Energy demand to outpace supply in short term

November 25, 2022 - 09:55
Electricity demand is growing so fast that insiders believe it would outstrip domestic supply in the short term, leading to a shortage of 27.7 billion kWh by 2025.


Phả Lại Thermal Power Plant. Phả Lại Thermal Power JSC, which runs the plant, made a net profit of VNĐ155 billion in Q3/2022. — Photo

HÀ NỘI — Electricity demand has been growing steadily since 2021 and is expected to surpass domestic output in the short term.

According to VietinBank Securities (VBS), electricity demand in Việt Nam is projected to grow by 8.5 per cent annually in the next five years, mostly coming from manufacturing and construction sectors.

The fast-paced demand is forecast to exceed domestic output by 13.3 billion kWh in 2023 and 27.7 billion in 2025, leaving the country with no choice but to import liquefied natural gas and generate more thermal power to pick up the slack.

VBS did not expect renewable energy to contribute much to the output between 2023 and 2025 as there are still a number of obstacles in the way of green projects. However, the transition to renewable energy has been well underway and this type of energy is expected to take the front seat after 2025.

Vietnam Electricity was concerned that the backup capacity rate would drop steadily after 2023, leading to electricity shortages in the short term.

Specifically, the backup capacity rate is projected to fall to 18 per cent in 2025 with electricity output falling short of demand by 27.7 billion kWh. In the North, the rate is likely to stay as low as 10 per cent during the period.

Mirae Asset said the country has planned to purchase electricity from Laos to fill the supply-demand gap. 

To this end, the Nậm Mô-Tương Dương Electricity Transmission Line has been built to transmit electricity from Nậm Mô Hydropower Plant to Việt Nam. The line has reached 91 per cent of its completion and is slated to operate in November.

On the bright side, electricity producers raked in huge profits in Q3/2022 on the back of the mounting power demand.

Miền Trung Power Investment & Development JSC (HNX: SEB) made revenue of VNĐ66 billion, up 50 per cent year-by-year. Its after-tax profit hit VNĐ31.3 billion, soaring over one-hundred-fold against last year.

Nước Trong Hydropower JSC (HNX: NTH) followed suit with an after-tax profit of VNĐ10.4 billion, over twenty times higher than the figure in 2021. A Vương Hydropower JSC was riding high with earnings of VNĐ180 billion, nearly fourfold more profitable than that of the previous year.

Vĩnh Sơn-Sông Hinh Hydropower JSC (HOSE: VSH) earned VNĐ220 billion, in contrast to Q3/2021 when it was running at a loss of VNĐ42 billion. Phả Lại Thermal Power JSC (HOSE: PPC) posted a net profit of VNĐ155 billion, against a loss of VNĐ35 billion in Q3 last year.

Other producers that made big money in Q3 amid rising power demand include Hải Phòng Thermal Power JSC with an after-tax profit of VNĐ41 billion, Quảng Ninh Thermal Power JSC with VNĐ147 billion, Bà Rịa Thermal Power JSC with VNĐ86.5 billion, and Thác Bà Hydropower JSC (HOSE: TBC) with VNĐ105 billion.

ACB Securities said energy security is a top priority for the Vietnamese Government since the energy sector is the country's engine of growth. 

The company also said the sector's outlook is bright in the short term thanks to firms' post-pandemic recovery. — VNS