Vietnam eyes higher hydropower output this year

Vietnamese state-controlled utility Electricity Vietnam (EVN) aims to increase its hydropower output in line with a higher-than-average seasonal rainfall forecast for this year, potentially easing the burden on coal-fired utilities.

Heavy rains are forecast between June and November in parts of Vietnam, potentially raising hydropower reservoir levels and supporting hydropower generation. The higher than average rainfall could even cause flooding in some rivers, Vietnam's national center for hydro-meteorological forecasting said.

EVN said its priority in June would be to maximise "mobilisation of hydroelectric power plants with good water" levels. Higher hydropower generation could ease pressure on coal-fired utilities, especially as hydroelectricity accounted for 28pc of country's overall generation in May. Coal makes up the largest share of Vietnam's power mix, accounting for 44pc of overall generation last month.

Coal-fired utilities are facing tight domestic coal supplies, even though domestic output edged higher to 22.07mn t over January-May from 21.11mn t a year earlier.

Demand for imported coal is weak in response to higher international prices, with receipts of seaborne coal declining by 25pc on the year in April to 2.96mn t, provisional customs data show. Argus last assessed the Indonesian GAR 4,200 kcal/kg coal price at $85.94/t fob Kalimantan on 10 June. The price hit a historic high of $154.21/t fob Kalimantan on 22 October 2021, rising from an all-time low of $22.40/t on 11 September 2020.

Power demand has started to ease in some parts of the country with the onset of seasonal rains. EVN expects average power consumption to dip by 1.1pc in June from the previous year. Electricity generation stood at 23.34GWh last month, EVN said.

Calls for lower power use

Power consumption could also edge lower as authorities in some regions have called for a reduction in air-conditioning use.

EVN has asked households in the central highlands to "actively regulate their electricity use" as peaking hot weather conditions in the region could aggravate electricity consumption.

The advisory to households to reduce power consumption comes as EVN estimates power demand to rise by 2-3pc with a 1°C rise in temperatures.

Heatwaves in various parts of Vietnam in June last year caused power demand to hit an all-time high, with the higher temperatures boosting coal burn and demand for thermal coal imports.

By Saurabh Chaturvedi

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