In recent months, the hot dispute on both domestic newspapers and foreign news is the severe power shortage in Vietnam. The frequent and widespread cutting-off power over the past several months have adversely affected to daily activities of community and create many difficulties in manufacturing, particularly in foreign investments.

The government officials, as observed, said, Vietnam this year is facing with the most prolonged and abnormal drought in the past decades. Water shortage occurs in most of the lakes use to operate hydroelectricity. At Hoa Binh, the water level is reaching the dead line which is unable to maintain hydroelectricity generation at normal operation. The Hoa Binh hydroelectricity was constructed in more than fifteen years with designed capacity 1,920 MW. Operated by 1994, it supplies forty percent of the Northern electricity consumption and approximately fifteen percent power output of the entire country. In the first five months of 2010, in total, Vietnam shortages two billions kWh of electricity while the Son La hydroelectricity is still under construction and it only starts in the year 2012. The national electricity industry grows thirteen percent per year which outperforms economic growth, though, the shortage still happens because the country heavily dependents on hydroelectricity exposes the risk of lack of water in dry season.

The power shortage seriously threads manufacturing and businesses, especially for export sector. Many manufacturers have to figure out their own solutions to overcome the difficulties by equipping their plants with electricity generator. The fuel cost to generate power adds extra thousand dollars to unexpected raising manufacturing cost which, in turn, impact companies’ operation. Unit price of power generated from independent electricity generator is six times higher than selling price of Electricity of Vietnam (EVN).

Many scholars and experts from Oxford University and honored Universities and Institutes assert that the heavy red tape and slow transforming of corporations managed by government into a competitive market operation bears the huge cost on economy and the suffering of electricity industry is an obvious. Setting retail price is another aspect causes new investments less beneficial. An appropriate selling price will bring more attractive and potential to investors.

Yearly, electricity output grows 13%-15%, though, the increase of consumption maintains at a high level, 10%-15% on average from 2010 to 2030. Particularly, in 2010, the power consumption is estimated with an increase of 18% in line with the push in economic activities to achieve GDP growth of 6.5% in compare with that of last year 5.3%.

The European Chamber of Commerce in Vietnam (EuroCharm) has warned the severe power shortage in Vietnam. It forecasts that with the current growth of power consumption, Vietnam urges $USD 70-80 billion in infrastructure investment in the next five to ten years.