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Vietnam Power Sector: 2H 2019 outlook supports thermal power plants

    Vu Nguyen
    Vu Nguyen

    Autos & Parts

    Rong Viet
    12 September 2019
    Published by

    In this 17-page report on Vietnam's power sector, we provide detailed analysis of Petrovietnam Power (POW) and Refrigeration Electrical Engineering Corp (REE).

    Hydropower and gas supply in 2H2019 is expected to remain limited

    According to the National Ocean Atmosphere Administration (NOAA), the probability of a neutral climate is over 50% in the year from early August 2019. Therefore, in 2H2019 weather will be neutral.

    According to EVN, the total amount of water reserve in hydropower plants at the end of 2Q2019 was 80% lower than normal level, equivalent to 12.49 billion kWh.

    According to EVN, gas supply to Ca Mau power plant, a major power generator in the South, will witness a strong decline in 4Q2019, resulting in another constraint in power supply in the region.

    In addition, solar power still contributes a marginal share to National power supply (2.3%), and thus cannot compensate for the shortfall of hydropower and gas-fired power supply.

    Limited power supply strongly supports CGM price in 2H2019

    Powerplants, which have adequate input supply, will be able to capitalise on favourable market conditions. Most thermal power plants that we follow, except for Vung Ang 1 TPP, have arranged adequate coal supply for 2H2019 production, implying a positive outlook on 2H2019 core earnings.