Vietnam has set ambitious targets to more than double its power generation capacity by 2030, with a projected installed capacity of 158 GW, according to a government document seen by Reuters. This would be a significant increase from the current 69 GW as of 2020. However, the country has slightly lowered its offshore wind target to 6 GW, down from 7 GW in the previous draft. The document also revealed that Vietnam would continue to rely heavily on coal until the end of the decade, with a combined capacity of coal-fired power plants set to increase to 30.1 GW by 2030, up from 21.4 GW in 2020.
Despite the country's continued dependence on coal, the government has reaffirmed its commitment to becoming carbon neutral by 2050, in line with previous commitments. Vietnam's power plan also includes phasing out all coal-fired power plants by 2050. The document stated that hydropower would be the second main source of energy, followed by liquefied natural gas (LNG) and onshore wind.
Vietnam's power plan has been delayed for years due to internal disagreements and complex reforms. However, the approval of the plan is important to unlock the $15.5 billion of green-transition funds pledged to Vietnam in December 2021 by the Group of 7 nations and other wealthier countries.
The government's plan is also aimed at supporting an average annual economic growth of 7% this decade. The plan's targets are still subject to changes until they are approved under the new power plan.
According to two people familiar with the discussions, the document recapped a new version of the power plan prepared last week by the industry ministry, which still needs government approval. The ministry has not yet commented on the matter.
In light of Vietnam's power plan, industry experts and investors have shared their views on the country's energy landscape. Bui Van Thinh, chairman of renewables developer Thuan Binh Wind Power JSC, commented, “Vietnam has huge potential for wind power development, and the new plan's target of 6 GW by 2030 is modest compared to the country's potential.” He also added that the country needed to incentivize foreign investment in offshore wind projects to meet its targets.
Meanwhile, Kevin Snowball, CEO of PXP Energy Corp, said, “It's clear that coal will be the dominant power source in Vietnam until 2030. The government needs to take a strategic approach to balancing energy security with decarbonization efforts.”
In conclusion, Vietnam's power plan aims to significantly increase its power generation capacity by 2030, but it also highlights the country's continued reliance on coal until the end of the decade. However, the government has reaffirmed its commitment to becoming carbon neutral by 2050 and phasing out all coal-fired power plants by the same year. The plan's approval is crucial to unlocking the green-transition funds pledged to Vietnam and supporting the country's economic growth.
