27-6-2012 OVERVIEW OF ENERGY SECTOR IN VIET NAM AND PARTNERSHIP INVESTMENT OPPORTUNITIES Nguyen Thai Son Director of Planning Department General Directorate of Energy MOIT
1 Content Overview of socioeconomic Strategy for national energy development Current status and development plan Power sector Renewable energy sector Oil and gas sector Coal sector Investment proposals Q&A
Overview of socialeconomic Introduction 2 Current status and development plan Area 331.150,4 km2 Population 86,2 mil Number of provinces 63 GDP growth rate - 2006-2010 7%/year - Year 2011 5,9%/year - First 4months of year 2012 4% - Planning for period of 2011-2015 6,5-7%/year
Development stratery Strategy for national energy development (Decision 1855/QĐ-TTg dated 27th December 2007) - - Energy development must be closely linked to national social - economic development strategy and ensure a step ahead at high speed, sustained, coordinated, diversification of energy sources and energy saving technologies. - Gradually set up the energy market, diversification of ownership and business methods, aims to satisfy the best interests of consumers. Accelerate the abolishing subsidies and remove exclusive, advanced to eliminate the implementation of social policy through energy prices; - Synchronized and rational development of energy system: electricity, petroleum, coal, new and renewable energy, including interest in clean energy development, priority development of new and renewable energy; - Improve efficiency, energy efficiency business. Focus on investment in energy efficiency, reduce losses; - Development of energy tied to preserving the ecological environment, ensuring the implementation of sustainable energy development. 3
Power sector Current status Generation share & load growth 2011 Total installed capacity 23500MW Commercial electricity 93,8 bil kwh Electricity growth rate Period of 2006-2010 13,7% Year 2011 9,5% CURRENT STATUS OF GENERATION SHARE Depend on owner Depend on kind of source PVN 10% Nhập khẩu 4% Khác 1% IPP, BOT nước ngoài 10% Nhập khẩu 3.7% Khác 2.8% TKV 3% EVN 54% Tuabin khí 33.1% Thủy điện 40.3% Cổ phần 15% Tư nhân 3% Nhiệt điện dầu 2.7% Nhiệt điện than 15.1% Nhiệt điện chạy khí 2.3% 4
Power sector Ph íclong U«ngBÝ 5 Current status Grid Voltage Line (km) Substation (MVA) 500kV 3,890 10,650 Voltage Line (km) Substation (MVA) 220kV 10,015 22,004 110kV 13.449 5.960 6-35kV 135,371 39,804 LV 240,424
Power sector Viewpoints for development a) Development of the power sector must be associated with national social - economic development strategy, ensure enough electricity to supply the national economy and social life. b) Efficient use of energy resources for power development internally the country, combined with the import of power, reasonable fuel imports, diversification of primary energy sources for electricity production, fuel conservation and ensure energy security for the future c) Gradually improve the quality of electric power to provide electricity services to the increasing quality. Implementation of the electricity price under the market mechanism to encourage investment in power sector development and encourage the use of power saving and effective. d) Power development along with protecting natural resources, environmental protection ecological guarantee the country's sustainable development e) Progressive formation and development of competitive electricity markets, diversifying forms of investment and trading. Only State monopoly transmission grid to ensure the security of national energy system. f) Development of power sector based on the rational use and effective source of primary energy resources of each region; to continue promoting rural electrification, guaranteed to provide full and continuous and safety for electricity demand in all regions nationwide. 6
Power sector Development Plan Generation share & elect. growth rate Electricity growth rate Period of 2011-2015 Period of 2016-2020 Period of 2021-2030 14,1-16%/yr 11,3-11,6%/yr 7,8-8,8%/yr 160,000 140,000 120,000 100,000 80,000 60,000 40,000 Nuclear Power Renewable Energy Imported Coal Fired Thermal Power Oil and Gas Fired Thermal Power Hydropower & Pump Storage 20,000 0 2015 2020 2025 2030 7
Power sector Development Plan Transmission grid CHINA Thac Ba Lai Chau Viet Tri Soc Son Son La PhLai Chem Uong Bi Ha Dong Mai a Dong Quang Ninh Hai Phong HOA BINH Thuong Din Tin Nho h Quan Ninh Binh Thanh Hoa LAOS NORTHERN REGION Vinh Ha Tinh CENTRAL Dong Hoi REGION Quang Tri Da Nang MAP FOR NATIONAL POWER SYSTEM PLANNING TO 2030 Ban Sok Yaly Plei Ku Sam Bor CAMBODIA Doc Soi Vinh Son Quy Nhon Krong Buk SongHinh D.Nai3&4 Nha Trang Di Linh Da Nhim Thac Mo Tan Dinh Tri An Bao Loc Hoc Mon Song Phu Lam Nhon May Trach Nuclear Power Nha Be Phu My O BRia Cai Lay SOUTHERN Rach Mon Gia TrNoc a REGION a NOTE 500kV: 500kV line (- 2020) 500kV: 500kV line (- 2010) 500kV: Existing 500kV line 220kV: Existing 220kV line 500kV substation(- 500kV 2020) substation(- 2010) Existing 500kV substation Existing 220kV substation Existing TPP 8
Power sector Development Plan Construction volume 500kV transformer Period of 2011-2015 Period of 2016-2020 Period of 2021-2025 Period of 2026-2030 Region No. of stat. No. of transf. Cap. (MVA) No. of stat. No. of transf. Cap. (MVA) No. of stat. No. of transf. Cap. (MVA ) No. of stat. No. of transf. Cap. (MVA) Northern 8 11 6750 11 13 13100 11 14 12700 6 9 7500 Central 1 2 900 4 4 2400 1 1 900 4 4 2550 Southern 11 14 9450 11 13 11250 10 13 10800 10 13 10350 Total 20 27 17100 26 30 26750 22 28 24400 20 26 20400 500kV transmission line Region Period of 2011-2015 Period of 2016-2020 Period of 2021-2025 Period of 2026-2030 No. of trans. lines Length (km) No. of trans. lines Length (km) No. of trans. lines Length (km) No. of trans. lines Length (km) Northern 8 1443 18 2015 7 680 5 760 Central 3 1074 4 630 0 0 3 920 Southern 13 1361 11 1890 3 1554 6 1044 Total 24 3878 33 4535 10 2234 14 2724 9
Power sector Development Plan Construction volume 220kV transformer Period of 2011-2015 Period of 2016-2020 Period of 2021-2025 Period of 2026-2030 Region No. of stat. No. of transf. Cap. (MVA) No. of stat. No. of transf. Cap. (MVA) No. of stat. No. of transf. Cap. (MVA) No. of stat. No. of transf. Cap. (MVA) Northern 68 74 155438 75 82 18063 64 76 17400 72 87 21250 Central 22 24 3925 20 20 3750 26 27 6000 26 27 5750 Sounthen 47 73 16500 56 75 17250 66 81 19375 78 107 26250 Total 137 171 175863 151 177 39063 156 184 42775 176 221 53250 220kV transmission lines Region Period of 2011-2015 Period of 2016-2020 Period of 2021-2025 Period of 2026-2030 No. of trans. lines Length (km) No. of trans. lines Length (km) No. of trans. lines Length (km) No. of trans. lines Length (km) Northern 60 3864 41 1584 44 1606 31 2168 Central 28 2867 15 1546 9 1362 5 916 Sounthen 70 3906 45 2175 41 2584 41 1936 Total 158 10637 101 5305 94 5552 77 5020 10
Power sector Development Plan Capital investment Total Capital Investment needed/ Average Capital Investment per year (Bil. USD) Items 2011-2015 2016-2020 2021-2025 2026-2030 2011-2030 I- For Power generation 22,076/ 4,415 28,830/ 5,766 27,005/ 5,401 32,441/ 6,482 110,322/ 5,516 II- For Grid 7,245/ 1,449 10,523/ 2,105 12,345/ 2,469 15,868/ 3,174 45,981/ 2,299 Total 29,321/ 5,864 39,353/ 7,871 39,349/ 7,870 48,280/ 9,656 156,303/ 7,815 Investment ratio of power project in period of 2011-2020 No. Investor Capacity (MW) Investment ratio 1 EVN + TKV+PVN 26.874 49,49% 2 BOT 16.128 29,70% 3 IPP + Others 11.292 20,80% Total 54.294 100,00% 11
Power sector 12 Roadmap for electricity tariff Competitive Generation Market (VCGM) Electricity Wholesale Market Electricity Retail Market 2010 2014 2016 2022 2024 Pilot Operation Full Operation Pilot Operation Full Operation Pilot Operation Full Operation
Renewable Energy sector Avoided cost tariff (Decision 18/2008/QĐ-BCT dated 18th July 2008) -The avoided costs of the national power system is calculated when there is a (01)kWh power from small power plants using renewable energy is emitted into the distribution grid; -Avoided costs as production costs of the generator 1kWh have the highest cost in the national electricity system, these costs can be avoided if buyers purchase1kwh from a small power plants using renewable energy replacement. SUPPORTING MECHANISM FOR WIND POWER DEVELOPMENT PROJECS (Decision 37/2011/QĐ-TTg dated 29 th June 2011) Underwriting electricity produced from grid-connected wind power plants; Investment incentives, taxes, fees; Preferential land infrastructure; Support price of electricity for grid-connected wind power project 13
Renewable Energy sector Development Plan Resource Capacity of Renewable Energy on-grid (MW) Capacity 2011-2015 2016-2020 2021-2030 2011-2030 Total 1198 2408 9588 13194 Wind power 213 780 5200 6193 Small Hydro power 895 1100 2380 4375 Biomass (solid) 50 305 1500 1855 Waste 39 100 200 339 Geothermal 0 80 198 278 Solar power 1 9 45 55 Biogas 1 34 65 100 Capacity of Renewable Energy off-grid (MW) Capacity 2011-2015 2016-2020 2011-2020 Solar system 12,3 10 14 Small Hydro power (off grid) 31,2 25,6 58 Biogas 1,3 1 5 Wind power-diesel system 3,6 3 8 Solar-diesel system 4,6 3,8 8 wind-diesel-solar system 3.6 2,3 9 Total 56,7 45,7 102,4 14
Renewable Energy sector Development Plan Capital investment For grid-connected electricity from renewable energy sources for the period of the chosen scenario (20 years) with average investment rate of 1.34 million USD/MW (13.194MW). However, this capital will be invested by the mobilize capital of enterprises. Capital estimated 350.000 billion VND. For electricity from off-grid renewable energy source: Total investment of 14.969 billion VND. This support capital is invested by the state. For renewable energy use for heating: The total investment for the period was 42,000 billion VND. This capital is invested by people for household equipment and installation. It will be considered a small support in the early stage to stimulate using renewable energy movement and market development. The total subsidies for the basic plan implemented in the period from 2011 to 2020 with the current calculation is 20.773 billion VND. In particular for electricity from renewable energy on-grid is 3953 billion (19%), renewable electricity off-grid is 14.969 billion VND (72%) renewable heat is 1857 billion VND (9%). 15
Oil &Gas sector 16 Viewpoints for development Effective use of petroleum resources in the country, and to promote investment, search, exploration and exploitation of oil and gas abroad, combined import and export as a basis for sustainable development of the petroleum industry firmware, ensure energy security for the economy. - Developing internal resources, combined with expanding international cooperation, attracting foreign investment in search activity, exploration, increases in oil and gas reserves verified. - Prioritize search, exploration and exploitation of the deep water, offshore. - Encourage participation of all economic sectors and foreign investment in developing the field of processing, distributing products and services etc..
Oil &Gas sector Planning Exploration, exploitation, processing, transportation 1. Search, petroleum exploration: oil and gas reserves reach 35-45 million tons of oil equivalent / year. 2. Oil and gas exploration: 3. Development of gas industry: Exploitation (million tons oil equivalent / year) + Development towards diversification of markets, gas will be provided to the industry: power generation, fertilizer, chemical, industrial, transportation and civil-scale production of about 19 billion m3 in 2025. + Research pipeline connecting East - South West, a gas pipeline as a basis for transnational connection with gas pipeline in Southeast Asia. + Strengthening international cooperation and selection of strategic partner capable of longterm gas supply LNG, CNG, DME... from Russia, the Middle East, Australia, Africa... etc.. + Prepare infrastructure, promote and encourage the construction contractor collection systems offshore. + Cooperation, research technology solutions to recover gas is burned off at the platform in separating the highvalue products such as Ethan, propane-butane(lpg). Development and exploitation of gas fields with high CO2 content. + Research and Development projects of gas to form combinations of oil and gas industry, building separation Ethan tower system at the treatment plants to build gas processing plants Ethanethylene; processing gas into liquid fuels (GTL), DME from methanol. 4. Oil and gas processing industry: Exploiting overseas (million tons / year) Crude Oil (million tons / year) Gas (million m3/year) Period to 2015 25 38 18 20 8 --19 Period 2016-2025 40 45 7 --14 12 16 8 --19 + By 2015, finish 3-5 petrochemical refineries construction with total capacity of filter around 26-32 million tons/year, construction and commissioning of 1-2 production of petrochemical products basic petrochemicals. + By 2025, complete the expansion and completion of construction 6-7 petrochemical refineries with total refining capacity of 45-60 million tons/year,50% meet the needs basic petrochemical products.... 17
Oil &Gas sector 18 Development Plan Capital investment (mil. USD) No. Type of Investment 2011-15 High Scenario (Billion USD) 65,170 1 Oil and gas exploration 28,784 2 Transportation &collection of gas 2,467 3 Gas Processing Plant 1,816 4 Oil Refinery & Petrochemical 18,785 5 Petroleum Services 10,983 6 Petrol & LPG depots 2,100 7 Topics, scientific research 235 The participation of the PVN: 26,020
Coal sector 19 Current status Opencast: + 5 mines with a capacity of over 2 million tons/year + 15 mines with a capacity of 0,1-0,7 million tons/year + A number of extraction with a capacity of less than 0.1 million tons/year Underground: + 9 mines with a capacity of over 1 million tons/year + over 20 mines with a capacity of less than 1 million tons/year Extraction method Mining production in the period 2003-2010 Unit 2003 2004 2005 2006 2007 2008 2009 2010 Total Opencast Mil. tons 12.98 17.33 22.06 26.1 26.78 25.33 25.76 26.52 182.86 Underground Mil. tons 6.81 9.78 12.48 14.71 16.33 17.6 18.17 20.44 116.32 Total Mil. tons 19.79 27.11 34.54 40.81 43.11 42.93 43.93 46.96 299.18
Coal sector Viewpoints for development - Developing the coal industry on the basis of mining, processing, cost-effective use of coal resources of the country, to serve the domestic demand is primarily to ensure national energy security. - Development of sustainable coal industry, associated with effective protection, improve the ecological environment of coal - Maximize internal resources (capital, ability to design and manufacture of equipment in the country, etc.) - Promoting foreign investment in exploration and exploitation to supplement the long-term coal for domestic needs. - To diversify forms of investment and business in the coal industry. To do business under the coal market is the management of the State to serve the aim of ensuring national energy security. 20
Coal sector Planning Exploration, exploitation, processing 1. Coal exploration: a) Northeast coalfield: - Distribution mainly in Quang Ninh, a part in Bac Giang and Hai Duong. This area has resources and reserves of the country's largest anthracite coal are mobilized primarily on 2030 planning. - By the end of 2015, completing the resources exploration and coal reserves of upper-level and a minus 300m area for the North East coalfield. By 2020, basically complete the exploration of coal to the bottom floor. b) Red River delta coal basin: - Distribution is mainly in the provinces of Thai Binh and Hung Yen, Nam Dinh, have great potential in type A bituminous coal (sub - bituminous), low levels of exploration, mining conditions difficult, complex and sensitive environment, ecology. - During the period 2012-2015, selected area contains some promising coal, geological conditions - suitable for conducting mining exploration investment for the test harness. - By 2030, completed basic exploration area contains coal mining favorable conditions improve Khoai Chau - Tien Hai. 2. Coal Mining: + Year 2012: 45-47 million tons; Year 2015: 55-58 million tons; Year 2020: 60-65 million tons; Year 2025: 66-70 million tons; Year 2030: greater than 75 million tons. 3. Processing of coal: Strive to 2020, processing of coal development in product diversification (direct fuel combustion, coal for metallurgy, coal gasification, coal to liquid fuels, raw materials for chemical industry etc...) 21
Coal sector 22 Development Plan Capital investment - From year 2015, Vietnam will have to import coal; - Total capital investment needs for the coal sector to 2030 about 691 trillion VND (equivalent to 33billion USD); - The average capital investment needs for the coal sector to 2030 about 34.55 trillion VND/year (equivalent to 1,6 billion USD/year).
Invest. proposals Power sector STT Project name Type of investment Location (province) Operation year Capacity (MW) Total investme nt (bil USD) 1 O Mon II BOT Can Tho 2016 750 0,6 2 Quang Tri IPP/BOT (potential BOT) Quang Tri 2019-2020 2x600 2,3 3 Vung Ang 3 BOT Ha Tinh 2026-2028 4x600 5 4 Pump storage PP No.3 IPP Ninh Thuan 2028-2030 4x300 0,8 Progress The project is preparing bidding document to select investors. International bidding. Ministry of Industry and Trade is studying the investment guidelines of project preparation. The project is preparing bidding document to select investors. International bidding. 5 Van Phong 2 BOT Khanh Hoa 2021 2x660MW 2,4 Not yet implemented 6 Nam Đinh 2 BOT Nam Đinh 2025 2x660MW 2,4 Not yet implemented 7 Son My 1 BOT Binh Thuan 2018 5x390MW 2 8 Song Hau 2 BOT Hau Giang 2027 2x1000MW 3,5 Total 12140MW 19 Ministry of Industry and Trade is studying the proposals of the investors for investment in BOT type and plan to evaluate and approve the feasibility study (in case the project is approved by competent authorities as BOT type) Ministry of Industry and Trade are working to guide investors in project preparation 23
Invest. proposals Oil & Gas sector No. Project name Size Location Operation year 1 2 3 4 Upgrading and expanding Dung Quat oil refinery The Nam Van Phong refinery Gas Pipeline Nam Con Son 2 Long Son oil refinery from 6.5 (existing) to 10 million tons/year 10 million tons/year ~400km length, capacity of 7 billion m3 /year 10 million tons/year Dung Quat Economic Zone, Quang Ngai province Van Phong Economic Zone, Khanh Hoa province Ba Ria Vung Tau province Long Son oil and gas industrial zone, Ba Ria - Vung Tau province To begin the construction in the period 2014-2017, commercial operation in 2017 Total investm ent (bil. USD) Calling for foreign investm ent ratio 2,7 49% 2015-2020 8 49% Commercial operation in 2015 1,3 49% 2015-2020 8 75% Total 20 Status & progress Investment project are set up Investment project are set up and looking for joint venture partners set the overall technical design (FEED) Study and calling for investment 24
Invest. proposals 25 Coal sector To request assistance in the field of research in the Red River Delta coal basin. Support the implementation of projects related to environmental protection and safety in coal mining. Enhancing ODA aid for projects in infrastructure development in Vietnam's coal industry, human resources training.
Question & Answer 26