Can Vietnam's power plan generate US$170 bn of investment? Report

Insight 08 June 2016

Get this report*

$3,000

You can pay by card or invoice

Share link

First name
Last name
Job Title
Company
Email
Telephone

Country

Message

Consent

Please keep me informed about Wood Mackenzie products, services and events.

Submit Category

For details on how your data is used and stored, see our Privacy Notice.

- FAQs about online orders
- Find out more about subscriptions

*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.

Executive summary
Key aspects of the revised PDP VII
- PDP has a history of over-estimating power demand (unlike Wood Mackenzie)
Lower 2030 demand but ambitious growth rates are maintained
- Reduced capacity build-up
- 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
  - Challenges to implementation
    - National companies are financially stretched
    - The aspirations for private investment do not reflect recent history
    - Implementation of feed-in-tariffs
  - 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