Vietnam will need $320.6 billion investment capital for the development of its power network between now and 2045, according to a draft power development plan released by the Ministry of Industry and Trade (MoIT).
It is reported $128.3bn investment will be needed in 2021-2030, including $95.4bn fo4r generation and $32.9bn for the grid. In 2031-2045, Vietnam will need $192.3bn, including $140.2bn for generation and $52.1bn for the grid.
In February, the MoIT issued its draft on power master plan VIII, which is about national electricity development project planning for 2021-2030, but also looks ahead to 2045.
It forecasts the supply of commercial electricity to reach 491bn kWh by 2030 and 877bn kWh by 2045.
The total installed capacity of electricity sources in the country is expected to reach 137.2 gigawatts (GW) by 2030, which includes 27% from coal-fired thermal power, 21% from gas thermal power, 18% from hydroelectricity, 29% from wind power, solar and renewable energy and 4% from the imported sources and 1% from other types of energy from storage devices.
By 2045, the total installed capacity will reach nearly 276.7GW, and 44% of that is expected to come from renewable sources. 18% will be from coal-fired thermal power, 24% from gas thermal power, 9% from hydroelectricity, and 2% from the imported sources and 3% from other types of energy from storage devices.
John Yeap of Pinsent Masons, the law firm behind Out-Law, said: “The much awaited PDPVIII in many ways did not contain many surprises. The focus away from coal fired power generation with gas as the transition fuel is very much in line with expectations not just for Vietnam but many countries in the region that see reducing coal fired power generation and increasing renewable energy generation as only feasible within a growing national load profile through the use of gas in this way.”
“Vietnam’s approach of providing flexibility to project sponsors on the procurement of liquid natural gas, as opposed to the approach taken by its ASEAN neighbours where generally NOCs have built the required LNG import infrastructure, does however raise potential issues around procurement and cost efficiencies,” he said.
“The ambitious target of achieving 44% of renewable energy, with a discouragement of hydro-electric power generation, is also in line with expectations, reflecting Vietnam’s significant wind and solar resource. A long coastline coupled with shallow near shore waters provide Vietnam with the potential to be a major player in the offshore wind sector in the region. In this regard, whilst the offshore wind tariff may be attractive, contractual offtake arrangements that are able to attract the required capital investment will be an important structuring consideration,” he said.
The draft zoning plan also reveals that Vietnam will continue to import electricity from China, Laos and Cambodia in next 10 years.