Vietnam's coal-fired power may double by 2030 under draft energy plan

© Reuters.

HANOI (Reuters) - Vietnam may double the amount of coal-fired electric generation it installs by 2030 under a draft power development plan submitted to the prime minister for approval this week.

The draft plan guarantees that Vietnam will become more reliant on coal to power its fast growing economy at a time when financiers and insurers are refusing to back new projects because of fuel's large climate change impact.

Coal-fired power plants will account for up to 31.4% of as much as 143.8 gigawatts (GW) of installed generation capacity planned in 2030, according to a copy of the so-called Power Development Plan 8 (PDP 8) reviewed by Reuters.

That translates to about 41 GW of coal power by the end of the decade, up from 20.7 GW out of 69 GW of capacity from all sources as of 2020, according to the plan.

The Ministry of Industry and Trade which drafted the plan did not respond to multiple emails from Reuters seeking comment on the forecasts.

Vietnam, with a population of 98 million, is seeking to boost its power generation to support the growth of production bases for firms such as South Korea's Samsung Electronics (OTC:SSNLF) and LG Electronics Inc.

The PDP 8 assumes Vietnam's gross domestic product will increase annually by 6.6% between now and 2030 and 5.7% to 2045.

The country will need to invest $115.96 billion in new power plants and power grid expansions to 2030, and up to $227.4 billion to 2045, when installed capacity may be up to 329.6 GW, according to the plan.

Natural gas, including liquefied natural gas, will make up 22.4% of installed capacity by 2030 from 13% at the end of 2020 and then rise to as much as 26.9% by 2045, while coal slips to only as much as 19.4% by then.

By 2030, the proportion of non-hydro renewables will rise to 25.7% of the energy mix by 2030, flat from 24.6% at the end of last year, according to the plan. This would increase to as much as 41.7% by 2045.

Hydropower will fall in the energy mix to only about 20% by 2030 from 30.3% at the end of 2020, the plan showed.

Prime Minister Pham Minh Chinh earlier this week said Vietnam would raise the proportion of renewables in its power mix while pursuing sustainable and efficient use of energy amid the shrinking of its fossil fuel reserves.

"As a developing country that is still facing numerous difficulties, Vietnam is building a harmonious and balanced roadmap for a sustainable energy conversion, adapting to climate change and reducing carbon emission," Chinh said in a statement.