The Van Phong 1 coal-fired power plant is expected to commence operations in 2023.
The 1.32GW power plant is being developed on a build-operate-transfer (BOT) basis by Sumitomo Corporation. Image courtesy of vanphong.khanhhoa.gov.vn.
The Van Phong 1 thermal power station is estimated to use 3.4 million tonnes (Mt) of coal a year.

Van Phong 1 is a 1,320MW  super-critical coal-fired power plant under construction in the Khanh Hoa province of Vietnam.

The £2.2bn ($2.6bn) project is being developed on a build-operate-transfer (BOT) basis by Van Phong Power Company, a wholly-owned subsidiary of Japan-based Sumitomo Corporation.

Vietnam’s Ministry of Industry and Trade and Sumitomo Corporation signed an investment agreement for the 1.32GW project in May 2017 while the investment registration certificate for the same was granted in July 2017.

The Van Phong 1 power project is backed by a 25-year power purchase agreement with state-owned utility Vietnam Electricity (EVN).

The engineering, procurement, and construction (EPC) contract for the project was awarded in August 2019 and the construction works were started in the same month.

Scheduled to commence operations in 2023, the Van Phong 1 thermal power plant is expected to boost Vietnam’s total power generation capacity by 3%. 

Location and site details

The coal-fired power station is being developed on a 514ha-site within the Van Phong Special Administrative-Economic Zone (SAEZ), in the Khanh Hoa province in southern Vietnam.

The land clearance for the plant site was obtained in May 2019. 

Van Phong 1 power plant make-up  

The thermal power station will consist of two super-critical coal-fired units of 660MW capacity each. Each unit will be equipped with a once-through pulverised coal-fired boiler and a steam turbine from Toshiba.

Both the units will be fitted with electrostatic precipitators (ESP), flue gas desulphurisation ( (FGD) and low NOX burners to control emissions.

The other components of the project include a coal handling plant, an ash pond area, and a switchyard. 

Coal supply 

The Van Phong 1 thermal power station is estimated to require 3.4 million tonnes (Mt) of coal a year which will be sourced from Australia and Indonesia. The coal shipments for the project are expected to be started from 2023 onwards. 

Power evacuation and off-take  

The power generated by the Van Phong 1 power plant will be evacuated into the national grid 500kV transmission lines from the onsite switchyard.

The electricity output of the plant will be sold to Vietnam’s state-owned owned utility Vietnam Electricity (EVN) under a 25-year power purchase agreement (PPA) signed in 2018. 

Van Phong 1 project financing 

The Van Phong Power Company secured £1.52bn ($1.99bn) in financing for the project from a group of banks led by the Japan Bank of International Cooperation (JBIC) in April 2019.

JBIC provides approximately £917m ($1.2bn) of loan for the project, while seven co-financing institutions including Sumitomo Mitsui Banking Corporation, MUFG Bank, Mizohu Bank, Sumitomo Mitsui Trust Bank, Overseas Chinese Banking Corporation (OCBC), DBS Bank and Bank of China (BOC) are providing the remaining amount.

The co-financing amount will be covered by insurance from Nippon Export and Investment Insurance (NEXI). 

Contractors involved

A consortium of four companies including Toshiba Energy Systems & Solutions Corporations (Toshiba ESS),  IHI Corporation, CTCI Corporation, and Doosan Heavy Industries & Construction was awarded the engineering, procurement and construction (EPC) contract for the  1.32GW Van Phong 1 thermal power project in August 2019.

Toshiba ESS’s scope includes the design, manufacturing, installation, and test operation of the steam turbines and generators.

Japan-based Nippon Yusen Kaisha (NYK) was awarded a 25-year contract for the transport of coal for the Van Phong 1 thermal power plant in September 2019. 

Pöyry was engaged to provide owner’s engineer services to Sumitomo Corporation for the power project in August 2013.

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