The economy of Vietnam is growing steadily and rapidly. Marketresearchvietnam.com forecasted Vietnam’s economy to grow between 6.5% and 7.5% annually from 2019 to 2030.
The rapid growth of the economy, of course, affects how the country consumes energy. As the country’s economy grows rapidly, so does the demand for energy.
The Growing Economy
The economy of Vietnam is supported by not just robust exports but also by foreign investments. This results in the country becoming one of Asia’s fastest-growing economies.
Moreover, Vietnam is benefitted from the trade war between the U.S. and China. The fast-growing economy moves hand in hand with economic modernization and growing industrialization, resulting in the increased demand for energy.
Vietnam Energy Shares
Capacity: 15,857 MW, accounts for 37.6% of the total energy generated.
Capacity: 14,448 MW, accounts for 34.3%
Capacity: 1,370 MW, accounts for 3.3%
Capacity: 7,502 MW, accounts for 17.8%
Small hydropower, diesel and renewables
Capacity: 2,418 MW, accounts for 5.8%
Capacity: 540 MW, accounts for 1.2%
Demand for More Energy
The demand for energy is predicted to increase by over 10% from 2016 to 2020 and around 8% annually from 2021 to 2030. In 2010, the demand for energy is 86 TWh.
In 2020 and 2030, the demand for energy is predicted to reach 265 TWh and between 572 and 632 TWh, respectively. To meet this demand, Vietnam uses coal.
The Increase of Coal-based Energy
According to market research Vietnam, there is an increase in the use of coal as an energy source.
From 2000 to 2015, the share of hydropower and biomass in the country has dropped from 53% to 24% of Vietnam’s total energy supply. At the same time, the share of coal increased from 14% to 35%. These are significant changes.
The shift to the coal-based energy source is unlikely to change, at least not in the foreseeable future. It is not surprising why Vietnam shifts its energy source to coal.
Compared to other energy sources, especially renewable ones, coal is more affordable. Coal can also meet the country’s needs of energy immediately. Using coal, unfortunately, damages the environment.
In 2020, there are 32 coal plants in Vietnam, which the government is planning to increase to 51 coal plants by 2050. By 2025, coal is expected to provide 55% of the total energy generated in the country.
By the time these 51 coal plants are fully operational, they are estimated to burn around 129 million tons of coal annually.
Moving towards Renewable Energy Sources
Although Vietnam’s usage of coal as an energy source is increasing, it doesn’t necessarily mean the country is ignorant of the damage it causes.
Vietnam has included renewable energy sources in its energy plans. So far, the country is making great progress in developing the capacity of its renewable energy sources, which include solar, hydropower, and wind.
The growth of Vietnam’s economy is what drives the increasing demand for energy. As the economy grows, so does the demand energy.
Market research Vietnam has shown that Vietnam is using coal energy as a solution to meet the demand. Although coal dominates the energy sector, renewable energy is not off the table as an alternative source of energy.