Vietnam Need More Coal-fired Power to Meet Growing Power Demand, Experts Doubt

Diep Nguyen

18:05 04/06/2019

BizLIVE -

Analysts forecast that coal-fired power generation will be needed to satisfy the country’s demand for electricity, as Vietnam’s growing economy challenges the national power grid to keep up.

Vietnam Need More Coal-fired Power to Meet Growing Power Demand, Experts Doubt
Darrell Proctor is a power associate editor of PowerMag. Recently, in an article released in Powermag written by Darrell Proctor, the first solar power plant licensed to operate in Vietnam came online in late April, another signal of the country’s increasing reliance on renewable energy. But analysts forecast that coal-fired power generation will be needed to satisfy the country’s demand for electricity, as Vietnam’s growing economy challenges the national power grid to keep up.
Construction of the Mo Duc Solar Power Plant, with generation capacity of 19.2 MW, was idled for more than three years after lead investor Thien Tan Group had trouble acquiring the land needed for the $38.7 million project. The group also was forced to wait on government approval of solar power prices. It took just three months to finish the project earlier this year after the necessary approvals.
Vietnam’s economy is growing, and government officials have said they expect demand for electricity will grow about 8% year-over-year across the next 10 years. Government data shows Vietnam receives most of its electricity from hydropower—more than 37%—and coal-fired power, which accounts for more than 34%.
Analysts agree that Vietnam will need more coal-fired power to meet its growing power demand. A March 2019 report from Fitch Solutions, a business intelligence company that studies business markets including energy, said coal generation growth is expected “to increase rapidly over the next decade and to dominate Vietnam’s power sector expansion. We forecast coal-powered generation to grow at an average of 10.1% [year-over-year] to reach about 50.5% of the power mix by 2028.” 
The Fitch report said coal will grow “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.” Fitch said “we believe that coal will remain the more attractive option over the next decade as it is cheaper and more reliable at present.”
The Asian Infrastructure Investment Bank, based in Beijing, in late April reiterated its move toward renewable energy, with Joachim von Amsberg, the bank’s vice president, telling National Public Radio, “In most countries today, it doesn’t really make financial economic sense anymore to invest in coal-fired power plants.”
A February report from the Institute for Energy Economics and Financial Analysis, a Cleveland, Ohio-based group, notes that as many as 100 large global lenders have backed off their investment in coal mines and coal-fired power plants over the past five years. 
An October 2019 study from Carbon Tracker, a London, UK-based think tank, said with costs for renewable power continuing to fall, Vietnam’s new solar plants may be cheaper to operate than the country’s coal plants by 2027.

DIEP NGUYEN

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