Power decarbonisation by 2030
Viet Nam’s largely untapped renewable energy potential can be harnessed to reduce emissions in the electricity sector. In 2017, renewables had a 45% share of the power mix. 1.5°C compatible pathways shows that renewables can generate 93-95% of Viet Nam’s electricity by 2030. Renewable energy combined with reducing energy demand lowers the need for carbon dioxide removal (CDR) technologies.
In 2017, the carbon intensity of the power sector was 345 gCO₂/kWh, which could be reduced by 88-93% to around 23-41 gCO₂/kWh by 2030.
Viet Nam needs to upgrade its electricity grid to enable a transition to renewables. The state-owned company Vietnam Electricity (known as EVN) has often curtailed wind and solar output without compensation as the unplanned additional power capacity created pressure on the grid.18,19 Curtailing renewables creates market uncertainty and risking the bankability of future renewable projects.
Since 2017, Viet Nam’s solar power generation capacity has risen from negligible levels to 16.5 GW by 2020, beating its target for 2025.2,20 Viet Nam extended its solar feed-in tariff during 2020 (which then ended in January 2021), and plans to transition to competitive bidding through solar auctions.2 The largest solar farm in Southeast Asia began operations in October 2020 despite global supply chain disruptions.2
Viet Nam’s wind feed-in-tariff has been extended to December 2023 with an auction system under consideration beyond 2023.21
Towards a fully decarbonised power sector
Our analysis shows that emissions from the electricity sector need to have peaked in 2020, and reach full decarbonisation around 2035. A fully decarbonised power sector requires a transition from the current, coal-heavy power system, and phasing out coal and gas by around 2030 and 2034 respectively.
Although the October 2021 draft Power Development Plan 8 (PDP 8) indicates some coal capacity plans will be cancelled (nearly 15 GW originally planned by 2030 in the PDP 7), planned capacity additions remain substantial.22 Viet Nam had an installed capacity of 20.4 GW in 2020, and the draft PDP 8 suggests that a further 20 GW of coal will be developed between 2021 and 2030. This underestimates the increasing price competitiveness of renewable energy compare to coal.23 However, by November 2021, Viet Nam pledged to phase out coal by the 2040s.8 Viet Nam needs to align its power plan with the phase out coal commitment.
The draft PDP 8 also plans to ramp up gas and oil-fired power with over 27 GW capacity planned for 2030. The country is on a trajectory to ramping up natural gas with a pipeline of around 26GW between 2021-2026.1 Fossil fuel plans will lock Viet Nam into a carbon intensive energy system and risk expensive stranded assets. The potential for wind and solar are huge, but the draft PDP 8 plans for just 11.8 GW wind and 18.6 GW solar respectively by 2030.
Reaching zero CO₂ emissions in the power sector would require an accelerated transition to renewable energy to meet the electricity demand. Investment in the grid infrastructure and secure bankable environment for investors would help enable renewable energy projects.
1 Global Gas Plant Tracker. Global Gas Plant Tracker – Global Energy Monitor. (2021).
2 Climate Action Tracker. Viet Nam. November 2020 update. Climate Action Tracker. (2020).
3 Chapman, A., Urmee, T., Shem, C. & Fuentes, U. Energy transition to renewable energies. Opportunities for Australian cooperation with Vietnam. (2019).
4 IEA. Data & Statistics. International energy Agency, (2020).
5 MNRE. National Communication of Vietnam, The Third. (2019).
6 Viet Nam Government. Viet Nam Third Biennial Updated Report. (2020).
7 Phan Anh. Vietnam pledges to phase out coal power. VnExpress International, (2021).
8 UN Climate Change Conference (COP26). Global Coal to Clean Power Transition Statement. (2021).
9 Phạm Minh Chính. Viet Nam will take stronger measures to reduce greenhouse gas emission: PM . Viet Nam News. (2021).
10 Viet Nam Government. Updated Nationally Determined Contribution. (2020).
11 Viet Nam Government. Approving the Viet Nam’s Renewable Energy Development Strategy up to 2030 with an outlook to 2050.(2015).
12 Viet Nam Government. Resolution 55-NQ/TW – On Orientations of the Viet Nam’s National Energy Development Strategy to 2030 and outlook to 2045. (2020).
13 MOIT. Vietnam National Energy Efficiency Program 2019-2030. (2019).
14 Viet Nam Government. Approval of the Revised National Power Development Master Plan for the 2011-2020 Period with the Vision to 2030 (translated by GIZ). (2016).
15 UN Climate Change Conference 2021. Glasgow Leaders’ Declaration on Forests and Land Use – UN Climate Change Conference (COP26). (2021).
16 Climate Action Tracker. Viet Nam can easily achieve its new target, but it does now cover whole economy and is clearer. Climate Action Tracker. (2020).
17 IEA. Vietnam. International Energy Agency. (2021).
18 MDI. Vietnam Energy Update Report 2020. (2020).
19 Allens. Renewables in Vietnam, Opportunities for Investment. (2020).
20 Vu, T. Vietnam’s extraordinary rooftop solar success deals another blow to the remaining coal pipeline. IEEFA. (2021).
21 Viet Nam Government. Decision on mechanisms to promote the development of solar power projects in Viet Nam. (2020).
22 Baker McKenzie. Vietnam: October 2021 updates to the Draft PDP8. (2021).
23 Viet Nam Government. Draft Power Development Plan 8 (third draft, February 2021). (2021).
24 IEA. Viet Nam. International Energy Agency. (2021).
25 Energy Voice. Enterprize eyes green hydrogen’s potential to ‘supercharge’ Vietnam. Energy Voice. (2021).
26 Phi Nhat. Support policies for EVs mapped out to encourage Vietnamese private sector’s participation. Hanoi Times. (2021).
27 VietnamNet. Vietnam expects new wave of electric vehicles in 2022. VietnamNet. (2022).
28 While global cost-effective pathways assessed by the IPCC Special Report 1.5°C provide useful guidance for an upper-limit of emissions trajectories for developed countries, they underestimate the feasible space for such countries to reach net zero earlier. The current generation of models tend to depend strongly on land-use sinks outside of currently developed countries and include fossil fuel use well beyond the time at which these could be phased out, compared to what is understood from bottom-up approaches. The scientific teams which provide these global pathways constantly improve the technologies represented in their models – and novel CDR technologies are now being included in new studies focused on deep mitigation scenarios meeting the Paris Agreement. A wide assessment database of these new scenarios is not yet available; thus, we rely on available scenarios which focus particularly on BECCS as a net-negative emission technology. Accordingly, we do not yet consider land-sector emissions (LULUCF) and other CDR approaches.
29 October 2021 draft Power Development Plan 8.
Viet Namʼs power mix
terawatt-hour per year
- Negative emissions technologies via BECCS
- Unabated fossil
- Nuclear and/or fossil with CCS
- Renewables incl. biomass
Viet Namʼs power sector emissions and carbon intensity
MtCO₂/yr
- Historical emissions
- SSP1 High CDR reliance
- SSP1 Low CDR reliance
- High energy demand - Low CDR reliance
- Low energy demand
- 100%RE
1.5°C compatible power sector benchmarks
Carbon intensity, renewable generation share, and fossil fuel generation share from illustrative 1.5°C pathways for Viet Nam
Indicator | 2019 | 2030 | 2040 | 2050 | Decarbonised power sector by |
|---|---|---|---|---|---|
Carbon intensity of power gCO₂/kWh | 650 | 30 to 70 | −30 to 0 | −20 to 0 | 2035 to 2038 |
Relative to reference year in % | −96 to −89% | −105 to −100% | −104 to −100% |
Indicator | 2019 | 2030 | 2040 | 2050 | Year of phase-out |
|---|---|---|---|---|---|
Share of unabated coal Percent | 50 | 0 to 7 | 0 | 0 | 2030 |
Share of unabated gas Percent | 18 | 4 | 0 | 0 | 2034 to 2035 |
Share of renewable energy Percent | 31 | 89 to 94 | 100 | 100 | |
Share of unabated fossil fuel Percent | 69 | 6 to 11 | 0 | 0 |
Investments
Demand shifting towards the power sector
The 1.5°C compatible pathways analysed here tend to show a strong increase in power generation and installed capacities across time. This is because end-use sectors (such as transport, buildings or industry) are increasingly electrified under 1.5°C compatible pathways, shifting energy demand to the power sector. Globally, the “high energy demand” pathway entails a particularly high degree of renewable energy-based electrification across the various sectors, and sees a considerable increase in renewable energy capacities over time. See the power section for capacities deployment under the various models.
Viet Namʼs renewable electricity investments
Billion USD / yr
Yearly investment requirements in renewable energy
Across the set of 1.5°C pathways that we have analysed, annual investments in renewable energy excluding BECCS increase in Viet Nam to be on the order of USD 6 to 28 billion by 2030 and 9 to 41 billion by 2040 depending on the scenario considered. The ‘high energy demand, low CDR reliance’ pathway shows a particularly high increase in renewable capacity investments, which could be driven by an increase of electrification of end-use sectors and growing energy demand. Other modelled pathways have relatively lower investments in renewables and rely to varying degrees on other technologies and measures such as energy efficiency and negative emissions technologies, of which the latter can require high up-front investments.