Nhon Trach Lesson | The Times

It is difficult to guess in this photo, when inspecting the factory on May 9, what Minister of Industry and Trade Nguyen Hong Dien was most worried about regarding the Nhon Trach 3&4 LNG power project, an important national project whose implementation problems so far could be put into "textbooks".

The biggest concern for policy makers now, if not an exaggeration, is nothing other than the two words Electricity Shortage capitalized. However, it seems that concerns and practical actions do not go hand in hand. There are projects and businesses investing in electricity production that are still struggling to overcome difficulties and do not know when they will have results. A typical example is the Nhon Trach 3&4 project in Dong Nai, a project classified as nationally important and a key energy sector project invested by the Oil and Gas Power Corporation (PVPower).

This is the first thermal power project being implemented in Vietnam using imported LNG with a total investment of 1.4 billion USD and a capacity of 1,624 MW. Up to this point, nearly 90% of the work has been completed, but, when it seemed that it would finish on schedule (test run in August 2024), the project encountered some "oh my god" problems.

No land to build cooling water discharge channel!

This story may sound like a joke, but it is true because PVPower is currently "tied" by Tin Nghia Corporation, the enterprise that is managing and using land in Ong Keo Industrial Park. The story here is simply that PVPower wants to rent land to build a cooling water discharge channel, an important item that without which the plant cannot operate. However, Tin Nghia has now "turned around", raising the rental price to 100 USD/m2 even though it was previously agreed in October 2021, so everything is frozen.

Minister of Industry and Trade Nguyen Hong Dien (3rd from left) during an inspection trip to the Nhon Trach 3&4 LNG power project invested by PVPower.

Now, after many months of complaining, PVPower is in a situation where it is not known who to wait for to resolve the issue, the Dong Nai Provincial People's Committee (Tin Nghia Corporation is difficult), or a higher authority? There have been many complaints, many reports, and most recently on May 9, 2024, PVPower once again, yes, once again, made a heartfelt presentation to Minister of Industry and Trade Nguyen Hong Dien during a working trip to Dong Nai with the aim of removing obstacles for the project.

At this time, the investor's wish is probably simpler than ever, which is to lease land directly from the local government, but it is not known when this wish will be thoroughly considered!

What is a reasonable electricity price?

One of the important conditions that determines the survival of a power plant project is the electricity price, and for Nhon Trach 3&4, this is even more important because it is related to the problem of importing LNG as well as borrowing from banks. However, finding a common voice with the electricity buyer, Vietnam Electricity Group (EVN), is very difficult at this time.

Actually, the current problem is how to change the way of thinking about what is reasonable? The investor requested Qc 72% to 90%, the selling price is around 2800 VND/kWh. With this proposal, EVN of course shook its head, the reason of EVN was announced very clearly that this requirement causes risks to increase electricity prices and is unfair to other types of power plants.

EVN's reaction is not unreasonable at this time, when the average retail price of 1 kWh is a little over 2,000 VND (excluding VAT). However, the irrationality or rationality of the electricity market should not be limited to the present time. Because, if we broaden our vision, once traditional power sources cannot be developed, combined with the pressure to implement COP 26, in the future, the price proposed by the investor will be appropriate.

Nhon Trach Lesson

The above two contents are two prominent difficulties of Nhon Trach 3&4 project. Of course, sooner or later these problems will be solved, so what needs to be done now is to consider what lessons can be drawn from this to promote other projects faster, avoiding the risk of power shortages in the near future.

Currently, the plan to implement the Power Plan 8 has been issued, and there is very little time left. Therefore, if everything is not summarized, evaluated and implemented according to a completely new mindset, the success of the plan will not be guaranteed.

In order for projects to be implemented quickly, the first thing is that related procedures need to be shortened to the maximum extent. The procedural process from the time of handing over to the investor until the project starts needs to be reviewed (including project appraisal) and completely removed inappropriate content that affects the implementation time. In Nhon Trach, a typical example that needs to be changed is land leasing, a task that takes too much time for the investor, directly affecting the project progress.

Not only that, with LNG electricity, it is necessary to determine that this is not a single project, because in reality it is a chain including LNG import, LNG storage, gas distribution, electricity production, connection and transmission, electricity sales... Therefore, when dealing with issues, it is necessary to stand on the perspective of the efficiency of the whole chain to achieve long-term benefits, otherwise it will be very confusing when the interests of the stages conflict with each other.

Ultimately, whether or not Plan 8 is effectively implemented depends entirely on people, and specifically on people here, the staff of each stage and level of ministries and localities. How they handle it, whether they have truly fulfilled their responsibilities with each submission, each official dispatch… all directly impact the progress and success of the project.

Here, perhaps we should not consider the Nhon Trach 3&4 project as belonging to PVPower only. According to the plan to implement Power Plan 8, by 2030 Vietnam will have 10 LNG power projects. This is May 2024, we can calculate how much time is left, but time is cruel because it waits for no one!

Source: https://thoidai.com.vn/bai-hoc-nhon-trach-199764.html