Insight
Can Vietnam's power plan generate US$170 bn of investment?
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Vietnam has an urgent need of power stemming from its position as South East Asia's fastest growing economy and poor track record of project delivery. In the revised PDP published in March 2016, power demand is forecast to grow three-fold in the next 15 years with an incremental capacity growth of 95 GW. With 68% of the capacity additions targeted for private sector participation, opportunities in Vietnam should be ample. Wood Mackenzie expects the power growth rate to be more moderate but still sees an investment requirement of close to US$ 90 billion by 2030. Given the national utilities are financially stretched, the Vietnamese government is keen to improve the investment climate and has been working on a more favourable policy initiatives for private sector participation. We assess what's required to realise the opportunities in the revised PDP.
Table of contents
- Executive summary
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Key aspects of the revised PDP VII
- PDP has a history of over-estimating power demand (unlike Wood Mackenzie)
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Lower 2030 demand but ambitious growth rates are maintained
- Reduced capacity build-up
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Changes to the fuel mix – greater role for solar but coal continues to be favoured
- Share for coal remains significant despite revision to demand
- Gas demand is marginally squeezed despite additional capacity
- Renewables can play a greater role with right level of incentives
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Challenges to implementation
- National companies are financially stretched
- The aspirations for private investment do not reflect recent history
- Implementation of feed-in-tariffs
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How can private investors navigate the opportunities?
- New regulations may start to provide some clarity
- Developing gas plants is difficult and the government doesn't prioritise domestic gas
- Coal plants face fewer hurdles than gas
- What else is needed from the government?
- Conclusion
Tables and charts
This report includes the following images and tables:
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Investment requirements PDP VII vs Wood Mackenzie expectationsPower generation forecastPower capacity forecast
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2015 generation forecast (from 2011) vs actual generationCan Vietnam's power plan generate US$170 bn of investment?: Image 3Generation by fuel in 2030Generation mix by fuel in 2030IPP participationShare of IPPs
What's included
This report contains:
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