Vietnam calls for up to US$14bn annual power investment

Out-Law News | 19 Aug 2022 | 3:25 am | 1 min. read

Vietnam will need between US$8 billion to US$14bn each year till 2030 to bring its power network up to date, including developing new power plants and expanding its grid, a minister has said.

Of the hoped-for investment, 75% would be spent on new power plants with priority given to renewable sources and the rest on grid expansion. Vietnam plans to seek private investment for these projects, according to a news report.

The country has pledged to stop building new coal-fired power plants from 2030 as part of its plan to reach climate change commitments pledged at last year’s COP26 international conference. It is also planning to reduce its coal-fired power plant generation capacity to 13.2% of the country's total power capacity by 2045 from the current 32%, according to Vietnam’s industry and trade deputy minister Dang Hoang An.

Infrastructure expert John Yeap of Pinsent Masons said: “Vietnam, like its neighbours in southeast Asia, will have a challenging couple of decades ahead, having to balance a growing demand for power with its commitments to net zero. Stopping coal plants from 2030 means other sources of power generation will need to fill the gap and given coal plants largely have a baseload role in the system, this gap will need to be filled by generation sources that can play that role.”

“Whilst gas to power is likely to be the short-term solution, for the longer term we may see policy moves towards increasing large offshore wind together with storage, as well as possibly nuclear. These sources of power are however expensive, which suggests a robust regulatory policy will have to be put in place in order to enable the commercialisation of such projects,” he said.

In May, Vietnam’s government published plans to double its installed power generation capacity to 146 gigawatts (GW) by 2030.