Easy scapegoats

By Pham Vu in HCMC The nation’s electricity monopoly EVN did promise in early July to do away with nightmarish power outages after the dry spell caused the hydropower dams, a major source of electricity, to dry up. The promise must have brought a deep sigh of relief to the public and especially the corporate sector. In a tropical country like Vietnam, sultry weather is already vexing for people but at the height of the dry season, neither electric fans nor air-cons could work due to the rampant power undersupply. For producers, the situation was even worse; many failed to meet the deadlines for orders, including those from foreign customers. The shortage of electricity is a yearly routine as the hydropower dams are responsible for around 40% of the country’s power output capacity but whether they can run at full throttle depends largely on weather. It will be fine if they take enough rainwater; otherwise, their output will take an immediate nosedive, and the country is met with the latter scenario at the moment. The storm season is when the dams amass water for power generation the following year but there have been fewer storms this year than last year. Statistics provided for Tuoi Tre newspaper by an EVN official indicate that at this time of year, seven to nine storms normally make landfall in Vietnam but this year has seen only four. Explaining the severity of water shortages, Nguyen Van Thanh, director of Hoa Binh hydropower station, the country’s largest, tells Tuoi Tre that there is turbid water thunderously flowing into the dam at this time of year but it is different this year as water now flowing into the dams is as crystal-clear as the seawater in Bach Long Vi in the Halong Bay. The central weather center has confirmed this. Nguyen Lan Chau, deputy director of the center, is quoted by Saigon Tiep Thi newspaper as saying rainfalls this year account for 60-70% of the average of previous years. Lower-than-normal water flows into the major dams are a good reason for EVN to blame the snap power cuts on. There have been days when power demand has exceed supply by 5-10%, the EVN chairman, Dao Van Hung, tells local media, citing the unexpected power stoppage as a result of too much dependence on hydropower sources. Thermo-power is an alternative source that needs investment acceleration but Hung says current power prices are too low to attract investors to join power source development projects. If power tariffs were raised to attractive levels, he says, the problem would not have been as severe as now. “There are several reasons for power shortages, and one of them is low power prices,” he says. “If power pricing had been decided by market forces and more investments had been channeled into the industry earlier, the current difficulty would have been less harsh.” Doan Van Binh, deputy director of the Energy Science Institute, shows sympathy with the EVN chairman when speaking to Tuoi Tre about power prices. “To some extent, I share Mr Dao Van Hung’s view that keeping power tariffs low hampers new investments. Surveys show Vietnam has one of the lowest power prices in the world.” The gist of the matter, however, is not how much power is priced but a transparent mechanism adopted by EVN to buy electricity from non-member power plant builders, Binh says. In instances where EVN’s hydropower plants operate at full capacity, he says, investors have the right to know the exact price EVN is willing to pay so that they can manage. But the sad reality is that EVN will reduce power purchases from independent power suppliers when its hydropower plants have more than enough water to generate electricity because production cost is cheap, National Assembly deputy Vu Quang Hai says in Tuoi Tre. The way prices are set is more important than how much power costs, Binh says, and if transparency is guaranteed, consumers are willing to pay higher prices while investors are ready to pour money into power generation projects. What’s more, EVN’s poor planning and development are also to blame. The sixth Master Power Development Plan has a detailed timeline for commissioning new thermo-power projects but many of them are behind schedule. For instance, Quang Ninh 1 thermo-power plant has suffered from a lot of glitches and hitches. Generator One at the station is expected to resume operation on November 15 this year at best while Generator Two has stopped since August 3, according to Tuoi Tre. Haiphong station is in the same boat, with Generator One having recently been forced to stop and Generator Two having been unsuccessful in the test run. Perhaps Haiphong will resume generation by early next month. In the meantime, many operational power stations – such as Thac Ba and Song Hinh (hydropower) and Pha Lai, Thu Duc and Uong Bi (thermo-power) – have either broken down or been temporarily halted from production to facilitate repair and maintenance. There is a consensus among critics that the scapegoats like droughts and low power tariffs have been easily used by EVN over the years to deny responsibility and that it is for the Government to hold the country’s largest power distributor accountable for empty promises and lack of comprehensive solutions to wipe out the perennial power shortages for good. The Saigon Times Daily