Vietnam needs a better mix and greater efficiency of energy sources to meet future demand

November 4, 2015


Danang, 4 November, 2015 – Greater energy efficiency, expansion in renewables, and increased power trading in Asia could help Vietnam meet an expected 7-10 percent increase a year in power demand through 2030, participants at a conference said on Wednesday, as a report was released showing that low-carbon development may help boost economic growth in the long run.

As power demand grows, Vietnam needs to boost energy efficiency and tap into various energy sources, including coal, natural gas, wind, solar and hydropower, to ensure sustainable, reliable and affordable power supply. The country can also consider stronger participation in regional power trade.

These issues were discussed at a conference with the theme, Shaping Vietnam’s Sustainable Power Sector Development, in Da Nang City today. Participants included Deputy Prime Minister Hoang Trung Hai, Vice Minister of Industry and Trade Hoang Quoc Vuong, World Bank Vice President for East Asia and Pacific Axel van Trotsenburg, and World Bank Senior Director for Energy & Extractives Anita Marangoly George.

“Vietnam has set a priority of developing the power sector to meet the demand of socio-economic development, to ensure the national security and power security, as well as to meet the demand of public consumption,” said Deputy Prime Minister Hoang Trung Hai. “Thanks to that vision and the power sector’s efforts, Vietnam’s national power grid has remarkably improved. It now can meet the socio-economic development demand with higher quality and greater reliability in power distribution.”

Since 1990, the proportion of the population with access to electricity has jumped to 98 percent from 54 percent.  Over the two decades, 10 million households, with 40 million people, have gained access to electricity, mainly through rural electrification under the national poverty reduction program. Few countries have achieved so much in so little time, despite challenging topography.

“Vietnam has done well in providing access to electricity, with almost 100 percent of its population connected. Access to power has also been accompanied by improvements in operational efficiency and service quality.” said Axel van Trotsenburg, the World Bank Vice President for East Asia Pacific. “The key question today is how to meet future demand, while also complying with the government’s commitments to reducing GHG emission, in the context of climate change.”

Vietnam has a high share of renewable energy in the total generation mix, with hydropower accounting for 42 percent of power generation, much higher than that of many other countries. The conference highlighted that Vietnam can further develop its solar and wind potential, but this will require improvement in the regulatory framework. However, even if Vietnam fully taps into its potential in renewable energy, it may still not be able to fully meet future energy demand. Greater efficiency in the generation, transmission and distribution of energy will be critical.  One other area with huge potential benefits is regional power trade.

Participants at the conference also discussed low-carbon development and whether Vietnam could pursue a path of continued economic growth without an expansion in carbon emissions. A report released at the conference, Exploring a Low-Carbon Development Path for Vietnam, estimated that the low-carbon development scenario should not adversely affect economic growth in Vietnam and may instead boost growth in the long run. The report’s conclusion was based on the evidence that growth and a clean environment can be realized simultaneously and can be mutually reinforcing over time.

Vietnam continues to be committed to supporting competition in the power sector and the government has set out a clear roadmap for developing the Wholesale Electricity Market, which is to be fully operational by 2021.  

To ensure the financial sustainability of the power sector, Vietnam needs to promote effective competition and ensure large public and private sector investment,” said Anita Marangoly George, Senior Director, Energy & Extractives.

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