Coal will take over from hydropower as the leading fuel for new electricity generation in Vietnam in the next five years, during which power demand is set to rise by 15 percent annually, Vietnam Electricity (EVN) said on Wednesday.
Trinh Ngoc Khanh, head of planning at the power monopoly, also said the manufacturing sector will face power shortages in 2011, coming as the economy is expected to grow at a slower pace of 6.5 percent this year and next.
The country has not been able to meet demand for electricity by about 3 percent in the past five years and EVN will need to invest $3 billion a year for new power plants and transmission infrastructure between 2011 and 2015, during which 38 projects would come online, he said.
He said electricity consumption would nearly double to 175 gigawatt-hours in 2015 from 98 gigawatt-hours this year. Supply will increase to 196 gigawatt-hours from the current 110.8 gigawatt-hours.
Vietnam will see a sharp increase in the use of fuels such as oil, coal and gas for power generation, Khanh said.
Hydropower has been dominant in Vietnam, but it is waning. Last year it accounted for 37.6 percent of total generation, followed by gas with 31.7 percent, coal at 18.3 percent, oil at 5.4 percent and small hydro and renewable making up 2.3 percent.
New generation capacity between this year and 2015 will total 26,911 megawatts, of which coal will account for 14,370 MW, gas 2,970 MW, hydropower 7,605 MW and imported hydropower 635 MW, he said.
Small hydropower plants and renewable sources will add 1,331 megawatts, bringing total generating capacity in the system to 48,497 MW.
Ten northern provinces live on 1,000 MW of imported hydro power from China, which accounts for some 4.65 percent of the total.
In the face of chronic power cuts, the government decided this year to put the burden on the manufacturing sector instead of cutting residential electricity, which stirred public outcry last year.
"We asked the production sector to cope with the power shortage this year. The impact has been big," said Khanh.
Tomaso Andreatta, vice chairman of the European Chamber of Commerce in Vietnam, called the situation an "energy emergency" and said it felt worse than a 3 percent shortfall.
"If electricity producers are allowed to sell directly to customers instead of via EVN, lots of companies would like to pay more to have enough power," he said.
EVN expects to make no profit this year with government-mandated power prices equaling production costs, Khanh said. Last year EVN reported a loss of VND15 trillion (US$730 million).