Vietnam will gradually cut down on coal exports as local demand surges and supply declines, a government official said Friday.
The government policy is to ensure sufficient coal supply for the country, and for the power sector in particular, Minister of Industry and Trade Vu Huy Hoang told the press on the sidelines of a National Assembly meeting Friday.
"But the extent of export cuts and the coal varieties to which they will be applied will have to be considered carefully," he said.
Hoang said there are many kinds of high quality coal that are not used at home but can fetch good export prices. "Moreover, the coal industry is in need of capital"¦ and exports can bring back money to buy equipment and machinery for the industry."
"Non-renewable energy sources including coal, gas and oil are running out and if there is no new discovery, it will be difficult to find energy for the country in the next several decades, including for power generation," he said.
"From 2015, when local coal demand surges sharply and a number of new power plants start production, the country will not only stop exporting coal but will have to import coal as well."
Critical drought conditions have caused water levels at reservoirs to drop by up to 50 percent this year, making electricity production tough, Hoang said.
The situation would have been better if the water at reservoirs had not been shared for agricultural production early this year, he said.
"I want to emphasize that the difficulties that the power sector has to face this year are caused by external factors."
Power demand in Vietnam is set to rise 18 percent this year on the back of an economic recovery. The lack of water in reservoirs would translate to a loss of nearly 1 billion kilowatt-hours of electricity at hydro power plants, the government said in a statement in April.
Hoang said when the monsoon season starts next month there will be an increase in water supply for power production.