Major achievements

Extensive transmission lines connecting the northern and southern regions have been completed providing a total length over 3,000km (63). Under the Strategy for Electricity Sector Development approved in 2004, the Government of Viet Nam plans to establish a power market, diversify investment and trading, and encourage the participation of several economic sectors. The Electricity Law, which came into effect in 2005, initiated the establishment of a power market along with the Electricity Regulatory Authority of Viet Nam.

 Major challenges

Elasticity of electricity is very high in Viet Nam at 1.9 to 2. This is because, between 1995 and 2005, the annual GDP growth rate is 7.5 per cent while annual electricity consumption growth rate is double that figure at 14 per cent. Viet Nam is planning to reduce that elasticity figure to 1.2 by 2025. (64)

Other challenges include an underdeveloped electricity system without reserve capacity, and therefore, Viet Nam can suffer from electricity shortages at times. Additionally, there is generally insufficient investment in electric power development to meet the rising demand. Though oil is not used as much in generating electricity as it is in other sectors, Viet Nam’s dependence on imported oil and its lack of stockpiles can be an energy security issue.

With regard to restructuring or liberalizing the power sector, the Electricity Viet Nam (EVN) had succeeded in privatizing 21 subsidiaries and converting others to limited liability companies by 2006. The Power transmission companies and hydropower plants will remain under the management of EVN, but under the 2006 to 2010 development plan there is a proposal to privatize or restructure the provincial power companies and some distribution companies . (65)

 Electricity targets

In 2005, renewable energy accounted for only 2 per cent of installed capacity, and this figure is expected to only rise to 3 per cent by 2020. In terms of fuel mix, the share of hydro is expected to decrease from 37 per cent in 2005 to 25 per cent in 2025, while coal-fired power plant will account for 42 per cent in 2025. In 2020, Viet Nam is planning to install the first nuclear plant (2,000 MW) and add two more units by 2025. Despite the planned additions to the electric power generation capacity, short fall between the projected demand and generation is expected to be met by importing electricity from neighbouring countries such as China, the Lao People’s Democratic Republic and Cambodia. (66)

 Rural electrification

Rural electrification has achieved 90 per cent at household level.
Viet Nam has many low voltage distribution systems, and suffers from high losses from the low voltage system in rural areas (20-25 per cent) compared to total system loss (12 per cent). (67)

 Energy efficiency

In 2006 a national target programme for energy efficiency for the period from 2006 to 2015 was approved. Though the focus is generally on energy, this will have a significant impact on electricity consumption. Key activities will include public awareness raising, developing legal frameworks that support energy efficiency, enhancing capacity for the efficient use of energy in building construction, design and management, and utilizing standards and product labelling for selected appliances. (68)

 Environmental issues

In 2006, the Environmental Protection Law came into force affecting all power utilities. Power utilities are required to undergo an environmental impact assessment before construction and undergo annual monitoring of the ambient conditions and pollutant emissions to establish their compliance with national standards (69). The Government of Viet Nam is aiming to support the research and development of renewable energy technologies and is a signatory to the UNFCCC with an interest in utilizing the Clean Development Mechanism . (70)

Stakeholders

Ministry of Industry 
Electricity Regulatory Authority of Viet Nam
Viet Nam Electricity

(63) Presentation by Mr. Tran Thanh Lien, Director, International Cooperation Department, Institute of Energy at the Expert Group Meeting on Sustainable Development Indicators for the Power Sector, ESCAP, 18 July 2007.
(64) Ibid.
(65) IAPEC, APEC Energy Overview 2006, (Institute of Energy Economics, 2007).
(66) Presentation by Mr. Tran Thanh Lien, Director, International Cooperation Department, Institute of Energy at the Expert Group Meeting on Sustainable Development Indicators for the Power Sector, ESCAP, 18 July 2007.
(67) Ibid.
(68) APEC, 2007, APEC Energy Overview 2006, Institute of Energy Economics, Japan
(69) Viet Nam Electricity http://www.evn.com.vn/Introduction/introduction_e.asp?Root=LinhVucKinhDoanh&FileName=HoatDongMoiTruong  accessed October 2007
(70) APEC, 2007, APEC Energy Overview 2006, Institute of Energy Economics, Japan