Vietnam approves plan to boost wind, LNG by 2030

Vietnam said on Tuesday that a long-awaited power plan for this decade has been approved, with the aim of expanding wind and gas production while reducing reliance on coal.

By the middle of the century, the PDP8 plan hopes to start the transition to carbon-neutrality while ensuring Southeast Asia's energy security.

According to official estimates, the plan would cost $134.7 billion to implement, with part of the money coming from foreign investors for new infrastructure and power plants.

To assist Vietnam in moving away from coal, the G7 and other affluent nations contributed $15.5 billion in first investment in December.

Due to internal conflicts and work on challenging changes, the proposal had been put off for more than two years. Before being approved by Prime Minister Pham Minh Chinh, it underwent a dozen draft changes. In order to be finished, it now requires the parliament's approval, which is anticipated to happen this month.

The decision was a crucial first step towards releasing funding for renewable projects, notably offshore wind, according to a diplomat from the G7 donor group on Tuesday. He asked to remain unnamed because he was not permitted to speak to the media. The ambassador pointed out that since Vietnam will continue to rely heavily on coal in this decade, it was not totally in accordance with G7 aims.

The government projects it would require up to $658 billion, of which one-fifth must be spent this decade, to finish its planned transition to carbon-neutrality with the complete phase-out of coal by 2050.

The goal is for Vietnam's power generating capacity to increase from 69 GW at the end of 2020 to more than 150 GW by 2030.

By 2030, power plants using both domestic gas and imported liquefied natural gas (LNG) will be a crucial source of energy, with a combined installed capacity of 37.33 GW, or 24.8% of the total, with LNG making up the majority, according to a government document seen by Reuters but not yet published.

This is a fourfold increase from 2020, when the nation only generated 9 GW of natural gas from sources in the South China Sea. At the moment, it is not importing any LNG.

Renewable Energy

At least 31% of the nation's energy needs, up from about 25% in 2020, are anticipated to be satisfied by wind, solar, and other renewable energy sources, excluding hydropower, by 2030. If G7 promises are fully executed, their contribution might increase to 47%, claims the document.

18.5% of the total energy mix will come from wind, most of it from onshore sources, and 8.5% will come from solar energy, almost three times as much as wind.

By the end of this decade, up from zero at the moment, offshore wind producing capacity is expected to reach six gigatonnes (GW), and at least 70 gigatonnes (GW) by 2050, which is especially attractive to international investors. According to Reuters, the proposal considerably lowered the initial goal of seven GW by 2030.

However, the government may still need to pass new regulations on the use of maritime space, so the pace at which new projects are launched is uncertain.

From over 30% in 2020, hydropower would make up 19.5% of the electricity mix by 2030.

By 2030, coal would still be a significant energy source, making up 20% of the mix, but in 2020, it still accounted for close to 31%. But because of the anticipated expansion in total output, coal-generated power will rise from 21 GW in 2020 to more than 30 GW by the end of the decade

Source: Reuters