Gov’t to VN coal producers: Hold production capacity
THE Vietnamese Ministry of Industry and Trade (MoIT) has said the Vietnam Coal and Mineral Industries Group (Vinacomin) and Dong Bac Corp must immediately implement measures to ensure coal production capacity for thermal power plants.
MoIT said in its Document No 1225/BCT-DK that in accordance with signed coal sale and supply contracts, especially build-operate-transfer (BOT) thermal power plants using domestic coal to avoid compensation for stopping thermal plants, the groups must keep production as committed in the signed contracts.
The MoIT also requested Vietnam Electricity (EVN) to direct the National Load Dispatch Centre (A0) to have a dispatch solution, notify the monthly updated mobilisation plan to the owner, and invest in coal-fired power plants to promptly arrange coal sources for electricity production.
Previously, the ministry received several documents from coal-fired power plant investors reporting that Vinacomin and Dong Bac Corp did not supply enough coal in the first two months of 2022 as per the purchase contracts.
Last month, the total volume of coal supplied by Vinacomin and Dong Bac Corp to EVN’s coal-fired power plants was 69.24 per cent of the volume signed, and much lower than the demand of the plants.
Vinh Tan 1 BOT coal-fired power plant was not supplied with enough coal according to the supply contract signed at the end of 2013, which may lead to the Vietnamese side having to compensate due to the shutdown.
Vinacomin made a written explanation about the reason for not recently supplying enough coal for electricity production, citing the impact of Covid-19 leading to a shortage of staff at coal mines.
The Russia-Ukraine conflict was also a remarkable development affecting the international energy market, it said.
The price of oil and gas in the global market is increasing rapidly.
For the first time in history, the price of European gas has reached $3,600 per 1,000 cubic metres, according to data from the ICE Commodity Exchange in London, UK, on March 7.
The gas futures price for April delivery at the TTF hub in the Netherlands increased to $3,639.1 per 1,000 cubic metres.
For companies using oil and gas as input materials, increasing prices will increase product costs. Gas-fired power plants are less competitive, and the current situation also negatively affects the share of output offered in the power generation market.
Transporting fuel by all modes of transport was also difficult due to sanctions, including seagoing coal ships, limiting the volume of coal circulating in the market and increasing the international coal price to an unprecedented record.
Last year, Vinacomin produced 4.2 million tonnes of coal while Dong Bac Corp produced 7.28 million tonnes in Quang Ninh province.