Vietnam’s electricity consumption has grown twice as fast as the country’s economic growth rate.
The average energy consumption in Vietnam grew 13 percent from 2006-2010, and by about 11 percent from 2011-2015, said Le Tuan Phong, deputy head of the General Directorate of Energy. The country is on the path towards powering itself by 2030, Phong said.
The country’s power production is expected to grow at an annual rate of 14 percent between 2015 and 2030.
Fossil fuels still dominate Vietnamese energy consumption. According to the World Bank, over 66.2 percent of the country’s energy comes from fossil fuels.
Vietnam’s annual coal output is currently about 40 million tons, official statistics show.
Coal has taken over from hydro power as the leading source of electricity in Vietnam, which has recently become a net coal importer.
In response to fast growing demand for power, Vietnam is building more coal-fired thermal plants and buying electricity from neighboring China as part of measures to avoid outages.
Vietnam, however, is faced with a two-fold energy challenge. The country has to generate enough energy for economic growth and for millions of people who still lack access to energy services, while gradually shifting towards clean, low-carbon energy, said Tran Dinh Thien, head of the Vietnam Economic Institute.
“Vietnam’s economic growth still relies heavily on the exploitation of natural resources and relatively low-tech production. Industries such as cement and steel use a colossal amount of energy,” said Thien, adding that only 2 percent of local businesses are high-tech driven.
The Vietnamese government should change the country's economic structure and prioritize energy-saving industries, Thien suggested.
Half of Vietnamese households use solar energy
Along with the need to decrease the reliance on fossil fuels, the country needs to build an energy sector more focused on renewable energy, particularly solar energy.
To put Vietnam on a path to a clean energy economy, the government plans to cut coal consumption by 30 percent by 2030.
The government has also opened up its renewable energy sector to foreign investors, allowing them to invest in power generation. Official statistics show that in 2013, foreign investments in energy through the Build – Operate – Transfer model accounted for 6 percent of total installed capacity.
The country is also restructuring its power sector by breaking up its retail power monopoly EVN to develop a competitive retail power market by 2030.
Vietnam is aiming to generate enough energy to power almost every home by 2020 and increase residential solar power usage to 50 percent of households nationwide by 2050.