Approval of EVN's 5-year production and business plan in Vietnam

The Prime Minister of Vietnam has approved EVN's 5-year production and business plan. What are the implementation plans for each area? - Quoc Bao (Binh Duong)

Approval of EVN's 5-year production and business plan in Vietnam

Approval of EVN's 5-year production and business plan in Vietnam (Internet image)

Regarding this matter, LawNet would like to answer as follows: 

On April 26, 2024, the Prime Minister issued Decision 345/QD-TTg approving the 5-year production and business and investment development plan for the period 2021–2025 of Vietnam Electricity.

Approval of EVN's 5-year production and business plan in Vietnam

The implementation plan covers the following areas:

(1) Electricity supply sector

Ensure to meet electricity demand with an average commercial electricity growth rate of about 7%/year in the period 2021–2025 (in which commercial electricity growth in the years 2022–2025 is about 7.82%/year). Prepare a plan to be able to meet enough electricity demand with a higher commercial electricity growth rate.

Table. Electricity demand for the period 2021 - 2025

Indicators

Unit

2021

2022

2023

2024

2025

Electricity produced and purchased by EVN

Million kWh

246.247

262.045

271.037

294.390

331.172

Growth

%

3,3%

6,42%

3,43%

8,62%

12,49%

Commercial electricity

Million kWh

225.298

240.612

248.383

269.331

304.440

Growth

%

3,85%

6,80%

3,23%

8,43%

13,04%

(2) Investment in electricity generation

- Commenced 07 electricity generation projects with a total capacity of 3,643 MW and 150 MWp, including Hoa Binh hydropower plant, Ialy hydropower plant, Quang Trach I thermal power plant, Tri An hydropower plant, renewable energy hydroelectric plant Bac Ai, and Phuoc Thai 2 and 3 solar power plants.

- Put into operation 04 electricity generation projects with a total capacity of 840 MW and 150 MWp, including Hoa Binh hydropower plant, Ialy hydropower plant, and Phuoc Thai 2 and 3 solar power plants.

- Continue to implement measures to accelerate the investment progress of key electricity generation projects in order to commission the remaining 06 projects in the period of 2026–2030 with a total capacity of approximately 5,803 MW, including Quang Trach I thermal power plant, Tri An hydropower plant, Dung Quat I&III thermal power plants, Quang Trach II LNG plant, and Bac Ai renewable energy hydroelectric plant.

- Proceed with investment preparation procedures for expanding existing hydropower plants, renewable energy hydroelectric plants, and liquefied natural gas (LNG) projects according to approved plans. Additionally, continue to study and supplement offshore wind power projects, expand the remaining existing hydropower plants (Son La, Lai Chau, Huoi Quang, Ban Chat), low-head hydropower plants, etc., to have sufficient basis for reporting to the competent authorities for consideration and approval to be included in the Power Development Plan VIII Implementation Plan.

(3) Investment in electricity grid development

- Invest in 500–220 kV power grid projects specified in the Power Development Plan VIII, including the completion and operation of 225 transmission projects with a total length of approximately 10,500 km and a total transformer capacity of about 63,000 MVA. Focus on investing in and completing key transmission line projects of 500 kV from Quang Trach (Quang Binh) to Pho Noi (Hung Yen) by 2024.

- Invest in a synchronized transmission and distribution power grid system in line with the development of power generation, suitable for the country's socio-economic development plan and local requirements, ensuring safe and efficient operation, and meeting the N-1 criterion for important load areas and N-2 for exceptionally important load areas.

- Invest in upgrading transmission line routes and loops to transmit electricity from large power centers to load centers, interconnecting regional power systems to increase flexibility and reliability of power supply, enhancing transmission capacity on the North - Central section, and increasing transmission capacity to accommodate renewable energy power sources.

- Research and apply high-voltage transmission technologies greater than 500 kV and direct current transmission. Apply GIS substations, digital substations, underground substations, multi-circuit, multi-voltage level transmission lines, etc., to reduce land occupation. Apply new control and protection equipment for synchronous substations with infrastructure.

- Maintain existing interconnection lines for electricity trading with neighboring countries. Study interconnection power grids to increase electricity imports with neighboring countries, including 500 kV and 220 kV transmission lines, transformer substations, and AC-DC-AC (back-to-back) converter stations.

- Invest in the synchronized development of distribution power grids, in parallel with the development and modernization of transmission power grids in accordance with the Power Development Plan, aiming to directly sell electricity to customers at various voltage levels participating in the electricity market.

- Invest in distribution power grids with the goal of improving the reliability of power supply and developing smart grids. Continue to implement upgrades and standardize medium-voltage power supplies.

(4) Investment in rural, mountainous, and island electricity supply

- Implement investment projects for rural electricity supply in localities assigned in the Program for Rural, Mountainous, and Island Electricity Supply in the period of 2021–2025, in line with the objectives of the program and the availability of state budget funds in the period of 2021–2025.

- Continue to allocate funds for the renovation and expansion of existing power grids to ensure reliable power supply and quality of electricity, meeting the electricity consumption requirements of people and businesses.

- Focus on investing in rural electricity grids to contribute to increasing the proportion of rural communes meeting criterion 4 (electricity criterion) according to the National Target Program for New Rural Development in the period of 2021–2025.

(5) Investment capital plan

- The total investment capital requirement for the entire EVN Group is 479,000 billion VND, including:

+ Net investment capital: 278,215 billion VND

+ Investment in electricity projects: 1,455 billion VND

+ Repayment of principal and interest on loans: 199,330 billion VND.

- The total investment capital requirement for EVN's Parent Company is 99,950 billion VND, including:

+ Net investment capital: VND 50,402 billion

+ Repayment of principal and interest: VND 49,548 billion

+ Capital contribution to invest in Vinh Tan 3 thermal power project will be updated and supplemented after the competent authority approves the capital contribution policy.

(6) Targets for business efficiency and labor productivity

- Reduce the electricity loss rate for transmission and distribution to 6.0% by 2025.

- Ensure electricity supply reliability: Reduce the average annual outage duration per customer (SAIDI index) to below 300 minutes by 2025.

- Ensure a higher rate of labor productivity growth compared to wage growth. Increase average annual labor productivity by over 8%.

(7) Financial sector

- Continue to implement retail electricity pricing according to the regulations in Decision 24/2017/QD-TTg or any amended, supplemented, or replaced documents. By 2025, the target for return on equity is expected to be 3%; the debt-to-equity ratio is less than 3 times; the self-investment ratio is greater than 30%; and the debt service coverage ratio is equal to or greater than 1.0. 

Nguyen Ngoc Que Anh

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