Vietnam is advancing with plans to reduce the coal-fired power station development in the country’s electricity sector’s next phase of growth. The change was a part of the long term strategy to heighten and promote cleaner sources of energy and boost overall investments in the power sector. The deputy minister for industry and trade Hoang Quoc Vuong revealed plans for the next decade beginning next year, commonly known as Power Development Plan-VIII (PDP-VIII), which provides sufficient power supply for social-economic development. The steps are in line with the February’s approved resolution by the ruling communist party, citing that they are dedicated to an energy development strategy until 2030.
The renewable energy growth and curbing the development of coal-based power will be the foundation of policies that will come into effect by next year, without giving detailed steps to downsizing the coal-based growth. Coal had been having a special place in recent years Vietnam’s energy mix, and the country’s coal imports has been record an all-time high in recent months as buyers snatching cargoes at a record-low prices. The trend has also been boosted by new coal-based power plants being opened and increased consumption.
Coal import also showed an uptrend as it rose from 20.6million tonnes in H1 2019 to 31.2million tonnes, as shown in custom data, but not differentiation between thermal and coking coal. As steady rise in imports helped absorb oversupply in the seaborne market after China and India reduced their purchases during the pandemic has hurt demand. The country also acknowledged pandemic-induced economic pressure that has changed the outlook of power demands. The forecast with 5-10 years and beyond still faces an uncertainty.
While it is still unclear how many coal-based power plants plans could be trimmed by the government, especially when in the early stage of planning. The decision also the result of combined environmental issues and the difficulties in financing also public opposition. With renewable and cleaner energy sources gaining popularity in recent years, coal prices are falling, reducing costs and stronger investor interest.
Vietnam commissioned 1.2GW of new capacity last year, bringing its total to 19.2GW. Another 2.1GW is scheduled to come into production this year and further 3.7GW is under construction and planned to set commissioning in 2021. Around 3.2GW is under construction and scheduled for launch in 2022, while another 870MW is planned with no launch schedule.
