US embassy cable - 05HANOI1239

UNCLAS SECTION 01 OF 02 HANOI 001239 
 
SIPDIS 
 
STATE FOR EAP/BCLTV and EB 
USDOC FOR 4430/MAC/ASIA/OPB/VLC/HPPHO 
 
E.O. 12958: N/A 
TAGS: ENRG, ECON, EIND, EINV, VM 
SUBJECT: VIETNAM'S ELECTRICITY SHORTAGES: THE ROLLING 
BLACKOUTS HAVE BEGUN 
 
REF: A) HANOI 857, B) HANOI 773 C) HCMC 329 
 
1. (SBU) SUMMARY: Vietnam is facing a serious electrical 
shortage in the North this summer and the nation's power 
producer, Electricity of Vietnam (EVN), has begun 
instituting rolling blackouts in Northern Vietnam.  With 
high summer temperatures and a prolonged drought that has 
nearly emptied many of Vietnam's reservoirs used for 
hydropower plants, EVN faces considerable pressure to keep 
the lights on in the next few months.  EVN is scrambling to 
upgrade the North-South transmission lines and procure 
additional power from its Northern neighbor, China.  The 
power shortage is so serious that EVN has recently 
publicized power conservation tips and informed consumers 
that rolling blackouts will be a continuing problem in the 
immediate future.  Hospitals, national defense institutions, 
Vietnamese government headquarters, television and radio 
stations and "vital production sectors" will have a 
continuous supply of electricity, but households and 
businesses without generators will be left in the dark 
temporarily until the situation improves.  In southern 
Vietnam, the situation is not nearly as dire; ConGen 
contacts report only a sporadic need for scheduled outages. 
End Summary.. 
 
2. (U) Due to Vietnam's rapid economic expansion and 
industrial efforts in recent years, the electricity 
consumption usage rate in Vietnam has grown substantially. 
In 2005, the usage is one and a half times higher than 2004. 
EVN estimates that electricity consumption in Northern 
Vietnam during the first half of this year will reach 68-70 
million Kwh per day.  The power industry in the south 
reports that Vietnam will need the equivalent to a new 715- 
megawatt power plant every year for the foreseeable future 
to keep up with growing demand (see reftel C). Along with 
the hot and humid weather, new building and home 
construction is driving up electricity demand in the North. 
Electricity supply has not been able to keep up with demand 
and as a result, EVN estimates that consumption will have to 
be reduced 6-7 million kWh per day or the equivalent of ten 
percent of the total electricity consumed daily in Northern 
Vietnam.  EVN is struggling to meet these cuts by asking the 
public to conserve energy and by instituting rolling 
blackouts throughout Northern Vietnam. 
 
NO RAIN ON THE HORIZON 
---------------------- 
 
3. (U) A prolonged drought has severely curtailed normal 
hydroelectric power generation in recent months (see reftel 
B).  Hydropower accounts for approximately thirty nine 
percent of the country's power generation.  With high 
temperatures in the mid to high 30s centigrade around 
Vietnam, water levels have decreased to dangerously low 
levels in many hydro-power reservoirs.  At the site of 
Vietnam's largest hydroelectric power plant, Hoa Binh, the 
water level is already below the dead water level.  If the 
Hoa Binh power plant ceases to operate, the country will 
face an unprecedented shortfall of approximately 1900 MW of 
power capacity.  Unfortunately, the heavy rains in recent 
days around Hanoi have done little to increase the reservoir 
water levels, including the Hoa Binh Reservoir. 
 
4. (U) In order to satiate the demand for electricity, EVN 
is running all thermal power generating plants at full 
capacity, increasing gas production to fuel power plants in 
Southern Vietnam, and negotiating to buy 400 Mw of power 
from China.  EVN is also scrambling to complete a 500 KV 
transmission wire linking the central city of Danang with 
the North and upgrading their transformer grids.  The south 
currently supplies four million kilowatt hours per day to 
Hanoi.  Although these actions will help in the short-term, 
what Vietnam desperately needs is additional power plants 
and rain.  Without rain in the near future to fill the water 
reservoirs, the current power outages in the North will 
likely last for a few more months. 
 
THE BLACKOUTS ARE HERE TO STAY FOR NOW 
-------------------------------------- 
 
5. (U) According to Phan Thi Thuy Tien, Deputy Director of 
International Cooperation at EVN, the current power problem 
in Northern Vietnam is "very serious."  EVN has even begun 
informing Hanoi consumers of the rolling blackouts in 
newspapers and has listed approximate times and locations of 
where the rolling blackouts will take place.  Only 
hospitals, national defense institutions, Vietnamese 
government headquarters, television and radio stations and 
"vital production sectors" will have a continuous supply of 
electricity.  Other business concerns and households, 
including all U.S. Embassy housing units, have been affected 
by rolling blackouts.  In fact, the sound of generators is 
heard more frequently around Hanoi these days, especially in 
the homes and businesses fortunate to own one.  The Ho Chi 
Minh City area experiences only sporadic power blackouts, 
due in large part to the fact that the majority of the 
region's power is generated by natural gas rather than 
water.  The Phu My power complex in Ba Ria-Vung Tau province 
pipes in natural gas from offshore and generates enough 
power to supply half the country. 
 
6. (SBU) COMMENT:  Even though EVN forecasted the 
electricity problem in the north many months ago, EVN has 
been slow to address the real issue of building new power 
plants and implementing contingency plans.  With no rain in 
the horizon and no alternate sources of electricity 
immediately apparent, the power situation in Northern 
Vietnam is expected to worsen in the coming months. 
 
BOARDMAN