Vietnam slashes 2030 capacity target yet makes more room for renewables under new power strategy

• Vietnam has actually cut its 2030 power capacity target by 35GW under its recently set draft Power Master Plan VIII (PMP8) but is making more room for renewables as it looks for to reduce its reliance on coal.

Under the PMP8, which has actually been modified numerous times amidst continued disagreement between federal government bodies, Vietnam's national power capacity by 2030 will certainly be changed down 146GW as looks for to retire a majority of coal-fired power generation sites in the nation.

On Tuesday (26 April) in a meeting chaired by Vietnam's Deputy Prime Minister Le Van Thanh, the country's Minister of Industry as well as Profession, Nguyen Hong Dien, stated the strategy will likewise target an extra equivalent equilibrium in local electrical power generation and also sustain the development of other fuels like hydrogen and ammonia.

Vietnam has recently been plagued by governing as well as operational unpredictabilities originating from a lack of clear policy, an "underdeveloped grid capacity" and also the constant modifications to its PMP, according to Fitch Solutions.

According to Van Thanh, the new plan will certainly save "tens of billions of dollars" by "reducing investment in transmission lines and also reducing transportation expenses", aiding to lower power prices for consumers.

There was no mention of solar in the new plan-- in March Vietnam's federal government claimed its organized 18.4 GW of solar capacity for the 2021-2030 duration is "too high" following issues with curtailment and grid links-- however there were numerous references to a growth of both onshore as well as offshore wind.

According to state-run utility EVN, Vietnam had 76.6 GW of total set up power capacity at the end of last year, with wind and also solar composing 27% of total capacity.

Last month, Fitch Solutions claimed its expects the growth of non-hydro renewables to "slow significantly over the near term" after the delivery of a stockpile of projects due for completion over 2022 due to "numerous regulatory and functional unpredictabilities".

Fitch stated the regular revisions to Vietnam's Power Master Plan included "significant differences throughout each modification in regards to the roadmap that federal government wants to adopt for the industry."

"We believe the lack of a clear policy instructions will weigh on near-term capitalist view," included the study firm.

After experiencing rapid growth in solar release-- greater than 9GW of rooftop solar was set up in Vietnam in 2020, around 6GW of which was installed in December of that year alone-- Vietnam has experienced substantial curtailment issues, with many projects additionally having problem with connection issues.

The quantity of solar capacity included plummeted in 2021, far overtaken by wind, as well as this pattern is expected to continue this year, before solar takes the lead again in 2023, accord to Fitch Solutions projections.

The draft plan will be submitted the Vietnam's Prime Minister in May for authorization.