Vietnam looking to nuclear, solar amid difficulties in coal, gas, wind, hydro

Vietnam is considering resuming nuclear power development and boosting solar power capacity as it faces challenges in expanding coal, gas, wind and hydro power.

In a recent meeting, the central government directed the Ministry of Industry and Trade (MoIT) to conduct a review of projects outlined in the power development plan over 2021-2030 with a vision to 2050 (PDP VIII), according to a statement late Sept. 12.

The implementation plan for PDP VIII was only approved five months ago in April, following prolonged discussions and delays, and the MoIT is expected to conduct another review due to the slow progress, particularly in LNG and offshore wind power.

Delays to these projects could impact the power supply needed for Vietnam's economic growth which, projected at over 7% per year, requires 12% to 15% annual increases in power generation, the government said.

To expedite the legal framework for power projects, the government has established a working group led by industry and trade minister Nguyen Hong Dien, with the heads of state-owned energy companies Petrovietnam and Vietnam Electricity (EVN).

This group has been tasked with conducting a final review of the draft electricity law expected to be submitted to the National Assembly for approval in October. The revised law will incorporate regulations for developing renewable energy including new energy sources.

The MoIT has also been instructed to collaborate with other ministries, government agencies, and state energy companies to review applicable laws and remove legal barriers to power projects.

MoIT will study countries that have successfully developed nuclear power to enhance baseload capacity and reduce emissions, and submit the proposal to the Politburo, Vietnam’s highest decision-making body, for review, according to the statement.

In 2016, Vietnam scrapped an ambitious plan to construct the country’s first two nuclear power plants, citing competitive energy prices, lower-than-expected electricity demand, and high construction costs.

Project delays

In line with federal directives, MoIT is gathering feedback from various ministries, government agencies, and state-owned energy companies to revise PDP VIII.

Vietnam’s commercial electricity sales rose 13.7% year-on-year in the first seven months of 2024, surpassing annual growth expectations of 9.1% for 2021-2025 set in PDP VIII. However, the development of coal, gas, offshore wind, and hydro power has lagged expectations, according to MoIT’s document.

PDP VIII caps coal-fired power capacity at 30.13 GW by 2030, allowing for an additional 3.383 GW to be developed from projects already under construction. MoIT said new coal projects are not feasible due to local opposition and lack of financial support.

Under the power plan, Vietnam aims to raise hydropower capacity to 29.346 GW from 22.878 GW currently, which carries risks related to natural disasters, climate change, and other unforeseen challenges, the ministry said.

Separately, it will be challenging to raise wind power capacity to 21.880 GW by 2030 under PDP VIII. Currently, onshore and nearshore wind is 3.061 GW; and reaching 6 GW of offshore wind by 2030 is nearly impossible with no offshore plants currently approved. It is estimated that building 1 GW of offshore wind power costs around $2.5 billion and takes six to eight years, MoIT said.

For LNG, under PDP VIII, Vietnam plans to develop 13 LNG-fired power plants with a combined capacity of 22.4 GW by 2030, but currently there are none operational. The first 750 MW LNG-fired power plant, Nhon Trach 3, is scheduled to begin test runs on Oct. 15, and the 750 MW Nhon Trach 4 two months later, project developer PV Power said Aug. 30.

It will be challenging for other projects to complete by 2030, which poses risks for energy security.

“LNG is one of the main baseload power sources to ensure safe and stable operation of the power system. The low rate of LNG baseload power expected until 2030 and the fact that other power sources may not be put into operation according to the planning schedule will cause difficulties in ensuring power supply in the 2026-2030 period, especially for the northern region,” MoIT said, calling for acceleration of planned projects and replacing delayed ones with alternatives.

One short-term solution is to expand solar power as it can be installed quickly, but under PDP VIII solar is not a priority with only 1.5 GW of new large-scale capacity scheduled by 2030. The solar target under the plan is 12.836 GW by 2030, excluding rooftop solar, and the ministry plans to promote solar power further.

The other solution is developing nuclear, which is being used by 32 countries and accounted for 9.1% of global power output in 2023, MoIT said.

Vietnam has not included nuclear in PDP VIII but should consider small modular reactors (SMRs), including floating reactors, with a capacity of 300 MW each that can be built within 24 to 36 months, the statement said.