According to Power Plan VIII, the total capacity of gas power plant projects invested in construction and put into operation by 2030 is 30,524 MW. To implement gas power projects in Power Plan VIII, it is very necessary to discuss solutions to remove difficulties and obstacles and accelerate the implementation of gas power projects.
| Bac Lieu LNG Gas Power Project has an investment scale of about 4 billion USD. |
Reporting on the implementation of gas power projects in Power Plan VIII, leaders of the Department of Electricity and Renewable Energy (Ministry of Industry and Trade) said that the total capacity of power plants using domestic gas is 7,900 MW. (10 projects) and the total capacity of power plants using LNG is 22,524 MW (13 projects). Up to now, there is only one plant that has been put into operation: O Mon I Thermal Power Plant (660 MW). 02 projects under construction are Nhon Trach 3 Power Plant; Nhon Trach 4 (total capacity 1,624 MW).
Projects that are negotiating Power Purchase Agreements (PPA) with EVN include: Nhon Trach 3 and 4, O Mon II… According to reports from investors, these projects all have problems during the process. negotiations and have not been able to sign a PPA as a basis for investors to arrange capital for the project.
Faced with the above reality, in order to remove obstacles and help investors and EVN sign a PPA as a basis for arranging capital and implementing natural gas and LNG power projects, the Electricity Regulatory Authority (Ministry of Industry and Trade) Thuong) is presiding over research and reporting to the Ministry of Industry and Trade to consider issuing a Circular amending Circular 45/2018/TT-BCT issued on November 15, 2028 (amended Circular), at the same time the Ministry of Industry and Trade is also reporting to the Prime Minister on the draft Decree regulating the mechanism for developing power projects using gas.
The timely promulgation of the revised Circular is very necessary. Specifically, in addition to needing to clarify and supplement the definition of “Offtake”, the revised Circular also needs to provide more specific regulations on indirect participants in the electricity market: “Power plants approved by the Ministry of Industry and Trade/ Competent authorities approve permission to indirectly participate in the electricity market” or “Thermal power plants have constraints to use maximum gas fuel sources to ensure national interests”. From there, the power system operator has a full basis to schedule mobilization, ensuring the implementation of commitments of power plants with offtake obligations permitted by the Ministry of Industry and Trade/competent authorities to switch from gas sales contract to PPA.
In addition, the amended Circular needs to supplement regulations in case EVN/power purchasing unit and power plant investor cannot agree on the percentage of electricity output paid according to the contract price or annual contract output, then The two sides apply (officially) according to the rate announced by the Electricity Regulatory Authority, instead of temporarily applying it as current regulations, limiting the handling of disputes during the electricity bill payment process later.
| Block B – O Mon Project Chain is a large project chain that contributes to providing gas resources for the country |
For power plant projects using LNG, there are currently no regulations on determining the gross output for this type of plant. The absence of a long-term power output offtake mechanism or long-term annual power output commitment makes it difficult for power plant projects using LNG to ensure capital recovery as well as project efficiency. Therefore, investors face many difficulties in arranging capital to implement the project.
On the other hand, this also affects the search, arrangement and signing of long-term LNG purchase contracts at reasonable prices, affecting the electricity price of these projects, which is also the biggest cause of the slow implementation of power plant projects using LNG.
Therefore, the Ministry of Industry and Trade needs to consider and allow a long-term electricity output offtake mechanism for power plants using LNG on the principle of horizontal transfer from LNG purchase contracts with a reasonable offtake ratio (level 72 %-80%) of power plant output.
It can be seen that in order to operate the electricity market in a clear and transparent manner, the Ministry of Industry and Trade needs to develop guiding circulars that are as specific as possible for each type of power source. In particular, it is also necessary to consider the separation and distinction between power plants using domestically exploited gas and power plants using imported LNG to promulgate appropriate mechanisms and policies due to the fact that there are two types of gas. These have different investment scale, completion time, operating costs… with different characteristics. From there, we can best mobilize power sources, ensure national energy security, and avoid wasting state and business resources.
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