Second phase of the Energy Market Liberalization program in Vietnam

Posted on: 25 / 04 / 2016 | 0 Comentarios | Tags: , , , , , , , , , , ,

Vietnam | Energy Market Liberalization | energy and environment

Vietnam is undertaking the second phase of the energy market liberalization program. This is because in recent years, Vietnam has significantly increased its electricity needs, driven by strong economic growth, progressive urbanization and population growth.

The Government’s development strategy assumes demand growth of 10% per year to reach 329 TWh by 2020. The growing middle class and its industrial development have promoted an average demand growth of 12.6% in the period 2005-2012.

By 2020, the state-owned Electricity of Vietnam (EVN) expects demand for electricity to be four times higher than in 2010. For this reason, the Ministry of Industry and Trade (MOIT), responsible for the energy sector, has The task of developing policies and overseeing that the increase in energy supply is at least comparable to increased consumption.

Lack of efficiency in energy transmission and distribution

Vietnam’s energy infrastructures are insufficient to meet demand and are obsolete in terms of technology and conservation status. The lack of efficiency in energy transmission and distribution caused a loss of 10% of energy in 2010 at the national level and, as a consequence, an increase in the prices that have to pay citizens per kW consumed. These losses are progressively reduced and in 2015 they only reached 8.6%.

Vietnam energy market liberalization: Generation capacity and energy mix

The Government of Vietnam is aware of the importance of developing the energy industry and emphasizes the need to diversify energy sources, with emphasis on coal (in the medium term) and renewables (in the long term), accelerate regional integration with Cambodia and Laois and promote efficiency and energy savings in both the distribution system and the industry.

In addition, and apart from the electric mix, the total power generation capacity of all the plants in Vietnam is planned in the future. By 2020 they will increase by about 75,000 MW and by 2030 it will increase to 146,800 MW.

By the end of 2014, total installed capacity in the national electricity system was over 34,000 MW, representing an increase of 210% over 2005.

Vietnam currently occupies 31st place in the world, and third place in electricity generation in Southeast Asia. Energy production grows considerably but fails to keep pace with demand. According to some estimates, capacity should increase by 4,000 MW each year in order to keep pace with demand.

On the other hand, Vietnam is the third largest owner of crude oil reserves in East Asia, behind China and India. Recent offshore explorations have contributed to a substantial increase in proven crude reserves, which grew to 4.4 billion barrels in January 2012 from 0.6 million barrels in 2011, according to the Oil and Gas Journal (OGJ).

The Energy Market in Vietnam 2016 (Spanish)

Report of ICEX Vietnam. Author: Rubén Meca Piernas

 

 

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