Foreign investors have recently shown their concerns about the country’s risk of power shortage next time, but experts said the government will increase the electricity supply, especially from coal-fired power, to meet the country’s rapidly rising power demands.

Vietnam would increase coal-fired power sharply over the next decade

According to Takimoto Koji, chief representative of the Japan External Trade Organization (JETRO) in Ho Chi Minh City, Japanese investors are concerned as JETRO has been recently announced that Vietnam could face a power shortage by 2022.

However, the investors can feel relieved as experts believed Vietnam would increase coal-fired power sharply over the next decade to meet the local demand.

Daine Loh, power and renewables analyst of Fitch Group’s Fitch Solutions Macro Research, forecast coal power generation will reach 50.5 percent of the total consumption power mix by 2028, with gas at 22.5 percent, hydropower at 22.8 percent and non-hydro renewables at 3.8 percent.

He explained this is due to relatively slow supply growth from traditional sources of energy such as hydropower and natural gas, with the government set to turn to coal to meet the surge in demand for power.

According to Daine, traditionally, Vietnam has relied on hydropower and natural gas for its power generation, but there are several obstacles to see continued growth in these two sectors.

Firstly, hydropower potential has already been almost fully exploited at present. Furthermore, recent droughts and decreasing water supplies highlight the threats facing Vietnam’s hydropower generation output reliability.

Secondly, domestic gas reserves are depleting and will not sustain a substantial ramp-up in gas power generation over the longer term, Daine said.

“As a result, we expect the government to turn largely to coal power to meet Vietnam’s increasing power demand, which stems in particular from an expanding industry and manufacturing sector, in order to support continued economic growth. Rapid urbanization and government efforts to up electrification levels to 100 percent will further boost electricity consumption growth rates.”

Sharing the view, power analyst Nguyen Canh Nam from the Vietnam Energy Association, said coal-fired power would still play a key role in the country’s electricity industry in the coming years.

Considering the country’s domestic coal resources, the ability to import coal and the level of greenhouse gas emissions, it is necessary to develop coal-fired power because of its technical and economic feasibility, Nam said, explaining while renewable energy from solar and wind is more costly, it can’t ensure consistent power supply.

Application of modern tech

According to Nam, the ratio of Vietnam’s coal-fired power is 39.1 percent, the same as the global average. The rate is much higher in many other countries, such as 63 percent in China, 61 percent in Australia, 46 percent in South Korea, 78 percent in Poland and 87 percent in South Africa.

Besides, he said, coal-fired power output per capita in Vietnam is also 793 kWh, much lower than the world’s average level of 1,290 kWh.

However, Nam said the development of coal-fired power must be cleaner to increase efficiency and reduce emissions through the use of more modern technologies.

Besides coal-fired power, Nam also noted the need to accelerate the development of electricity from other resources, especially renewable ones.

For more sustained development, it is very important to change the country’s economic structure with an aim to reduce the share of power-intensive industries, he stressed.

“In doing so, the demand for electricity decreases, which will reduce the pressure on the electricity supply. At that time, we can make long-term investments for clean and renewable energy,” Nam said.

Hanoitimes