By Francesco Guarascio and Khanh Vu
HANOI/HOA BINH, Vietnam- Lights are off and air conditioning is down at the headquarters of Vietnam’s state-run electricity provider EVN as the country’s top power utility tries to “lead by example” to avoid a repeat of last year’s crippling blackouts, an official tells visitors.
But many businesses around Vietnam’s capital Hanoi appear to be ignoring the call to conserve power, keeping decorative but otherwise purposeless neon lights on the outside of high-rise buildings on all night.
The difficulties in curtailing consumption illustrate the challenges facing Vietnam a year after sudden outages caused losses of hundreds of millions of dollars to multinational manufacturers with investments in the Southeast Asian country.
Vietnam is pursuing a patchwork agenda of energy-saving measures, grid upgrades, regulatory reforms and a massive increase of coal power as it seeks to avert electricity shortfalls, according to government data and interviews with officials and experts.
But Trinh Mai Phuong, EVN’s communications director, explains during a media visit that even the biggest infrastructure upgrade underway, a new $1 billion transmission line connecting the center of the country to the highly industrialized north that was hard hit by blackouts last year, may not be enough.
“I would not say it is a game changer,” he said of the line that could be completed as early as this month, noting power consumption is expected to hit record highs in the coming weeks as the country braces for more heatwaves.
The soaring power demand is making it increasingly difficult for Vietnam to meet climate change commitments while providing enough power to satisfy large investors such as Samsung Electronics Foxconn and Canon
Broader sector-wide reforms are needed over the longer term, foreign investors and analysts said.
In the short term, Vietnam is banking mostly on coal to provide enough reliable electricity.
It may be just enough – or not – but either way it may signal a blow to the country’s commitments to reduce reliance on fossil fuels.
Coal use rose massively in the first five months of 2024, with coal-fired power plants accounting on average for 59 percent of electricity output, exceeding 70 percent some days, according to EVN data.
That was up from nearly 45 percent in the same period last year and 41 percent in 2021, when Vietnam began drafting plans to cut coal that persuaded international donors to commit $15.5 billion to help phase out the fuel.
