Vietnam's ruling communist party decided Thursday that two planned plants in the southern region of Ninh Thuan will not feature in the country's future energy mix, state-controlled media reported.

MP Duong Quang Thanh, chairman of the Electricity Committee in the National Assembly, confirmed that no budget for the plants - which were approved in 2008 with a combined capacity of 4,000 megawatts (MW) - had been included in a long-term energy plan approved by Prime Minister Nguyen Xuan Phuc, the DTI news website reported.

Le Hong Tinh, vice chairman of the National Assembly's Science, Technology and Environment Committee, said a key reason for the government's decision was that the price for the plants had doubled to $18 billion (about 16.5 billion euros).

The National Assembly is expected to ratify the decision later this month, state-controlled Tuoi Tre newspaper reported.

Ambitious plans

In June 2010, Vietnam announced plans to build 14 nuclear reactors at eight sites across five provinces by 2030. They were expected to produce 15 gigawatts (GW) of power, or about 11 percent of the nation's energy mix totaling 112 GW. Four more units were added to the first two sites in Ninh Thuan, then six more at six sites.

Westinghouse (Japan/US), GE (US), EDF (France), KEPCO (South Korea) and CGNPC (China) all also expressed interest in constructing future nuclear power projects, as part of an ambitious strategy to increase the nuclear share to 20-25 percent by 2050.

Power production is currently dominated by hydropower with a share of 41 percent in electricity generation, followed by natural gas with 31 percent and coal with 26 percent.

Russian and Japanese firms out in the cold

Construction of the first plant - Ninh Thuan 1 - had been set to start in 2014 with know-how from Russia's state-run nuclear firm Rosatom, but the government pushed construction back to 2020 due to post-Fukashima safety concerns.

The 4 X 1,000 Megawatt (MW) plant was to have been built by Atomstroyexport, a subsidiary of Rosatom.

Russia's Ministry of Finance agreed to finance at least 85 percent of the plant and in November 2011 an agreement for an $8 billion loan was signed with the Russian government's state export credit bureau.

A contract to build the second plant was given to companies from Japan. In October 2010, an intergovernmental agreement with Japan was signed for construction of a second nuclear power plant - Ninh Thuan 2 - at Vinh Hai also in Ninh Thuan Province, with its two reactors to come on line in 2024-25. The Japanese consortium - International Nuclear Energy Development of Japan (JINED) would have constructed the 4 X 1,000 MW site.

The Japanese Ministry of Economy, Trade and Industry (METI), agreed to finance up to 85 percent of the total cost.

Demand insufficient

When the plants were approved in 2009 the government projected power demand growth of 17-20 percent per year, but that has had to be revised to 11 percent for 2016-2020 and 7-8 percent in 2021-2030.

In 2015, Vietnam's Central Statistics Office estimated that electricity demand would continue to grow at an annual rate of 10-12 percent, rising from 169.8 terawatthours (TWh) in 2015 to 615.2 TWh by 2030. In its 2013 Country Nuclear Power Profile, submitted to the International Atomic Energy Agency (IAEA), Vietnam forecast a 2015 generation capacity of a about 40 gigawatts, increasing to nearly 140 GW to meet projected demand in 2030.

Duong Quang Thanh, CEO of state-run Electricity of Vietnam Group - which was to cover the remaining costs of the plants - said they were "not economically viable because of other cheaper sources of power." It also cited "slowing demand for electricity and the declining price of other sources of energy" as reasons behind the decision.

"Nuclear power, therefore, cannot compete economically with other sources of energy," Thanh said.

Deutsche Welle - November 10, 2016

Vietnam to scrap $17.8bn nuclear project

A committee under Vietnam’s lawmaking National Assembly on Thursday approved a government proposal to pull the plug on a megaproject to build two nuclear power plants in a south-central province.

The Vietnamese government’s decision to scrap the Ninh Thuan nuclear power project, consisting of two planned plants, Ninh Thuan 1 and 2, in the namesake province, came in the wake of rising costs and concerns that the ambitious plan has “lost its feasibility.”

The proposal to terminate the project was submitted to the National Assembly for approval on Thursday, with the legislature’s Committee on Technology, Science and Environment eventually giving the government a go-ahead.

“Scrapping the project is a brave decision from the government,” deputy head of the committee Le Hong Tinh told Tuoi Tre (Youth) newspaper on the sidelines of yesterday’s meeting.

Under the government’s ambitious plan, the Ninh Thuan 1 and 2 facilities, once put into operation, would have been Vietnam’s first nuclear power plants.

The two plants are among five nuclear power facilities slated for construction in Vietnam’s central region between 2020 and 2030 under a plan approved by the government in response to forecasts that the country will face a serious power shortage by 2020.

“The estimated investment for the project has doubled,” Tinh said, citing rising costs as the biggest reason behind the decision to scrap the plan.

“The project was initially estimated to cost VND200 trillion US$8.93 billion, but the cost rose to VND400 trillion $17.86 billion and may have kept rising,” he elaborated.

Tinh attributed the rising cost to the fact that Vietnamese officials demanded more modern and advanced technology to be used at the planned plants, in the wake of the 2011 Fukushima nuclear disaster in Japan.

“With the doubling cost, the project is no longer profitable and the investment is ineffective,” Tinh said.

“Even when the two plants eventually came into commission the electricity they produced would also have been twice as expensive as planned.”

Tinh added that the Ninh Thuan nuclear power project was developed at a time when Vietnam’s economy expanded at an annual pace of 7 to 8 percent.

“As GDP grows, so does the demand for electricity. The nuclear power project was planned to embrace the rising power demand,” Tinh said.

“But reality shows that GDP growth actually only 6 to 7 percent.”

With the government’s proposal already backed by the legislature’s science committee, lawmakers are scheduled to reconvene on November 22 to release a resolution that will officially put an end to the project.

The Ninh Thuan nuclear project had been under construction for seven years before government authorities gave up on it.

In 2009 the megaproject was green-lit by the National Assembly, with the estimated cost of VND200 trillion. At that time, Russian partners pledged to lend Vietnam $10.5 billion to fund the project, while Japan also pledged ODA loans.

In 2010 the Vietnamese government selected Russia as the technology partner of the Ninh Thuan 1 plant, and chose Japan for the second plant the following year.

The project was initially planned for groundbreaking in 2015 and commissioned in 2020, but the timeline was extended in 2014 before the government decided to completely cease implementation of the project.

Tinh added it is still better to cease the project than to continue putting more money into the facility or importing machinery and equipment only to have them collect dust.

“Looking to other places in the world, such countries as South Africa and Germany have had to scrap nuclear power plant projects, even after everything had been completed.

Tuoi Tre News - November 11, 2016