In a recent report sent to the Ministry of Industry and Trade , Vietnam Electricity Group (EVN) pointed out the difficulties when many domestic gas turbine factories will have to use additional imported LNG fuel in the near future.
EVN said that the Phu My 2.2 and Phu My 3 BOT power plant projects, after being handed over in 2024-2025, will have to use imported LNG because domestic gas has been allocated to other plants under long-term contracts. Similarly, Nhon Trach 3 and 4, when in operation, will also have to supplement imported LNG for power generation.
According to EVN's calculations, the price of LNG gas arriving in Vietnam is 1.5 times higher than the domestic gas price, leading to increased power generation costs for both factories and EVN's electricity purchases in the context of difficult financial balance.
In the Power Plan VIII, the price of LNG gas is forecast by the Ministry of Industry and Trade to be around 10.6 USD per million BTU in the period 2021-2045, the average price to the factory is 11.8 USD per million BTU.
With this fuel price, the corresponding electricity production price is about 9.2 cents/kWh, about 1.3 cents higher than EVN's output - the average retail price is currently about 1,920.37 VND/kWh.
In addition, if EVN power plants or Phu My power plants use additional LNG, others will use domestic gas, which will also greatly affect their competitiveness in the market, because LNG prices are too high and will not be able to operate in the electricity market.
Power Plan VIII was approved by the Prime Minister under Decision No. 500/QD-TTg dated May 15, 2023, determining that by 2030, the structure of domestic gas-fired thermal power and LNG will reach 37,330 MW, equivalent to 25.7% of total power capacity, accounting for the largest proportion in the power source structure.
Of which, domestic gas thermal power is 14,930 MW, accounting for 9.9% and LNG thermal power is 22,400 MW, accounting for 14.9%.
According to data from the Vietnam Oil and Gas Group (PVN), during the recent period of tension in the power system, if diesel-fueled thermal power plants (DO) supplemented domestic gas supply, the fuel cost (approximately 23 USD/mmbtu) for power generation would be nearly double that of using LNG at world market prices (11-13 USD/mmbtu).
From PVN's perspective, the group believes that adding LNG to supplement domestic gas sources contributes to significantly reducing the electricity generation cost of gas turbine power plants compared to running on DO and FO oil instead, not considering the environmental aspect, the lower energy conversion rate from oil and the increased maintenance cost of running gas turbines on oil.
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