Increasing Low-carbon Energy Supply for More People and Businesses in Vietnam

Challenge

When the project was approved, in 2014, Vietnam was one of the most energy-intensive countries in East Asia. It needed to improve energy efficiency, meet rapid growth in electricity demand, make short-term investments in transmission and relieve constraints on long-range transmission capacity, and improve grid operations. The country’s Power Development Master Plan 7, adopted in 2012, identified the need to invest about $800 million a year in the transmission network infrastructure by 2015 to keep up with demand and reduce overloads and load shedding, which could lead to power outages that affected individuals and businesses.

Approach

The project aimed to support Vietnam to improve the capacity, efficiency, and reliability of electricity transmission services in four economic hubs of Vietnam: the Hanoi Area, the Ho Chi Minh City Area, the Mekong Delta, and the Central Region. It sought to enhance transmission infrastructure by building or rehabilitating 20 transmission lines and substations across all voltage levels within Vietnam’s established transmission system. It also supported (a) the development of a smart grid network by financing the modernization of monitoring, control, and protection equipment in 15 of 500 kV and 220 kV substations, and (b) the upgrading of the information system for managing operations and equipment and establishment of a data and metering system ($55 million). The project also provided capacity building to support the efficient implementation of the power sector reform ($15 million).

Results

Over its 20-year lifetime, the project enhanced capacity, increased efficiency, and reduced greenhouse gas emissions, while ensuring improved access to more reliable electricity services for both individuals and businesses.

• The project increased transmission capacity by 15 percent and enhanced the efficiency and reliability of electricity transmission in the Greater Hanoi and Greater Ho Chi Minh City areas.
• Implementation of smart-grid technology and a computer-based Assessment Management System (AMS) reduced average operations and maintenance expenses per megawatt hour transmitted by approximately 20 percent, from $0.83 in 2015 to $0.67 in 2021.
• The average duration of faults for the entire transmission system in Vietnam fell from 76.2 minutes in 2013 to 15.4 minutes in 2021, reducing unmet demand and generation costs.
• The project facilitated the integration of renewable energy sources on a larger scale, leading to a reduction of approximately 95,000 tons of greenhouse gas emissions annually.

Bank Group Contribution

The International Bank for Reconstruction and Development (IBRD) provided a $500 million loan. The rest of the total $731 million needed for the project from the EVN Fund.IBRD also provided extensive analytical and technical assistance.

Partners

EVN implemented the project, with financial support and technical assistance from IBRD.

Looking Ahead

The project provided a technology benchmark for improving the capacity, efficiency, and reliability of the electricity transmission system in Vietnam. Based on the experiences gained from the design and implementation of this project, EVN continues to identify improvement needs and actively plan for continuous network upgrades and expansion.