Illustrative image (Source: VNA) According to Agribank Securities Company (AGR), the first quarter of this yearsaw a lack of 300MW of thermal power due to a coal shortage. The risk of a coalshortage in the coming months has forced factories to actively seek importedcoal sources to supplement output. However, because coal prices are limited byVietnam Electricity (EVN), businesses will face difficulties in negotiatingprices with foreign suppliers to ensure profit margins for factories.
Although the profit margin of power enterprises is fixed under power purchaseagreements (PPAs), the competitiveness of coal-fired power plants usingimported coal and gas turbines will be lessened in the competitive electricitygeneration market.
This means coal-fired power enterprises face difficulties, while the advantagebelongs to hydropower enterprises. The high probability of a positivehydrological situation in the coming months will support the continued growthof hydropower enterprises.
International Research Institute for Climate and Society (IRI) predicts that LaNina will likely weaken in July-August and become strong again from Septemberonwards. This can cause heavy rainfall in the central western Pacific regionincluding Vietnam.
The Center for Hydro-meteorological Forecasting also forecaststhat there will be more rain in the North and North Central regions in July,August, September; and more in the Central and South Central regions inSeptember, October and November.
Previously, La Nina was active again in the first half of this year, especiallyin May-June.
Hydroelectricity plants used up to 50% of their capacity continuously from theend of May to the beginning of June during the noon peak hours and more than 90%of their capacity during the evening peak hours.
Analysts at Vietcombank Securities Company (VCBS) said that hydropowerenterprises will continue to benefit until 2023 when they can maximise outputin case La Nina lasts through the winter of this year. Notably, hydropowerplants in the North and North Central region will benefit greatly when their generationoutput increases sharply over the same period last year.
Hydropower has recently contributed to profit margin and cash flow forbusinesses with diverse power plant portfolios and multi-industry businesses.
Like Ha Do Group, revenue from the electricity segment grew by 97% in Q1,reaching 477.7 billion USD (20.5 million USD) in which Dak Mi 2 HydropowerPlant regularly exceeds 20-50% of the monthly plan.
Two hydropower plants in Quang Nam province including Dak Mi 2 and Song Tranh4, along with the 7A Wind Power Project with a capacity of 50MW are the maindrivers of Ha Do revenue and profit growth. Currently, its subsidiaries areoperating 314MW of hydroelectricity, 50MW of wind power and 98MWp of solarpower.
At Refrigeration Electrical Engineering Company (REE), the hydropower segmentaccounted for a large proportion of the total electricity portfolio atsubsidiaries and associated companies. Therefore, analysts expect this tocontinue to be the main contributor to business results until the end of theyear.
The hydropower capacity of this enterprise is currently over 480MW, with mostof the plants located in the Central, Central Highlands, and Southern regions.Previously, REE Energy Company (REE Energy) increased its ownership in VinhSơn-Sông Hinh Hydropower Company (VSH) to 50.5%.
According to REE Chairwoman Mai Thanh, raising ownership to a controlling stakeallows REE to participate more actively in VSH's strategic decisions. The ThuongKon Tum hydropower plant project officially came into operation in April 2021after more than 12 years of construction and contributed more than 976 millionkWh of electricity output by the end of 2021.
Regarding coal-fired power, REE has significantly reduced its investments underthe initiative of the Global Joint Declaration on the shift from coal to cleanenergy that Vietnam has committed to at COP26. Specifically, REE has reducedits ownership in Quang Ninh Coal Thermal Power Company (QTP) from 8.04% to only0.98% and is expected to divest the rest in the near future./.
VNA
