Concerns are being raised that Vietnam’s northern provinces are likely to suffer from serious electricity shortages over the next few years. According to state-owned Electricity of Vietnam (EVN), slower than expected construction of electricity projects could even see shortages develop this year, especially in June and November.

EVN is speeding up power plant construction and is also considering purchasing power from China’s Ma Lu Ta hydro plant, which is expected to supply 400 MW to Vietnam by 2007. EVN also plans to upgrade existing thermal plants in order to boost capacity for the dry seasons of 2005 and 2006. An EVN affiliate, Electricity Company No 3, has also announced plans to build 17 small and medium hydroelectric plants between now and 2008 at a cost of VND6 trillion (US$380.5 million).

Aside from EVN, the government has given approval to the Vietnam Coal Corporation (Vinacoal) to develop a new 200 MW coal-fired plant in the northern Bac Giang province’s Son Dong district, about 80 km north of Hanoi. The plant is expected to cost around VND3.5 trillion ($224 million) and is scheduled to be operational in 2007. Vinacoal plans to develop eight new coal-fired plants with a combined capacity of 2,900 MW by 2010 and is currently building six plants with a combined capacity of 2,000 MW.

In other measures, EVN is also installing a second transmission line on a 500 kV north-south grid, with the section between Ha Tinh and Thuong Tin in Ha Tay expected being completed by March. Vietnam is already building a 220 kV line to neighbouring Laos and plans have also been mooted for the development of a transmission link between Vietnam and the Chinese province of Yunnan.

Meanwhile, foreign investors are hoping the government will approve a plan to reform the national tariff system that currently offers Vietnamese nationals lower rates than foreign interests. However, with the plan expected to deliver around a 10% cut in prices for foreigners, EVN would lose up to VND300 billion ($19.2 million) in 2005 if the new pricing scheme were approved. EVN’s development plans need about $14 billion over the next five years.