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Japanese firm keen on building coal-fired power plant

Released at: 17:46, 14/04/2017

Japanese firm keen on building coal-fired power plant

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J-Power meets with authorities in central Quang Ngai province to discuss the possibilities.

by Duy Anh

Japan’s J-Power is looking to develop a billion dollar, 4,400 MW coal-fired power plant at the Dung Quat Economic Zone in central Quang Ngai province amid robust energy demand in Vietnam.

At a recent working session with local authorities, the Japanese company sought permission to carry out a feasibility study for the plant.

The Quang Ngai Provincial People’s Committee asked it to develop a specific plan for the area of land to be used, the boundaries of the project, the total investment, the number of employees, and its commitment to curbing pollution. Only when such a plan is submitted will J-Power receive permission to carry out the feasibility study.

If it were to go ahead, construction would be divided into two phases. In the first phase, the plant will have a capacity of 2,400 MW and is slated to come into operation in 2028. In the second phase, capacity of 2,000 MW will be added, with the use of an integrated gasification combined cycle (IGCC).

J-Power plans to use coal imported from Australia, Russia, Indonesia or Vietnam to feed the plant and it has pledged to use cutting-edge technology to curb pollution.

Given the plant’s size, investment may well amount to billions of dollars. Normally, around $2 billion is needed for a power plant with a capacity of 1,200 MW under the build-operate-transfer (BOT) format.

Demand for energy in Vietnam is calculated to grow 11 per cent a year. According to a government plan, demand is projected to reach 235-245 billion kWh by 2020 and 352-379 billion by 2030. Thermal power will continue to hold the largest proportion.

Vietnam now has 20 or so coal power facilities. The government envisions lifting the number to 32 in 2020 and 51 in 2030. Fossil fuels supplied one-third of Vietnam’s power in 2016 and the plan is for this to increase to 45 per cent by 2030. Coal power capacity is to nearly triple from current levels to around 40,000 MW.

Many Japanese companies are drawn to the new business opportunity but so are their Chinese rivals. Mitsubishi Corp. has said it will build a 1,200 MW coal power plant in an economic zone in north-central Vietnam’s Ha Tinh province. The plant, the Vung Ang No. 2 project, is slated to begin in 2021 and the government estimates investment at $2.2 billion.

Mitsubishi will help manage the facility before handing over its operations to the State-run Electricity of Vietnam. The site is near the Vung Ang No. 1 plant, built by a Vietnamese company and boasting a similar generating capacity. Mitsubishi’s partner, Marubeni, is building a coal power plant near Hai Phong, which will likely grow rapidly as a port city. Sumitomo, meanwhile, is building a plant in the Mekong Delta’s Tra Vinh province, near Ho Chi Minh City.

Price-competitive Chinese companies are indeed key rivals. Chinese contractors are said to undertake nearly 90 per cent of tasks at fossil fuel plants in Vietnam, though the facilities themselves are not large. Russian and Malaysian contenders have also been getting into the coal power game, with many cooperating with Chinese partners.

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