04 notes for investors about the implementation plan from the Eighth National Power Development Plan

The implementation plan from the Eighth National Power Development Plan was promulgated by the Prime Minister on 01 April 2024 according to Decision No. 262/QD-TTg on Approving the Plan for the Implementation of the National Power Development Plan from 2021 to 2030, with a vision to 2050 (hereinafter collectively referred to as the “Power Plan VIII”). One of the main purposes of the plan is the orientation for Ministries, Agencies, People’s Committees of Provinces, and Municipal Cities in coordinating with the Ministry of Industry and Trade, and other relevant units to implement Power Plan VIII effectively. Accordingly, the Government has developed specific content to implement Power Plan VIII.

In this article, BLawyers Vietnam presents 04 notes about the Power Plan VIII for investors, as follows:

1. Important power sources, investment priorities for industry for investors until 2030

According to Power Plan VIII, the structure of power sources in Vietnam is oriented toward 02 milestones in 2030 and 2050, as follows:

1. The total domestic gas-fired thermal power capacity is 14,930 MW;
2. The total LNG thermal power capacity is 22,400 MW;
3. The total coal-fired thermal power capacity is 30,127 MW;
4. The total capacity of co-generation power sources, power sources using residual heat, blast furnace gas, by-products of technological lines is 2,700 MW;
5. The total hydropower capacity is 29,346 MW; and
6. The total hydroelectric capacity is 2,400 MW.

2. Other types of power sources until 2030 according to Power Plan VIII

According to Power Plan VIII, there are 03 other types of power sources until 2030, including:

1. Expecting to develop 300 MW of flexible power sources. Prioritizing development in areas where there is likely a lack of spare capacity; taking advantage of existing infrastructure power.
2. Expecting imports of about 5,000 MW from Laos, which can be increased to 8,000 MW when there are favorable conditions with reasonable power prices to take advantage of Laos’ potential export power sources.
3. Renewable energy power sources for export and new energy production are as follows:
   • The potential locations for exporting power abroad are the Central and Southern areas. The export scale is from 5,000 MW to 10,000 MW when there are feasible projects.
   • Using renewable energy to produce new types of energy (such as hydrogen, green ammonia) for domestic demand and export: Prioritizing development in areas with good renewable energy potential and favorable power grid infrastructure; the development scale strives to reach 5,000 MW (mainly offshore wind power source). In addition, the capacity of renewable energy sources to produce new energy is not included in the structure of power sources supplying loads to the national power system.

3. Plan for the development of industrial ecosystems and services about renewable energy

Researching to build 02 inter-regional renewable energy industry and service centers in the period until 2030 as follows:

3.1 The renewable energy service industry center in the North

1. Location: At Hai Phong City, Quang Ninh Province, Thai Binh Province, etc. in the future, expansion into surrounding area could be considered;
2. Scale: Offshore wind power is about 2,000 MW, onshore and coastal wind power is about 500 MW;
3. Factories manufacturing equipment for renewable energy, seaport service, construction, operation, and maintenance;
4. Green industries, low-carbon emission industries; and
5. Researching and training institution.

3.2 Inter-regional renewable energy service industry center in South Central – Southern region

1. Location: At Ninh Thuan Province, Binh Thuan Province, Ba Ria – Vung Tau Province, Ho Chi Minh City, etc. In the future, expansion to the surrounding area could be considered;
2. Scale: Offshore wind power is 2,000-2,500 MW, onshore and coastal wind power is 1,500-2,000 MW;
3. Factories manufacturing equipment for renewable energy development, seaport services, construction, operation and maintenance;
4. Green industries, low-carbon emission industries; and
5. Research and training institution.

4. Investment capital demand until 2030 for investors

4.1 Public capital investment

1. The investment capital demand for plan/projects with priority on completing legal policies and strengthening the capacity of the power industry is about VND50 billion; and
2. The investment capital demand for the power supply program in rural, mountainous and island areas is about VND29,779 billion. Currently, the balance is about VND8,915.6 billion (accounting for 30%), of which the balanced central budget capital is VND7,351.9 billion, and local and EVN capital are about VND1,563.7 billion. Unbalanced capital is about VND20,857 billion (accounting for 70%).

4.2. Capital other than public investment capital

All investment capital for power source and transmission grid investment projects uses capital other than public investment capital. Total investment capital is estimated at VND3,223 trillion (equivalent to USD134.7 billion), of which investment in the power source is about VND2,866.5 trillion (USD119.8 billion), and investment in the power transmission grid part is about VND356.5 trillion (USD14.9 billion).

1. Investment capital in the 2021-2025 period: VND1,366.2 trillion (USD57.1 billion), of which power sources are VND1,150.9 trillion (USD48.1 billion), transmission grid is VND215.3 trillion (USD9.0 billion); and
2. Investment capital in the 2025 – 2030 period: VND1,856.7 trillion (USD77.6 billion), of which power sources are VND1,715.6 trillion (USD71.7 billion), transmission grid is VND141.2 trillion (USD5.9 billion).

The above is not official advice from BLawyers Vietnam. If you have any questions or suggestions about the above, please contact us at consult@blawyersvn.com. BLawyers Vietnam would love to hear from you.

Date: 23 April 2024

Writer: Minh Truong