Decision No. 110/2007/QD-TTg Approving the National Power Development Plan for the period 2006-2015 with a view to 2025

DECISION OF THE PRIME MINISTER

Approving the National Power Development Plan

for the period 2006 - 2015 with consideration to 2025

PRIME MINISTER

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Electricity Law dated December 14, 2004;

Considering the Report No. 5523/TTr-BCN dated October 3, 2006 and Circulars No. 2080/BCN-NLDK dated May 11, 2007, No. 2944/BCN-NLDK dated June 27, 2007 of the Ministry of Industry; opinions of relevant ministries and sectors on the National Power Development Plan for the period 2006 - 2015 with consideration to 2025,

DECISION:

Article 1. Approves the National Power Development Plan for the period 2006 - 2015 with consideration to 2025 (referred to as the Sixth Power Plan) with the following main contents:

1. Objectives:

- On load forecasting:

Meeting the demand for economic and social development nationwide at an average GDP growth rate of about 8.5% - 9% per year during the period 2006 - 2010 and higher thereafter, with the forecasted electricity demand increasing at a rate of 17% per year (base scenario) and 20% per year (high scenario) during the period 2006 - 2015, while determining the high scenario as the operational scenario and preparing for a 22% per year growth scenario in case of unexpected rapid growth.

- On power source development:

+ Developing power sources must meet the aforementioned load requirements. Ensuring the construction schedule of hydropower plants that provide comprehensive benefits such as flood control, water supply, and electricity production; reasonably developing efficient thermal power plants using gas; intensifying the construction of coal-fired thermal power plants; developing small hydropower plants, new energy, and renewable energy for remote, mountainous, border, and island areas; actively exchanging electricity effectively with neighboring countries; ensuring national energy security and sustainable development. Completing the preparatory phase for the nuclear power plant project and submitting it to the Prime Minister for approval.

+ Developing appropriate power centers in various regions across the country to ensure reliable local power supply and reduce technical losses in the national power system, as well as ensuring the economic viability of projects, contributing to the economic and social development of each region and the entire country.

+ New power source development must be calculated with deep investment options and technological upgrades for operating power plants; meeting environmental standards; applying modern technology for new power plants.

+ Developing power sources according to forms already stipulated by the state, with the Ministry of Industry determining reasonable ratios for projects applying Build-Operate-Transfer (BOT) and Build-Own-Operate (BOO) investment forms.

+ Power source projects listed in Appendix IA - base scenario and Appendix IB - high scenario attached to this Decision.

- On power grid development:

+ Developing transmission and distribution grids in a synchronized manner with the power source development program. Implementing modernization and gradually undergrounding urban and town power grids to minimize negative impacts on landscapes and the environment. Applying measures to reduce electrical energy losses as prescribed.

+ Power grid projects listed in Appendix II attached to this Decision.

2. On rural, mountainous, and island power:

a) Continuing to implement investment programs for rural power development approved by the Prime Minister, striving to achieve 95% electrification in communes by 2010 and 100% by 2015;

b) The Ministry of Industry shall take the lead and coordinate with relevant sectors and localities to establish mechanisms, policies, and guiding documents for implementation.

3. On investment capital:

Encouraging domestic economic components and foreign investors to participate in constructing power source and distribution grid projects according to investment forms prescribed by state laws.

4. On financial mechanisms:

a) Domestic investors with sufficient capacity may mobilize all available capital to invest in power source and grid projects under a self-funding and self-repayment mechanism;

b) Continuing to implement Decision No. 276/2006/QĐ-TTg dated December 4, 2006 of the Prime Minister on electricity sales prices;

c) Calculating electricity purchase and sale prices in a market-oriented direction and encouraging both domestic and foreign investors to participate in power source projects.

5. On organizational management reform and improving power sector efficiency:

a) The State shall hold 100% of the charter capital for enterprises operating in the national power transmission system, large-scale power generation with significant economic and social importance, defense, and security;

b) The State shall hold more than 50% of the total shares for enterprises playing a major role in balancing the economy, stabilizing the market in the power generation sector;

c) The process of equitization of units under the Vietnam Electricity Corporation Group shall be carried out strictly and appropriately phased.

Article 2. Tasks of ministries, sectors, localities, and related units:

1. Ministry of Industry:

a) Directing, inspecting, and urging investors and related units to implement this plan effectively and on schedule;

b) Continuously monitoring and evaluating the supply-demand situation for electricity, the implementation of power source and grid projects to adjust and timely propose supplements to the project list, investors, and schedules to align with the actual development of the power industry;

c) Approving location planning and detailed planning for coal-fired power centers and hydropower planning to attract domestic and foreign investors. Directing the development of natural gas resources for power generation, industry, and household use;

d) Leading and coordinating with relevant ministries and sectors to develop financial mechanisms to encourage investment in new energy and renewable energy projects;

đ) Leading and coordinating with relevant ministries and sectors to implement negotiations and agreements on cooperation and electricity exchange with neighboring countries and Vietnam's participation in the regional power interconnection system of the Mekong Subregion;

e) Directing and urging localities and investors to implement rural energy projects according to plans and specified schedules;

g) Directing research and pilot manufacturing of synchronous equipment for coal-fired power plants and hydropower plants.

2. Ministry of Planning and Investment: establishing mechanisms and policies to attract investment and utilize Official Development Assistance (ODA) funds reasonably to create conditions for the power industry to develop in a coordinated, balanced, rational, and sustainable manner.

3. Ministry of Finance: to take the lead and coordinate with relevant ministries and sectors to develop mechanisms for raising investment capital for the power industry development in accordance with Power Development Plan VI to meet the timely and adequate electricity demand of the whole society.

4. State Bank of Vietnam: to take the lead and coordinate with relevant ministries and sectors to develop appropriate policies and mechanisms to promote the implementation of power projects to ensure sustainable power industry development requirements.

5. Vietnam Electricity Corporation:

a) To play a key role in ensuring stable and safe power supply for economic and social development. To implement investment in synchronous power grid projects to enhance investment efficiency; to invest in power generation projects according to assigned tasks;

b) To focus on researching and calculating locations and detailed planning of coal-fired power centers for the Ministry of Industry to consider and approve;

c) To take the lead in building infrastructure projects of coal-fired power centers that Vietnam Electricity Corporation invests partially or entirely in power generation projects;

d) To coordinate with consulting units of the Ministry of Transport:

- To prepare reports on investment in upgrading the Quan Chanh Bo channel to be consistent with the coal transportation schedule serving coal-fired power plants in the area.

- To study and prepare reports on investment options for selecting locations for imported coal transshipment, report

d) To implement measures to continue reducing power loss, to carry out energy-saving programs in production and consumption to achieve sustainable development.

6. Other localities, organizations, and individuals:

a) Localities to take the lead and coordinate with project investors to implement land clearance, compensation, relocation, and resettlement for power generation and transmission projects according to regulations.

b) Units, organizations, and individuals participating in the power sector have the responsibility and obligation to implement Decision No. 79/2006/QD-TTg dated April 14, 2006, of the Prime Minister approving the National Target Program on Energy Efficiency and Rational Use; Directive No. 19/2005/CT-TTg dated June 2, 2005, of the Prime Minister on implementing energy savings in electricity use.

Article 3. Power generation projects and interconnection lines with the national power system from 2006 to 2015 invested by domestic enterprises shall be implemented in accordance with Decision No. 1195/QD-TTg dated November 9, 2005, of the Prime Minister.

BOT and BOO projects with foreign investors shall be widely tendered. In cases where it is necessary to designate a contractor, the Ministry of Industry shall coordinate with the Ministry of Planning and Investment to review and submit for approval.

Article 4. The Ministry of Industry shall draft the Decision to establish the National Steering Committee for Power Development Plan VI based on the Prime Minister's directives, and submit it to the Prime Minister for approval.

Article 5. This Decision shall take effect fifteen days after its publication in the Official Gazette.

Article 6. The Minister of Industry, heads of relevant ministries and sectors, Chairpersons of provincial People's Committees under the central government, Board of Directors, Chairpersons of Board of Directors, General Directors of Vietnam Electricity Corporation, and related units and individuals are responsible for implementing this Decision./.