Vietnam is poised to be a key industrial and manufacturing center in Southeast Asia. The country is orchestrating a rapid shift towards renewable energy through its commitment to sustainable energy development. The strategy is outlined in the Power Development Plan 8 (PDP8), which highlights balanced economic growth with environmental responsibility.
A notable shift in renewable energy in Vietnam over the past few years is exemplified by the addition of approximately 10 GW of solar capacity in 2020 alone. Despite this substantial growth, additional acceleration from the Vietnam energy sector is required to meet the prime minister's commitments at the 2021 United Nations Climate Change Conference (COP26), which aims for net-zero carbon emissions by 2050.
While Vietnam claimed the title of Southeast Asia's largest solar energy producer in 2020, the Ministry of Industry and Trade (MoIT) anticipates a shift towards wind energy. The latest PDP8, unveiled in November 2022, underscores renewable energy as a central focus, acknowledging the gradual transition away from coal, which currently constitutes half of the country’s electricity generation.
Apart from wind energy, Vietnam also strategically prioritizes Liquefied Natural Gas (LNG) and integrated storage in its shift towards renewable energy. The use of LNG as a transitional energy source aims to reduce coal dependency, while wind power is recognized as the key driver for renewable development. Additionally, the adoption of innovative technologies, like energy storage, targets to address current challenges such as intermittency in renewable energy sources.
Liquefied natural gas (LNG) is the focal point of the energy transition in Vietnam, as it is actively promoted as a more environmentally friendly substitute for coal, aligning with Vietnam's commitments since COP26. The MoIT prioritizes LNG-to-power plants, aiming for gas to constitute 25% of the power supply by 2030.
Despite expectations of gas development peaking in 2030 with no new projects thereafter, several ventures, including Nhon Trach 3 and Nhon Trach 4 LNG plants, are in advanced stages of development. Additionally, nine other LNG projects have been approved as independent power producers, with notable projects like Long Son, Ca Na, and Quang Ninh currently preparing for power purchase agreement (PPA) negotiations.
The second focal point of Vietnam's energy transition centers around wind energy. Blessed with an extensive coastline, the nation boasts the potential for wind generation up to 512 GW, setting a Southeast Asian benchmark. The MoIT envisions wind energy escalating from 1% in 2020 to 15% in 2030 and an ambitious 30% by 2045, aligning with the central government's net-zero commitments by 2050.
Lastly, the integration of storage solutions is pivotal to addressing intermittency challenges in renewable energy, which can affect grid stability. To address intermittency concerns, the MoIT encourages diverse power sources on PDP8, emphasizing pumped hydro and battery technologies, aligning with COP26 and COP27 sustainability goals, anticipated to rise to 11% by 2045.
Vietnam's energy transition is gaining momentum, driven by ambitious plans outlined in the PDP8. With a strategic focus on renewable energy, such as LNG, wind, and integrated storage, the country is navigating towards a cleaner and more sustainable energy future.
Source: https://ycpsolidiance.com/white-paper/the-current-energy-transition-in-vietnam
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