VIETNAM NEED COAL

BLOOMBERG- Apr 24, 2024 - Vietnam is urging coal miners to maximize production before the hot summer months, the latest emerging nation turning to the dirtiest fossil fuel to meet soaring power use.

Weaker output from hydro facilities is already boosting the need for coal-fired power generation — especially in the northern regions — to meet higher-than-expected demand, the government said in a statement late Tuesday. Prime Minister Pham Minh Chinh asked coal companies to increase exploration capacity, according to a notice over the weekend.

Vietnam, which gets most of its power from coal, is rushing to avoid a repeat of last year, when a shortage of the mineral, blistering hot weather and drought forced it to cut electricity to northern industrial parks that house many multinational companies. With temperatures set to rise even further this summer, it is joining countries including China and Indonesia in turning to the fossil fuel to ensure the lights stay on.

Temperatures in some areas have already hit 40.4C (105F) in April, the highest for the month since 2016, according to the national weather agency. Meanwhile, some water reservoirs have dropped to just 25% of their seasonal average, threatening to curb power generation when it’s needed most, the government said.

The hot weather will boost electricity consumption, with demand expected to increase 13% in May and July from a year earlier, up from a previous estimate of less than 10%. The government has already asked manufacturers and households to put in place power-saving measures and curb consumption during peak hours.

Vietnam is also turning to China to help meet a fraction of the shortfall. Vietnam Electricity Group will raise electricity imports from its neighbor about 60% higher than planned, Thanh Nien newspaper reported on Tuesday.

The nation, which began importing liquefied natural gas last year, is also struggling to secure supply of the seaborne fuel after a recent jump in prices. While Vietnam Electricity Group is trying to use LNG for a southern power plant in April and May, PetroVietnam Gas recently decided not to purchase a cargo for June due to high offer prices.

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