MOIT/GIZ Energy Support Programme

Together for a Better Energy Future

MOIT/GIZ Energy Support Programme

Together for a Better Energy Future

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Power Sector in Vietnam

1. Electricity development in Vietnam

1.1 Electricity consumption & demand

The overall power consumption in Vietnam is continuing to rise rapidly over the years, fueling the socio-economic development of the country. This growth is in line with the country’s industrialization and integration into the global economy after the 1986 market reforms.
Regarding the energy consumption per sector, industry (46.4%), transportation (29.8%) and residential areas (15.3%) are the three biggest energy consumers. Commercial and public services, as well as agriculture and forestry, only account for a subordinate share.


Figure 1: Development of Energy Consumption by Sector

 

Source: Institute of Energy
 

In the future, according to the National Power Development Master Plan VII, the electricity demand of the country will continue to grow by 14 - 16% per year in the period 2011-2015 and then slow down to 11.15% per year in the period 2016-2020 and 7.4 – 8.4% per year in 2021-2030.

1.2. Electricity generation

Over the past years, the annual electricity production increased by almost twentyfold, from 8.6 TWh in 1990 to 164.31 TWh in 2015 . The annual increase in this period was between 12 and 15%, which was almost as twice as the growth rate of the GDP. Hydropower, natural gas and coal are the most important primary energy sources for electricity production. In 2015, coal accounted for the largest share of electricity production (34.4%), followed by hydropower (30.4%) and gas (30%). Apart from large-scale hydropower, renewable energy - including small-scale hydropower - represented only a minor part of the electricity production (3.7%).


Figure 2: Electricity Production and Installed Capacity by Source (2015) Source: illustration based on EVN (2015A); and numbers provided by the IoE (2016)


In the revised National Development Plan VII (PDP 7 rev), which was approved by the Prime Minister on March 18th 2016, the average GDP growth rate is predicted to be at 7% during the period of 2016-2030. In order to satisfy the domestic electricity demand, PDP 7 rev sets a target for commercial electricity to reach 235-245 billion kWh in 2020; 352-379 billion kWh in 2025; and 506-559 billion kWh in 2030. The targets for electricity production and import are 265-278 billion kWh in 2020; 400-431 billion kWh in 2025; and 572-632 billion kWh in 2030.

According to PDP 7 rev, coal will be the most significant source of power for the period 2020-2030, taking up to 42.7% in 2020; 49.3% in 2025 and 42.6% in 2030. The structure of power source is illustrated in Figure 3.
 

Figure 3: Installed Capacity Targets, according to PDP 7 rev

 

2. Renewable energy

If hydropower is taken into account, the share of renewable energy in the total installed capacity reached over 40% in 2015. However, large-scale hydropower dominates this share, with the two biggest hydropower plants, Son La and Hoa Binh, representing 2,400 MW and 1,920 MW, respectively. The development of wind, solar and bioenergy remains at a very early stage, and the installed capacity of these sources added up to a total of 493 MW in 2015.


Table 1: Installed Renewable Energy Capacity, 2015

Source: Data provided by the Institute of Energy
 

The PDP 7 rev mentions the deployment of renewable energy (wind energy, solar energy, and bioenergy) as a priority for the future of the national electricity mix. Targets are set at 6.5% of the electricity production by 2020, 6.9% by 2025, and 10.7% by 2030.
 

Figure 4: Renewables targets for 2020, 2025 and 2030
Source: Revised National Power Development Plan VII
 

GIZ is working on an interactive map of all renewable energy projects in Vietnam (under development, registered, under construction, and in operation). Those projects can be compared to the provincial plans for RE development. The map is available below and will be regularly updated. For more information, read the blog post about it here.

  Figure 5: Map of renewable energy projects in Vietnam

DISCLAIMER: While the authors and publishers have attempted, to the maximum extent possible, to provide legally correct information, they cannot be held legally responsible for the full accuracy of the map content. This map is for information purposes only, and all the information it contains may be subject to change at any time.

3. Electricity market

Vietnam’s energy sector is dominated by big state-owned-enterprises (SOEs), and therefore mainly controlled by the government through the Ministry of Industry and Trade. The integrated state-owned utility Electricity of Viet Nam (EVN) holds a monopolistic position for transmission, distribution and system operation, and dominates the generation market. The remaining shares of the generation capacities are held by other big SOEs, including PetroVietnam (gas fired power plants) and Vinacomin (coal fired power plants). Foreign investors use mostly a “Build-Own-Transfer” (BOT) model, and other domestic investors use an independent power plant (IPP) model. Electricity generated by IPPs is sold to EVN under long term contracts.
Vietnam plans to develop a competition-based electricity market by 2023. In 2013, a Prime Minister decision confirmed the deregulation processes started in 2005. The market reform is set to proceed in three phases:

Phase 1
• Competitive power generation market (end of the year 2014)

Phase 2
• Pilot competitive power wholesale market (2015-2016)
• Fully competitive power wholesale market (2017-2021)

Phase 3
• Pilot competitive retail market (2021-2023)
• Fully competitive power retail market (after 2023)

4. National grid

Vietnam power system is being operated at high voltage of 500kV, 220kV and 110kV, and medium voltage of 35kV to 6kV. It is integrated by the 500kV transmission network, which is managed and operated by EVN’s National Transmission Power Corporation (NTC). The power transmission line of 500KV and 220kV are also managed by the NTC, while the line of 110kV, 35kV and 6kV are managed by regional power utilities.

To satisfy the country’s future electricity demand, Vietnam plans to expand its national grid. The objective is to develop additional transmission lines in coordination with the construction of new power plants, in order to achieve i) overall effectiveness of investment, ii) provincial power supply plans and rural electrification programmes, iii) improved reliability of supply and iv) more efficient use of energy sources.

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[1] Nguyen Khoa Dieu Ha (2010), IE (2015)
[2] World Bank (2015A)
[3] EVN (2015A), IoE (2016)
[4] EVN (2015B)
[5] EVN (2015A)
[6] Decision Nr. 63/2013/QD-TTg

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