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Q: EVN promised that power outages would end from July 1 on, so why have many areas in the central region and even Hanoi and HCM City have not had power in recent days?
Dao Van Hung: In most cases, the cause was overloaded transmission lines, transformer stations and relays. That’s it. Those are technical matters that we can’t control.
Q: Will power outages continue in July?
Hung: This is a difficult question, which only Heaven can answer. The central region has no reservoirs or lakes that still have water [for hydroelectric power generation]. That’s an act of God, and we have to accept it.
Q: As the weather is becoming harsher, what investments is EVN making to deal with such challenges?
Hung: It’s a question of how much we ought to allocate to deal with once-in-a-hundred year scenarios like the present drought. Do we dare to invest $8 billion for that preventive capacity for 100 years? If the people agree, we will. This is a matter of economics.
Q: Though Vietnam lacks electricity, many new power projects are only slowly being implemented. How does EVN see this problem?
Hung: Delays in site clearance, change of geological structures and capital-associated issues all slow down new projects.
In 2010, EVN has begun the Nghi Son 2 and 4 power projects. There are four more projects in preparation that will cost a total of 140 trillion dong ($7.36 billion). EVN’s annual profit is only one trillion dong so we can’t self-finance these projects.
Assuming we can mobilize the funds, it will take us three to four years to complete the Nghi Son 2, Duyen Hai 1, Duyen Hai 3 and Lai Chau projects. The nation’s demand for power is growing at nearly 20 percent a year – in that, Vietnam is a world leader.
Q: Many people blame the recent power-cut situation on EVN’s monopoly in the power sector. Would you agree?
Hung: EVN has equitised nine power plants. We currently manage only 18 of the country’s over 40 power plants, and 9000 megawatts of the nation’s total capacity of 19,000 MW, or 47 percent. That percentage will fall by 2015 to 37.5 percent according to the Government’s plan. However, EVN is assigned to control 100 percent of the power grid. By 2015, EVN will hold 37.5 percent of total power capacity.
You can see, then, that EVN doesn’t monopolize power generation, only power transmission.
Q: Although EVN’s projects can’t meet the demand for electricity, investors who want to generate wind-power in Binh Thuan province complain that it is very difficult to negotiate with EVN, because EVN is the only buyer of power. How can you explain that?
Hung: EVN’s ability to purchase power is restricted. We can afford to buy such power for a month, but not for a year because we don’t have sufficient cash.
It’s not just the power generators in Binh Thuan that complain. The simple fact is that we are required to sell electricity to users at low prices so we can’t buy power at high prices.
[At a meeting convened by the Ministry of Industry on the same day, EVN and Vinacomin, the state-owned coal corporation, insisted that the Government must allow electricity prices to rise to an economic level. See related story – VNNB]
Q: The Government has instructed EVN to calculate economic losses caused by irecent power cuts and report the results before July 15. How has EVN carried out this task?
Hung: Every dollar of revenues lost to power cuts, according to world-wide experience, costs society 2.5 to three dollars. In Vietnam, we can’t quantify all the intangible costs. It would be better to let consumers make the calculation rather than EVN.
Miserably hot weather like this makes everyone upset; how do we quantify that cost to society?
For example, the textile and garment sector says that when there’s an extended power cut, their dyes are ruined. We can’t judge the cost of that. I think a state agency should be responsible for calculating the losses.
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