVA)
No.
of
stat.
No. of
transf.
Cap.
(MVA)
No.
of
stat.
No. of
transf.
Cap.
(MVA)
Northern 68 74 155438 75 82 18063 64 76 17400 72 87 21250
Central 22 24 3925 20 20 3750 26 27 6000 26 27 5750
Sounthen 47 73 16500 56 75 17250 66 81 19375 78 107 26250
Total 137 171 175863 151 177 39063 156 184 42775 176 221 53250
Region
Period of 2011-2015 Period of 2016-2020 Period of 2021-2025 Period of 2026-2030
No. of trans.
lines Length (km)
No. of trans.
lines Length (km)
No. of trans.
lines Length (km)
No. of trans.
lines
Length
(km)
Northern 60 3864 41 1584 44 1606 31 2168
Central 28 2867 15 1546 9 1362 5 916
Sounthen 70 3906 45 2175 41 2584 41 1936
Total 158 10637 101 5305 94 5552 77 5020
Development Plan – Construction volume
Power sector
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Development Plan– Capital investment
11
Items
2011-2015
2016-2020
2021-2025
2026-2030
2011-2030
I- For Power generation
22,076/ 4,415
28,830/ 5,766
27,005/ 5,401
32,441/ 6,482
110,322/ 5,516
II- For Grid 7,245/ 1,449
10,523/ 2,105
12,345/ 2,469
15,868/ 3,174
45,981/ 2,299
Total
29,321/ 5,864
39,353/ 7,871
39,349/ 7,870
48,280/ 9,656
156,303/ 7,815
Total Capital Investment needed/ Average Capital Investment per year (Bil. USD)
No. Investor Capacity
(MW) Investment ratio
1 EVN + TKV+PVN 26.874 49,49%
2 BOT 16.128 29,70%
3 IPP + Others 11.292 20,80%
Total 54.294 100,00%
Investment ratio of power project in period of 2011-2020
Power sector
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Roadmap for electricity tariff
12
Power sector
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Competitive Generation
Market
(VCGM)
Electricity Wholesale Market Electricity Retail Market
2010 2014 2016 2022 2024
Pilot
Operation
Full
Operation
Pilot
Operation
Full
Operation
Pilot
Operation
Full
Operation
13
SUPPORTING MECHANISM FOR WIND POWER DEVELOPMENT PROJECS (Decision 37/2011/QĐ-TTg dated 29th June 2011)
• Underwriting electricity produced from grid-connected wind power plants;
• Investment incentives, taxes, fees;
• Preferential land infrastructure;
• Support price of electricity for grid-connected wind power project
Avoided cost tariff
(Decision 18/2008/QĐ-BCT dated 18th July 2008)
-The avoided costs of the national power system is calculated when there is a (01)kWh power from small power plants using renewable energy is emitted into the distribution grid;
-Avoided costs as production costs of the generator 1kWh have the highest cost in the national electricity system, these costs can be avoided if buyers purchase1kWh from a small power plants using renewable energy replacement.
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Renewable Energy sector
14
Development Plan– Resource
Capacity of Renewable Energy on-grid (MW)
Capacity 2011-2015 2016-2020 2021-2030 2011-2030
Total 1198 2408 9588 13194
Wind power 213 780 5200 6193
Small Hydro power 895 1100 2380 4375
Biomass (solid) 50 305 1500 1855
Waste 39 100 200 339
Geothermal 0 80 198 278
Solar power 1 9 45 55
Biogas 1 34 65 100
Capacity of Renewable Energy off-grid (MW)
Capacity 2011-2015 2016-2020 2011-2020
Solar system 12,3 10 14
Small Hydro power (off grid) 31,2 25,6 58
Biogas 1,3 1 5
Wind power-diesel system 3,6 3 8
Solar-diesel system 4,6 3,8 8
wind-diesel-solar system 3.6 2,3 9
Total 56,7 45,7 102,4
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Renewable Energy sector
15
For grid-connected electricity from renewable energy sources for the period of the chosen scenario (20 years) with average investment rate of 1.34 million USD/MW (13.194MW). However, this capital will be invested by the mobilize capital of enterprises. Capital estimated 350.000 billion VND.
For electricity from off-grid renewable energy source: Total investment of 14.969 billion VND. This support capital is invested by the state.
For renewable energy use for heating: The total investment for the period was 42,000 billion VND. This capital is invested by people for household equipment and installation. It will be considered a small support in the early stage to stimulate using renewable energy movement and market development.
The total subsidies for the basic plan implemented in the period from 2011 to 2020 with the current calculation is 20.773 billion VND. In particular for electricity from renewable energy on-grid is 3953 billion (19%), renewable electricity off-grid is 14.969 billion VND (72%) renewable heat is 1857 billion VND (9%).
Renewable Energy sector
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Development Plan– Capital investment
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Oil &Gas sector
Viewpoints for development
Effective use of petroleum resources in the country, and to promote investment, search, exploration and exploitation of oil and gas abroad, combined import and export as a basis for sustainable development of the petroleum industry firmware, ensure energy security for the economy.
- Developing internal resources, combined with expanding international cooperation, attracting foreign investment in search activity, exploration, increases in oil and gas reserves verified.
- Prioritize search, exploration and exploitation of the deep water, offshore.
- Encourage participation of all economic sectors and foreign investment in developing the field of processing, distributing products and services etc..
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Planning – Exploration, exploitation, processing, transportation
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3. Development of gas industry:
+ Development towards diversification of markets, gas will be provided to the industry: power generation, fertilizer, chemical, industrial, transportation and civil-scale production of about 19 billion m3 in 2025.
+ Research pipeline connecting East - South West, a gas pipeline as a basis for transnational connection with gas pipeline in Southeast Asia.
+ Strengthening international cooperation and selection of strategic partner capable of long-term gas supply LNG, CNG, DME ... from Russia, the Middle East, Australia, Africa ... etc..
+ Prepare infrastructure, promote and encourage the construction contractor collection systems offshore.
+ Cooperation, research technology solutions to recover gas is burned off at the platform in separating the high-value products such as Ethan, propane-butane(LPG). Development and exploitation of gas fields with high CO2 content.
+ Research and Development projects of gas to form combinations of oil and gas industry, building separation Ethan tower system at the treatment plants to build gas processing plants Ethan-ethylene; processing gas into liquid fuels (GTL), DME from methanol.
4. Oil and gas processing industry:
+ By 2015, finish 3-5 petrochemical refineries construction with total capacity of filter around 26-32 million tons/year, construction and commissioning of 1-2 production of petrochemical products basic petrochemicals.
+ By 2025, complete the expansion and completion of construction 6-7 petrochemical refineries with total refining capacity of 45-60 million tons/year,50% meet the needs basic petrochemical products. ...
Exploitation
(million tons oil
equivalent / year)
Exploiting overseas
(million tons / year)
Crude Oil
(million tons / year)
Gas
(million m3/year)
Period to 2015 25 – 38 18 – 20 8 --19
Period 2016 -2025 40 – 45 7 --14 12 – 16 8 --19
1. Search, petroleum exploration: oil and gas reserves reach 35-45 million tons of oil equivalent / year.
2. Oil and gas exploration:
Oil &Gas sector
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Development Plan– Capital investment (mil. USD)
Oil &Gas sector
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No. Type of Investment 2011-15
High Scenario (Billion USD) 65,170
1 Oil and gas exploration 28,784
2 Transportation &collection of gas 2,467
3 Gas Processing Plant 1,816
4 Oil Refinery & Petrochemical 18,785
5 Petroleum Services 10,983
6 Petrol & LPG depots 2,100
7 Topics, scientific research 235
The participation of the PVN: 26,020
19
Coal sector
Current status
+ 5 mines with a capacity of over 2 million tons/year
+ 15 mines with a capacity of 0,1-0,7 million tons/year
+ A number of extraction with a capacity of less than 0.1 million tons/year
Opencast:
Underground: + 9 mines with a capacity of over 1 million tons/year
+ over 20 mines with a capacity of less than 1 million tons/year
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Mining production in the period 2003-2010
Extraction
method Unit 2003 2004 2005 2006 2007 2008 2009 2010 Total
Opencast Mil. tons 12.98 17.33 22.06 26.1 26.78 25.33 25.76 26.52 182.86
Underground Mil. tons 6.81 9.78 12.48 14.71 16.33 17.6 18.17 20.44 116.32
Total Mil.
tons 19.79 27.11 34.54 40.81 43.11 42.93 43.93 46.96 299.18
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Viewpoints for development
- Developing the coal industry on the basis of mining, processing, cost-effective use of coal resources of the country, to serve the domestic demand is primarily to ensure national energy security.
- Development of sustainable coal industry, associated with effective protection, improve the ecological environment of coal
- Maximize internal resources (capital, ability to design and manufacture of equipment in the country, etc.)
- Promoting foreign investment in exploration and exploitation to supplement the long-term coal for domestic needs.
- To diversify forms of investment and business in the coal industry. To do business under the coal market is the management of the State to serve the aim of ensuring national energy security.
Coal sector
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Planning – Exploration, exploitation, processing
Coal sector
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1. Coal exploration:
a) Northeast coalfield:
- Distribution mainly in Quang Ninh, a part in Bac Giang and Hai Duong. This area has resources and reserves of the country's largest anthracite coal are mobilized primarily on 2030 planning. - By the end of 2015, completing the resources exploration and coal reserves of upper-level and a minus 300m area for the North East coalfield. By 2020, basically complete the exploration of coal to the bottom floor.
b) Red River delta coal basin:
- Distribution is mainly in the provinces of Thai Binh and Hung Yen, Nam Dinh, have great potential in type A bituminous coal (sub - bituminous), low levels of exploration, mining conditions difficult, complex and sensitive environment, ecology. - During the period 2012 - 2015, selected area contains some promising coal, geological conditions - suitable for conducting mining exploration investment for the test
harness. - By 2030, completed basic exploration area contains coal mining favorable conditions improve Khoai Chau - Tien Hai.
2. Coal Mining:
+ Year 2012: 45 - 47 million tons; Year 2015: 55 - 58 million tons; Year 2020: 60 - 65 million tons; Year 2025: 66 - 70 million tons; Year 2030: greater than 75 million tons.
3. Processing of coal: Strive to 2020, processing of coal development in product diversification (direct fuel combustion, coal for metallurgy, coal gasification, coal to liquid fuels, raw materials for chemical industry etc. ..)
22
- From year 2015, Vietnam will have to import coal;
- Total capital investment needs for the coal sector to 2030 about 691 trillion VND (equivalent to 33billion USD);
- The average capital investment needs for the coal sector to 2030 about 34.55 trillion VND/year (equivalent to 1,6 billion USD/year).
Coal sector
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Development Plan– Capital investment
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Power sector
STT Project name Type of
investment
Location
(province)
Operation
year
Capacity
(MW)
Total
investme
nt (bil
USD)
Progress
1 O Mon II BOT Can Tho 2016 750 0,6
The project is preparing bidding
document to select investors.
International bidding.
2 Quang Tri
IPP/BOT
(potential
BOT)
Quang Tri 2019-2020 2x600 2,3
Ministry of Industry and Trade is
studying the investment guidelines of
project preparation.
3 Vung Ang 3 BOT Ha Tinh 2026-2028 4x600 5
The project is preparing bidding
document to select investors.
International bidding.
4 Pump storage PP
No.3 IPP Ninh Thuan 2028-2030 4x300 0,8
5 Van Phong 2 BOT Khanh Hoa 2021 2x660MW 2,4 Not yet implemented
6 Nam Đinh 2 BOT Nam Đinh 2025 2x660MW 2,4 Not yet implemented
7 Son My 1 BOT Binh Thuan 2018 5x390MW 2
Ministry of Industry and Trade is
studying the proposals of the investors
for investment in BOT type and plan to
evaluate and approve the feasibility
study (in case the project is approved by
competent authorities as BOT type)
8 Song Hau 2 BOT Hau Giang 2027 2x1000MW 3,5
Ministry of Industry and Trade are
working to guide investors in project
preparation
Total 12140MW 19
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Oil & Gas sector
No. Project name Size Location Operation year
Total
investm
ent (bil.
USD)
Calling
for
foreign
investm
ent
ratio
Status &
progress
1
Upgrading and
expanding Dung
Quat oil refinery
from 6.5
(existing) to 10
million tons/year
Dung Quat
Economic Zone,
Quang Ngai
province
To begin the
construction in
the period 2014-
2017, commercial
operation in 2017
2,7 49% Investment
project are set up
2 The Nam Van
Phong refinery
10 million
tons/year
Van Phong
Economic Zone,
Khanh Hoa
province
2015-2020 8 49%
Investment
project are set up
and looking for
joint venture
partners
3 Gas Pipeline Nam
Con Son 2
~400km length,
capacity of 7
billion m3 /year
Ba Ria – Vung
Tau province
Commercial
operation in 2015 1,3 49%
set the overall
technical design
(FEED)
4 Long Son oil
refinery
10 million
tons/year
Long Son oil and
gas industrial
zone, Ba Ria -
Vung Tau
province
2015-2020 8 75% Study and calling
for investment
Total 20
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Coal sector
To request assistance in the field of research in the Red River Delta coal basin.
Support the implementation of projects related to environmental protection and safety in coal mining.
Enhancing ODA aid for projects in infrastructure development in Vietnam's coal industry, human resources training.
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