Southern Vietnam, which is home to commercial hubs like Ho Chi Minh City and manufacturing clusters such as Dong Nai and Binh Duong, may face more power shortages from 2017.
The country’s total power output is likely to fall short of the south’s demand by 10-15 percent, said Duong Quang Thanh, chairman of state monopoly Electricity of Vietnam (EVN).
The state utility plans to run more power plants on diesel to produce about 5 billion kilowatt-hours per year starting from next year to supplement supplies in the south, Thanh added.
He said shortages may be worse from 2018-2019, which will force EVN to increase its annual output from diesel to 8.5 billion kilowatt-hours per year.
Diesel-generated power costs twice as much as coal-fired electricity, said Cao Quoc Hung, deputy trade minister, explaining that diesel generators are expensive to operate and are used only when absolutely necessary.
State utility EVN has called for government support to construct a 500kV transmission line running from Vung Ang in the central province of Ha Tinh to Pleiku in the Central Highlands to provide more power to the south.
The new transmission line, which is expected to be connected to the north-south high-voltage power transmission grid in 2019, will tackle chronic power shortages in the south and reduce reliance on diesel, said the EVN chairman.
Vietnam is also investing and building more thermal power plants in the south to significantly increase capacity.
According to the World Bank, over 66.2 percent of the country’s energy consumption comes from fossil fuels.
Official statistics show Vietnam’s annual coal output is currently about 40 million tons.
The Vietnam Coal and Mineral Industries Group, also known as TKV, has submitted a proposal to the government to build coal-fired thermal power plants in the southern province of Tra Vinh and across the Mekong Delta.
The government has given the go-ahead for more thermal plants in the Mekong Delta and gas-generated power plants in the central provinces of Quang Nam and Quang Ngai.
Deputy Prime Minister Trinh Dinh Dung has urged the Ministry of Industry and Trade, EVN and TKV to join forces to minimize the risk of power shortages.
Vietnam’s electricity demand is expected to grow 13 percent annually in the next four years due to its fast-expanding economy.
The country’s economy has grown above 5 percent annually since 1999 and is forecast to hit 6.5-7 percent from 2016-2020.
In response to fast-growing power demand, Vietnam is buying electricity from neighboring countries, mostly from China, in order to avoid outages.
Vietnam aims to generate enough energy to power almost every home in the country by 2020.