What will run Vietnam’s power sector
The market may not complete its power mix transition in this decade.
Vietnam’s power mix will continue to be dominated by fossil fuel in this decade despite efforts to transition to renewable energy, Fitch Solutions reported.
“We believe that the effects of a complete power mix transition away from fossil fuels will not be experienced this decade as the Just Energy Transtion Partnership (JETP) specifically targets coal, leaving room for expansion of the gas-fired power sector,” Fitch noted in a report.
Vietnam entered the US$15.5b JETP on 14 December 2022, in which it agreed with the International Partners Group to reduce coal power generation in Vietnam.
The JETP particularly works to bring Vietnam;s peak emission target to 2030 from 2035, reduce annual power sector peak emissions to 170mtCO2e from 240mtCO2e.
It also seeks to restrict Vietnam’s peak coal-fired power capacity from 37 gigawatts to 30.2GW, and reach 47% power mix contribution from renewables by 2030, up from the current plan of 36%.
“Whilst the JETP for Vietnam limits the peak coal-fired power capacity from 37.0GW to 30.2GW, we expect this target’s impact to abate conventional thermal power dominance this decade to be marginal,” the report also read.
“The JETP will contest Vietnam’s draft Power Development Plan 8 target of having over 36.0GW of coal-fired power capacity by 2030, but could still retain the PDP8’s aim of 30.0GW of coal-fired power capacity by 2025.”