part 1: overview of cogeneration and its status in asia - Fire

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162 Part3: Summary of country studies – Bangladesh and Viet Nam 4.1.2 Status and future prospect of electricity demand and supply Electricity shortage is now a big problem in the power sector. Many industrial consumers have prepared themselves for power interruptions with stand-by self-generating units; in some cases, even independent power plants have been commissioned for big industrial consumers such as centralized industrial zones (CIZ) or export processing zones (EPZ). In the period up to 2010, new power plants will be of different types in each region: coal (and hydro) in the North, gas (combined cycle) in the South, and hydro in the Central region. To alleviate the burden of investment capital on the government, the two considered ways are purchasing electricity from independent power producers (IPP) or using electricity from Build- Operate-Transfer (BOT) schemes. Despite efforts by the Government, according to a prediction made by the Electricity of Viet Nam (EVN), a serious electricity shortage, estimated to range from 400 GWh to 1 TWh, will take place in 1999 in Viet Nam. The EVN planned to buy approximately 100 GWh of electricity from industrial factories as well as centralized industrial parks (CIP) or industrial processing zones (IPZ). Thus, the capacity deficit could be estimated as between 200 and 500 MW. 4.1.3 Prevailing Costs of Energy In Viet Nam, the prices of coal and electricity have been lower than their costs of production, mainly due to the subsidy extended by the government. The government has followed a strategy of fixing maximum bulk and retail prices of oil and oil products on the basis of CIF cost of imported products, plus a distribution margin and taxes. Oil and oil products prices depend strongly on the exchange rate variation. The retail price of electricity in industry has been adjusted recently with the introduction of the Value Added Tax (VAT) from January 1999 (see Table 4.1). However, the electricity tariff applied to foreign companies is higher, US$0.11/kWh. The capacity charge is so far not applied in Viet Nam although there is a registered capacity charge for big industrial consumers. The factory should not have a greater demand than the registered capacity during the peak period to avoid any power cut-off. The time-of-day tariff has just been introduced in the industry and commercial sector in Viet Nam but is not widely practised. Before January 1999, the price of electricity during the utility peak period was double that of the normal period whereas the price during off-peak period was 25 per cent lower than that of the normal period. However, with the introduction of VAT, the new time-of-day tariff is being adjusted and the power company EVN has yet to make a clear announcement. Table 4.1 Electricity tariff before and after introduction of VAT Price before VAT Price after VAT Price of 1998 VND/kWh* VND/kWh VND/kWh 1. Normal period (110 kV) 636 699.6 700 2. Normal period (20 kV to
Summary of country study – Viet Nam 4.1.4 Government policies and strategies for private power generation According to the Ministry of Planning and Investment, the private power generation that is considered as an infrastructure development activity, is given a favoured status and is promoted by the government. The power generation sector can get the priority of foreign currency exchange for the purpose of transfer of profits made by foreign investors. In Viet Nam, big power plants can be developed through various forms of investment: Build- Operate-Transfer, credit from supplier, self-development by Vietnamese companies (e.g. EVN and VINACOAL) in collaboration with foreign companies. However, the development of big private power plant is quite complicated and there is a lot of competition. Small and medium scale private power generating units, including cogeneration plant, inside industrial parks, export-processing zones or combined with industrial factories seem to be more suitable for Viet Nam. Security Package For the big power plants, the international conditions and practices are respected. Model Implementation Agreement, Fuel Supply Agreement are prepared. The Government guarantees power purchase agreement obligations of the concerned utilities. For small and medium-scale private power plants, there is no such fixed model now. So far, EVN has bought electricity from some sugar mills and is negotiating to buy excess electricity from paper mills on the basis of energy charge alone (without any payment for capacity charge). Tariff for bulk purchase of power at busbar The selling price of electricity from small and medium private power plants varies from one case to another. EVN can now accept to buy off excess electricity from small power producers with a daily spot tariff as follows: US$ 0.05/kWh during peak load, US$ 0.04/kWh during normal hours and US$ 0.03/kWh during off-peak hours. However, the capacity charge is not mentioned. For big power plants, EVN and the National Committee of Price must approve the purchase tariff of electricity. Small and medium scale plants can sell electricity directly to factories or industrial park but the Provincial Authority must approve the tariff. The electricity produced in excess can be sold to EVN at a negotiated price, without capacity charge, which is often around 70 per cent of EVN’s electricity selling price. In some existing cases, EVN accepts a price of around US$ 0.043/kWh. In an interview done in Mekong Delta, the Provincial Electricity Company consented to buy electricity at around 600 VND/kWh. So far, there is no effective legal system in Viet Nam to oblige electricity utilities to purchase power from small/decentralized power producers. 163
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PART 1: OVERVIEW OF COGENERATION AN
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4 Part I: Overview of cogeneration
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State of art review of cogeneration
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Policy framework for promoting coge
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Cogeneration in Asia today 49 1.1 I
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Cogeneration in Asia today 51 4,000
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Cogeneration in Asia today 53 1.3 T
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Cogeneration in Asia today 55 1.3.3
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Cogeneration in Asia today 61 1.7 R
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Cogeneration in Asia today 63 Every
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Cogeneration in Asia today 65 Cogen
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68 Part II: Cogeneration experience
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Cogeneration experiences around the
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PART 3: SUMMARY OF COUNTRY STUDIES
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