Is gas-fired power the future for Vietnam?

While environmentalists affirm that use of gas-fired power will be inevitable in Vietnam, some energy experts think it is not the right time to think of developing this expensive type of energy in the country.

The Van Phong Economic Zone Board of Management has allowed the US-based Millennium Corporation to do the field work for the development of an $8 billion project on a gas-electricity complex.

In mid-June 2019, Prime Minister Nguyen Xuan Phuc agreed in principle on the proposals by the Ministries of Industry and Trade and Planning and Investment to allow Gazprom EP International B.V., a subsidiary of Gazprom from Russia, to develop the 340 MW Quang Tri mixed gas turbine power plant, using gas from Bao Vang field.

Commenting about the prospect of gas-fired power in Vietnam, Truong Duy Nghia, chair of the Vietnam Thermal Science And Technology Association (VTA), said on Dat Viet newspaper it is not feasible for now.

According to the expert, gas-fired power projects have advantages: they don’t require large land and don’t cause high pollution. In particular, the efficiency of gas use is much higher than coal.

Besides, gas-fired power plants can be activated very quickly: it takes just 10 minutes to start the machine. To activate coal-fired power plants, it takes hours to burn the boiler.

However, he warned of problems for Vietnam if it develops gas-fired power.

According to the expert, gas-fired power projects have advantages: they don’t require large land and don’t cause high pollution. In particular, the efficiency of gas use is much higher than coal.

The biggest problem is the high investment rate and high operation cost.

“When building gas-fired power plants, Vietnam will have to think of importing gas, which is very difficult work at this moment because of the lack of a pipeline, storage capacity and tanks,” he said.

Even if Vietnam can import LNG, the supply sources are limited because only a few countries have profuse supply, namely Indonesia, Australia, and the US. Meanwhile, import prices are very high.

The LNG price is $3.7 per MMBtu in the US, but it would be $9-10 higher for every 1 million MMBtu in Vietnam.

The high material price will increase the electricity production costs. While coal-fired electricity has production cost of 6-6.5 cent per kwh, the production cost is 13 cent per kwh for gas-fired electricity.

“The price is overly high compared to the people’s average income,” Nghia commented. “Therefore, it is unfeasible to develop gas-fired power projects.”

Meanwhile, other experts applaud gas-fired power projects, affirming that gas-fired power is a growing tendency in the world and Vietnam cannot go against the trend.

Nguyen Dang Anh Thi, an energy and environment expert from Canada, in his article on Thoi Bao Kinh Te Sai Gon in February 2020, affirmed that the investment rate of gas-fired power won’t be as high as people think, especially as the gas price has been decreasing in the last five years. With the price of $5 per MMBtu, the author estimates that the electricity price would be from 5.4 cents to 7.7 cents per kwh.