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Approval of key plan comes after years of delays, dozen
drafts
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Move may help unlock billions of dollars in foreign
investments
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G7 diplomat welcomes move, despite high reliance on coal
(Adds chart)
By Khanh Vu and Francesco Guarascio
HANOI, May 16 (Reuters) - Vietnam said on Tuesday it has
approved a long-awaited power plan for this decade, in a move
meant to boost wind energy and gas, while reducing reliance on
coal.
Known as PDP8, the plan aims to ensuring energy security for
the Southeast Asian country while it begins the transition to
becoming carbon-neutral by mid-century.
The plan needs $134.7 billion of funding for new power
plants and grids, the government estimated, with part of the
money expected to come from foreign investors.
In December, the Group of Seven (G7) nations and other wealthier countries pledged $15.5 billion in initial funds to support Vietnam's transition away from coal. Amid internal squabbles and work on complex reforms, the plan had been delayed for more than two years. It has seen a dozen of draft versions before being approved by Prime Minister Pham Minh Chinh, and now needs approval from the rubber-stamp parliament, possibly this month, before its final adoption. A diplomat from the G7 donors' group, who declined to be identified as he not authorised to speak to media, said on Tuesday the approval was an important step and necessary to unlock funding for renewable projects, especially offshore wind. It was, however, not completely in line with G7 goals, the diplomat added, as Vietnam will still be heavily reliant on coal this decade. To complete its planned transition to carbon-neutrality with total phase-out of coal by 2050, the government estimates it needs up to $658 billion, of which one-fifth would have to be disbursed this decade. The plan would more than double Vietnam's power generation capacity to more than 150 GW by 2030 from 69 GW at the end of 2020.
GAS, WIND AND COAL
Power plants using domestic gas and imported liquefied
natural gas (LNG) are set to become a crucial source of power by
2030, with a combined installed capacity of 37.33 GW, or 24.8%
of the total, with LNG accounting for the lion's share,
according to a government document seen by Reuters and not yet
published.
That is a fourfold increase from 2020, when the country
produced just about 9 GW of natural gas from fields in the South
China Sea. It is not importing any LNG at the moment.
Wind, solar and other renewable sources, excluding
hydropower, are set to cover at least nearly 31% of the
country's energy needs by 2030, the government said, from about
25% in 2020. Their contribution could raise to 47% if G7 pledges
are fully implemented, the document said.
Wind will account for 18.5% of the total power mix, most of
it onshore, whereas the contribution from solar energy would
fall nearly threefold to 8.5%.
Offshore wind power capacity, which is of particular
interest to foreign investors, is expected to reach six GW by
the end of this decade from zero now and at least 70 GW by 2050.
The plan slightly revised down the initial target of seven GW by
2030, as Reuters reported earlier in May.
But it is unclear how fast new projects could be launched,
as the country may still need to approve new legislation on the
use of marine space.
In the energy mix by 2030, hydropower would account for
19.5%, down from over 30% in 2020.
Coal would remain a crucial energy source, accounting for
20% of the mix by 2030, but down from nearly 31% in 2020.
However, because of the expected jump in total output, energy
generated from coal would increase to more than 30 GW by the end
of the decade, from 21 GW in 2020.
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Vietnam's energy mix ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Khanh Vu and Francesco Guarascio; Editing by Raju
Gopalakrishnan and Jacqueline Wong)
