Regarding the issuance of the long-awaited Power Development Plan VIII (PDP8), on 25 April 2023, the Ministry of Industry and Trade of Vietnam (MOIT) delivered a Brief Report on the review of the PDP8 with some proposal to the Permanent Government (Report). The notable points of the Report are as follows:
Renewable energy sources
Firstly, the Report presents the maximization of hydropower, the cheapest source of electricity, to a capacity of about 40,000 MW on the basis of environmental protection. On a separate note, according to the Report, the storage power resource will be developed with the goal of having storage hydroelectric power plants with a capacity of roughly 2,400 MW and having storage batteries be distributed with a capacity of 300MW, when the cost is affordable, all by 2030. Forwarding to 2050, the storage power capacity will reach between 30,650 and 51,850 MW.
Solar and wind energy sources, as a global trend, are prioritized to be developed for on-site use, without connecting to the national grid. Also, regarding the solar power development orientations, the aim is to connect the solar power with the storage batteries when the cost is lower. Rooftop solar are also prioritized to be developed for self-consumption with the capacity of around 10,355 MW by 2030, producing roughly 15.5 billion kWh. Since the development of this kind of power source which has (i) no capacity restrictions; (ii) affordable costs; (iii) the instant use for current power system without needing to be upgraded; and (iv) the requirement for the issuance of ground-breaking policies, solar power is given special emphasis in the Report. The Direct Power Purchase Agreement mechanism is also mentioned in the Report as a mean to test out about 1,000 MW of solar power. Regarding the current 27 solar power projects with a combined capacity of 4,136.25 MW that were included in Power Development Plan VII (PDP7) without being assigned to investors, it is advised in the Report that they will not be implemented until 2030.
When it comes to wind energy, the MOIT focuses on substantial development of offshore wind power for export, without connecting to the national grid system, to fully utilize the potential of offshore wind power (approximately 600,000 MW within 200 km from coast) to provide electricity and new forms of energy. According to the Report, the capacity will be between 3,000 and 4,000 MW by 2030.
Thermal power resources
It is the aim of the MOIT to build and develop thermal power facilities to provide an ongoing source of electricity and putting in place a conversion to achieve net zero emissions by 2050. For that reason, only the projects listed in the revised PDP7 that are currently being built will be continued until 2030, with an emphasis on switching to biomass/ammonia fuel for projects that have been in operation for 20 years when the prices are affordable. The operations for projects that have been in operation for more than 40 years will also be terminated. Orientation to 2050, entirely transition to biomass/ammonia for the generation of electricity is expected instead of using coal. As for LNG, the MOIT prioritizes domestic gas usage for power generation and then the import of natural gas/LNG when there is a shortfall, alongside creating LNG power projects with synchronous LNG import infrastructure and switching to fuel use. Hydrogen technology is also on the wish list when it becomes commercialized, and the price is right.
Import/export of electricity
About 5,000 MW of electricity will be imported in 2030, with a goal toward 11,042 MW in 2050. The process of importing power may be scaled up and sped up if the conditions are good and the price is fair.
Please do not hesitate to contact Dr. Oliver Massmann under email@example.com if you have any questions on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.