Global Courant
HANOI – Vietnam is facing power outages caused by a heat wave that has exposed structural and bureaucratic problems, limiting available power to half of installed capacity and efforts to raise $15.5 billion ($20.8 billion) in mobilize global climate finance.
The manufacturing hub is home to large factories run by the likes of tech companies Samsung and Foxconn, but is struggling to upgrade its network, an important move to meet demand and lure companies diversifying from China and elsewhere.
“Many factories have had to shut down production due to serious power cuts, and the interruptions are frequent,” said Mr. Hong Sun, chairman of the Korean Chamber of Commerce in Vietnam.
“This is a very serious problem for South Korean companies operating in Vietnam.”
And European companies in June urged the government to take swift action to tackle the energy crisis.
“Tackling power shortages requires more coordinated efforts to ensure an efficient decision-making process for electricity market reforms,” said Ms Trang Nguyen, head of the Southeast Asia team at Australia’s non-profit Climateworks Centre.
But against that background, renewable energy is unlikely to come to the rescue any time soon.
Despite a recent binge of solar energy development, the Southeast Asian country, home to 100 million people, relies on coal and hydropower.
It has nearly 80 gigawatts (GW) of maximum installed capacity, but the heat wave has cut output to less than half at peak times, data for two-week averages through June 11 from state grid operator EVN shows, or not even enough for normal days .
Average peak demand has roughly quadrupled since 2006 to 42.5 GW in 2021, an EVN presentation in February showed. That left the densely populated and industrialized north 4.35 GW short during the heat wave, the government said.
Coal-fired power plants accounted for about 60 percent of electricity production last week, data from EVN showed, and coal imports in May were the highest since June 2020 at 4.5 million tons, according to data from Refinitiv.
But even coal falls short, as about 25 percent of such plants’ capacity is idle for repairs, the industry ministry said.
A lack of rainfall has hit production of hydropower, the No. 2 source of electricity, with some northern counties receiving only about a fifth of their 2022 figure, weather data shows.
The water level of nearly all northern hydropower plants is too low to operate at more than a quarter of their designed capacity, the Ministry of Industry said.
