Korea Electric Power Corporation (Kepco) has decided to proceed with an investment in the Vung Ang 2 coal power project in Vietnam. The company will invest US$189 million to acquire a 40% stake in the project, according to local media reports. Hong Kong-based China Light & Power is selling the stake following its decision not to participate in new coal-fired projects.
Diamond Generating Asia, a subsidiary of Mitsubishi Corporation, is the main sponsor of the US$2.2 billion project.
The plant, comprising two 600 megawatt turbines, is located in Ha Tinh Province, Vietnam, adjacent to Vung Ang 1 which is already in operation. Samsung C&T and Doosan Heavy Industries have the engineering, procurement and construction (EPC) contract. The first unit is expected to be commissioned in 2024, and the second in 2025. Both will be fueled by imported hard coal (anthracite).
Kepco's announcement comes at a time when the company and other utilities have been under growing pressure from environmental groups to exit coal, against the background of South Korean President Moon Jae-in launching his Green New Deal.
In December 2019, Hong Kong-listed CLP announced its latest decarbonization actions under its updated Climate Vision 2050, pledging not to invest in any additional coal-fired generation capacity, and to progressively phase out all remaining coal assets by 2050.
Also in December, Standard Chartered said it would not be supporting new coal power projects, including three projects that it had agreed to fund before the decision was taken. These included Vung Ang 2. Singaporean bank OCBC said in November 2019 that it would not be backing any more new coal fired power plants, a decision which impacted its involvement in Vung Ang 2.
Last November a letter signed by 30 organizations from around the world was presented to Japan Bank for International Cooperation (JBIC), calling for it not to support the Vung Ang 2 project.
In July 2020 Kepco announced that would be taking a 15% stake in the company building two 1000MW ultra super critical coal fired power plants in Banten Province, Indonesia. PT Indo Raya Tenaga is the project developer, whose original partners were PT Barito Pacific Tbk (49%) and Indonesia Power (51%), with Doosan Heavy Industries & Construction Company as EPC contractor.
Java 9 is expected to be commissioned in the fourth quarter of 2023, while Java 10 is scheduled to begin operations in the first quarter of 2024.