>> Power shortage may hurt industry and exports

>> Warning: power shortages during dry season

Power shortages have become one of the biggest barriers for investors doing business in Vietnam, experts said.

Simon Andrews spoke on the sidelines of the VBF in Hanoi on May 27.

“Some European firms have been discouraged from investing in Vietnam due to the power shortfall and major investment needed to build power plants,” head of the Infrastructure Working Group, Tony Foster, said at the Vietnam Business Forum (VBF) 2011 in Hanoi on May 27.

According to Mr. Foster, a lack of capital has exacerbated the country’s power thirst.

“Vietnam is estimated to need as much as USD160 billion for investment in infrastructure by 2020, including power facilities. Of that sum, available sources can meet only USD100 billion,” he noted.

In order to offset the shortfall, efforts should be made to stir up FDI investment, he added.

How to boost power supply?

“Construction of more power stations and improved energy use efficiency should be combined in order to boost power supply in Vietnam,” IFC Regional Manager for Vietnam, Cambodia, Lao PDR and Thailand Simon Andrews, said on the sidelines of the VBF.

He continued to say that due attention should be paid to building increasing numbers of power plants, and to do this, the country needed to raise sufficient capital for infrastructure development to encourage investment in the energy sector.

“Vietnam is estimated to need between USD15 and USD16 billion per year to invest in infrastructure projects by 2020. Half of which should come from the state budget, with the other half sourced by the private sector.”

“In order to encourage private companies to invest in power projects, the Government should map out a clear legal framework, policies and priorities, along with its support for their investment,” he emphasised.

As part of efforts to best use the available energy sources, he said, regulations should be drafted to foster energy efficiency.

When asked about methods to reduce carbon dioxide emissions produced by thermal power plants, Andrew said, “During the construction of thermal power plants, efforts should be made to study and apply high-tech solutions to improve the efficiency of these facilities so as to reduce their impact on the environment.”

Use of combined cycle coal fired power plants is one technology that promises to improve power plant efficiency, he noted.

He added that converting gas turbines from the open cycle mode to combined cycle mode would increase plant efficiency.