What is Viet Nam's pathway to limit global warming to 1.5°C?

Power

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.1,2 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 2025.3,4 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.5 The largest solar farm in Southeast Asia began operations in October 2020 despite global supply chain disruptions.6

Viet Nam’s wind feed-in-tariff has been extended to December 2023 with an auction system under consideration beyond 2023.7

Viet Nam's power mix

terawatt-hour per year

Scaling

Dimension

In the 100%RE scenario, non-energy fossil fuel demand is not included.

  • Graph description

    Power energy mix composition in generation (TWh) and capacities (GW) for the years 2030, 2040 and 2050 based on selected IPCC SR1.5 global least costs pathways and a 100% renewable energy pathway. Selected countries include the Stated Policies Scenario from the IEA's World Energy Outlook 2021.

    Methodology

    Data References

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.8 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.9 However, by November 2021, Viet Nam pledged to phase out coal by the 2040s.10 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 2021-2026.11 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.

Viet Nam's power sector emissions and carbon intensity

MtCO₂/yr

Unit

Investments

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.

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.

Viet Nam's renewable electricity investments

Billion USD / yr

Scaling

  • Graph description

    Annual investments required for variable and conventional renewables installed capacities excluding BECCS across time under 1.5°C compatible pathway.

    Methodology

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
649
28 to 68
-34 to 0
-24 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
per cent
50
0 to 7
0 to 0
0 to 0
Share of unabated gas
per cent
18
4 to 4
0 to 0
0 to 0
2034 to 2035
Share of renewable energy
per cent
31
89 to 94
100 to 100
100 to 100
Share of unabated fossil fuel
per cent
69
6 to 11
0 to 0
0 to 0

BECCS are the only Carbon Dioxide Removal (CDR) technologies considered in these benchmarks
All values are rounded

Cookie settings

Just like other websites, we use cookies to improve and personalize your experience. We collect standard Internet log information and aggregated data to analyse our traffic. Our preference cookies allow us to adapt our content to our audience interests.