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TKV is worried that there is not enough coal for electricity production

Vietnam Coal & Minerals Group (TKV) said coal mining experienced a decline due to workers infected with Covid-19, difficulty in importing, and high prices.

TKV has just sent a report to the Ministry of Industry and Trade regarding the situation of coal supply, before any request from the management agency. enough coal for electricity in all situations.

According to the plan for the first 3 months of this year, the amount of coal supplied to the thermal power plant is 8.5 million tons, equivalent to 23% of the output under the contract signed in 2022. Meanwhile, the registered power plant is nearly 9.74 million tons in the first 3 months, and TKV drew up a plan to supply 9.08 million tons.

However, as of March 14, the amount of coal supplied to the new power plant reached more than 6.3 million tons or equivalent to 17.15% of the output according to the signed contract.

The supply of coal for electricity is low, according to TKV, because in the first two months of this year, almost half of the workers in mines and coal mining units were infected with Covid-19. In late February and early March, many units under TKV only had 20% of employees working.

In addition, the reason is also the lack of coal imports. In the first three months of this year, TKV only imported 325,000 tons, so that the import output of mixed coal to supply thermal power plants was only 1.1 million tons, down 2.4 million tons compared to the plan.

The group said that the company has many solutions such as mobilizing coal supplies for processing, mixing domestically produced coal between regions… to increase the amount of clean coal produced domestically, but not make up for it, the amount of coal lost.

“Most of the coal stock comes from the Mao Khe and Uong Bi areas, which cannot be consumed directly for thermal power generation, but must be mixed with imported goods or other domestic sources,” explained TKV.

Coal is supplied to the thermal power plant in Quang Ninh.  Photo: Anh Minh

Coal is supplied to the thermal power plant in Quang Ninh. Photo: Anh Minh

The failure of coal imports as planned in the first 3 months of this year was also because EVN was late in accepting the mixed coal price mechanism declared by TKV based on the Price Law. This caused the company to delay and miss many opportunities to import enough coal to blend as planned.

At present, after the EVN has agreed on a pricing mechanism, it is very difficult to find a source to import coal and not to import a suitable quality grade for blending.

Accompanied by a sudden increase in world coal prices. TKV has opened 4 packages of international bids to purchase imported coal for blending in the second quarter. However, due to rising world prices above the proposed price, plus tensions between Russia and Ukraine, supplies are becoming scarce, leading to the possibility of no winning bidder.

Another reason given by TKV is that in the process of implementing medium and long-term coal purchase contracts, several thermal power plants (inside and outside the EVN) often fail to obtain output in accordance with their commitments. That is, when the price of external sources is low, the weather is favorable, the power plant does not consume TKV coal, which causes high inventories. When prices are high or the weather is unfavorable (rainstorms, floods…) they will return to get coal from TKV in high volumes, especially in the current condition that world coal prices have reached a record, more than doubled. 2 times compared to the same period last year.

Therefore, in order to ensure sufficient and stable supply of coal for power generation, TKV asked the Ministry of Industry and Trade to advise thermal power plants to respect and strictly enforce coal acceptance with long-term contracts.

The thermal power plant needs to register an annual coal demand with a volume that does not exceed the average volume under a long-term contract and receive the correct volume so that the group can plan to invest in the project and take initiatives in the production of coal production to supply electricity.

According to the approved plan, by 2022 TKV will supply 43 million tons, of which 1.8 million tons of coal will be exported; coal sold domestically is 41.2 million tons (coal sold to power producers is 35 million tons). To obtain this output, raw coal produces around 39.1 million tons and imports nearly 4.76 million tons more.

Currently, coal imports in the first 3 months of the new year have reached almost 7% of the plan, TKV said it will succeed in increasing the output of raw coal which is exploited to the fullest. However, this group also warned that without coal imports or coal imports slowly, it would be difficult to supply 35 million tons of coal for power plants.

TKV also admits that it is difficult when coal mining costs increase. The reason is that the mine is deep down, some units of geological conditions fluctuate in complexity, in contrast to the original design document, the level of risk in the mining process increases, the daily transportation rate increases. and taxes.

Meanwhile, the selling price of coal for electricity has not increased in the last 2 years, so the profit from coal production is decreasing. A number of coal mining investment and development projects according to the master plan cannot keep pace with economic efficiency in their implementation.

In the current context, the world economy is recovering, boosting demand for raw materials and fuel in 2022 and the war between Russia and Ukraine having a major impact on the economy, causing the prices of oil, iron and steel , and coal to skyrocket. , and the supply is scarce … This makes it difficult to import coal, and reduces the company’s business efficiency.

According to TKV’s calculations, if the oil price was at 120 USD per barrel, TKV’s profit would drop to 1,264 billion dong, and coal production alone would lose 1,386 billion dong.

“If the selling price of coal (including coal sold to household electricity) is not increased, there is a risk of not meeting the profit plan, and possibly losing financial balance,” the group said.

Facing these difficulties, Vinacomin proposed to the Ministry of Industry and Trade to report to the Government for consideration and adjustment of the domestic coal selling price, particularly the price of power plants, in order to ensure production and business efficiency.

The group also argues that there needs to be an appropriate solution in regulating the national power system, properly regulating the mobilization of hydroelectric power plants, renewable energy power plants and coal-fired thermal power plants to supply volume. too fluctuating…

Mr Minho

Mr Minho

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