VIENAM POWER INDUSTRY

2021

KOTRA HANOI
Feb. 25th, 2021
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VIETNAM POWER INDSUTRY 2021

I. Over view of Vietnam Power Market

In accordance to EVN, by the end of 2020, the total installed capacity of Vietnam power system
reached 69,300MW, increasing 14,000MW in comparison to that in 2019 and raising the scale of
Vietnam's electricity system to second rank in ASEAN (after Indonesia) and 23rd in the world.

Vietnam is set to face a surge in power demand and consumption over the coming decade with the
forecasted annual growth by 8.5-9.5%, which will stimulate the rapid development of power
capacity. As Vietnam Power Report Q1/2021 from Fitch Solution, the power capacity of Vietnam
will have rapid rise at the average growth of 7.8% a year during the period 2020-2029 and add
more than 61GW from the end of 2019 to 2029.

Indicator 2021f 2022f 2023f 2024f

Generation, Total, TWh 276.8 293.5 311.6 329.6

Consumption, Net consumption, 263.4 279.8 298.2 318.6

TWh

Capacity, Net, MW 64,731.6 72,845.5 81,624.8 87,288.2

Source: Fitch Solutions (Vietnam Power Report Q1/2021)

In order to meet the need for power, Vietnam has to increase up to 5,000-7,000MW/year while the
country is at the risk of power shortage in the context that many projects are behind schedule and
energy sources such as thermal power and hydro power have been almost fully exploited. In
details, a report from MOIT in May/2020 showed that among 62 power projects that have the
capacity of over 200MW in revised PDP VII, there are 47 projects cannot meet the deadline or
cannot define the final deadline. This results in a 10,000 MW lower total capacity of the electricity
sources that can be commissioned than master plan.

EVN calculated that the electricity deficit will increase from 6.6 billion kWh in 2021 to the peak
of 15 billion kWh in 2023 and then reduce to about 7 billion kWh in 2024. By 2025, the power
system can meet the electricity load demand if the progress of gas-fired power projects using Block
B, Blue Whale gas such as: O Mon III, IV; Mien Trung I, II and Dung Quat I, III gas combined
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turbines as well as LNG power projects such as Nhon Trach III, IV and Bac Lieu I meet the
schedule.

Unit: Billion Forecasted Power Deficit in 2021-2025

16 15
14
11.8 12
12
10
10
8 6.6 7
6
3.7 3.5
4
2
0
2021 2022 2023 2024 2025
Source: MOIT, KBSV Research Southern - Vietnam Vietnam

Source: MOIT, KBSV Research

II. Power Source Structure

✓ Thermal power

Thermal power sources especially from coal continues to dominate the power generation mix
regardless of slow progress and environmental oppositions in some coal projects. It was
recommended to eliminate 15GW of planned coal projects and to reduce the share of coal power
from 53% by 2030 as based on Vietnam’s revised PDP VII to 37% by 2025 in the upcoming PDP
VIII but it is hard to decide that due to energy security reasons.

Still, there is 14.9GW of coal power plants that are already under construction and almost another
30.3GW under pre-construction stage. Therefore, coal fired power is expected to grow by an
annually average of 7.4% between 2020 and 2029, amid strong government commitment,
financing sources and investor interests, which helps increasing its share in total electricity
generation to 52.6% by 2029.

While Vietnam's oil and gas reserves are depleting, natural gas still also keep its key position in
power generation for Vietnam. Gas fired generation is forecasted to increase at a steady growth
rate of 7.8% in the period 2023 to 2029 as more LNG terminals enter into operation and with more
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major investors' interest in LNG projects. LNG Thi Vai terminal - the first regasification facility
in Vietnam, for example, is expected to operate commercially by 2022. LNG gas imported through
Thi Vai port will provide for LNG Nhon Trach 3 & 4 gas plants, expected to be completed in 2023
and 2024 correspondingly.

✓ Hydropower

The proportion of hydropower in the power mix is going down gradually and is anticipated to
reach a historical reduction of 21.6% in 2029 (~20.5GW) with a modest growth rate of 1.25%
within the decade because of limited project pipeline, robust increase of thermal power source as
well as effects of on-going droughts and heat wave. Many major hydropower dams in Vietnam has
seen record-low water levels, causing a few plants to shut down such as Bung River hydropower
plant 1&2 and A Vuong hydropower project…

However, there are still some big projects preparing for constructions as despite attempts to reduce
dependence on this volatile technology, hydropower is set to remain a traditional component in
Vietnam’s electricity mix, which are:

- Hoa Binh hydropower plant expansion project (480MW) has started construction in January
2021 with total investment of USD 397.24 million. It is expected to be operated in Q3-Q4 of
2024.
- Tri An hydropower plant expansion project (200MW) is waiting for investment policy from

Dong Nai province and expected for operation in 2025.

✓ Non-hydro renewable power

It is projected that non-hydro renewable to grow at robust rate that nearly triple in the next 10

years, reaching more than 25GW by 2029 thanks to supportive regulatory environment for

investors. However, the share of non-hydro renewables generation is only 4.2% over the overall

power mix because of the limitation of grid capacity and a prevalence of base load thermal sources.

By the end of 2020, ERAV has launched the Direct Power Purchase Agreement (DPPA) pilot
programmer where renewable energy producers can sell and deliver electricity directly to
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corporate customers. It will be implemented nationwide from 2021-2023 with the range of 400-
1,000MW.

• Solar power

As of December 2020, there were 102 solar power plants put into commercial operation with a
total capacity of 6,314MW and 135 projects (10,000MW) has just been approved to PDP. Even
though the 110-500kV electricity grid has been upgraded over the years, it still cannot meet the
capacity transmission requirements of newly added solar and wind projects. Therefore, MOIT has
submitted for approval of some additional 220kV and 500kV transmission grid projects in Binh
Thuan and Ninh Thuan areas.

Besides ground solar power plants, rooftop solar power is also growing rapidly, currently
accounting for 11% of the total solar PV capacity on the grid. According to statistics of EVN,
accumulated from 2017 to May 2020, there were 22,900 household and 5,096 enterprise customers
installing rooftop PV with total capacity of 578MW.

In attempt to encourage foreign investments and growth in the sector, the government offers some
preferential policies, attractive FiT and other financial incentives such as preferential tax and duty
levies. In early April 2020, the solar feed-in-tariffs (FiT) for 3 types of solar power were finalized
in Decision 13/2020/QĐ-TTg as follow: ground mounted plants at USc7.09/kWh, floating plants
at USc7.69/kWh and rooftop at USc8.38/kWh. This price is applied for 20 years since commercial
operation date (COD) and solar projects are required to achieve commercial operation by
December 31 2020 in order to attain these FiT rates. However, it is such a tight deadline so it was
proposed to extend the FiT from 6 to 12 months after the end of 2020 but there has not any final
decision for this up till now.

• Wind power

Vietnam is noted to contain one of the highest potential for wind power in the region as it is
endowed with high wind speeds especially in offshore or near-shore areas; MOIT estimates this
potential to be at approximately 475GW. Binh Thuan, Bac Lieu and Ca Mau provinces were
highlighted as priority for offshore wind development and several projects were proposed to
include into the upcoming PDP.
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In June 2020, 91 new projects with the total capacity of over 7GW was approved to PDP VII,
which brought it in line with its new capacity target of 12GW by 2025. Accordingly, 16 projects
(941.2MW) located in North Central region, 9 projects (336.2MW) in South Central region, and
29 projects (2,432.9MW) in Tay Nguyen, Southeast and Southwest region with 38 projects
(3,269.4MW). Besides that, there are 250 awaiting wind power projects (45,000MW) to be
approved to PDP. However, under the threat of overcapacity, MOIT has stopped licensing and
instructed all provinces and cities nationwide to stop approving wind project proposals temporarily
since October 2020 until the PDP VIII be announced.

As solar power, wind power also gets FiT rate, in particular, according to Decision 39/2018/QĐ-
TTg, the price for on-shore wind power is 8.5USc/kWh, offshore wind power price is highly
attractive at 9.8USc/kWh, which increased from the previous rate of 7.8USc/kWh for projects that
meet COD deadline by November 2021. This decision was about to expire by November 2021 but
under Covid 2019 effect, some projects are behind schedule. Therefore MOIT has issued new draft
on FiT rates as follow: For those operated from November/2021 to December/2022, the price is
expected to be 7.02USc/kWh and 8.47USc/kWh for onshore and offshore wind power,
respectively. For those that reach COD in 2023, the price can be 6.81USc/kWh and 8.21USc/kWh.
Although EVN is subjected to disagree, it is continued to push for a FiT deadline extension to
December 31 2023.

• Other potential renewable sources

▪ Waste to energy: There are now 3 waste to energy majorly located in Southern
with the capacity of 10MW. Total potential of waste to energy is 1.5GW.
▪ Biomass: Biomass combined heat and power (CHP) projects are being encouraged
by FiT rate of 7.03 USc/kWh and other forms of biomass energy project will be at
8.47 USc/kWh. At the present, most biomass plants in Vietnam are CHP biomass
projects which are used for self-generation in sugar mills (378MW), others from
husk (170MW) and wood by-product. The total potential of biomass can be up to
13.7 GW.
III. Power Development Plan VIII
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VIETNAM POWER INDSUTRY 2021

The Institute of Energy is now in charge of conducting Power Development Plan VIII – PDP VIII
(Period 2021-2030, vision to 2045) which is planned to be submitted to Prime Minister by Q2-
Q3/2021. There are some key points in this new PDP can be concerned:

• It is recommended to reduce the share of coal power to 34% by 2025, use more LNG
instead and rise the portion of renewable energy to 23% but it is hard to change rapidly
because of economic feasibility.
• The total share of renewable energy can be doubled in 2025 and up to 2030, wind power
capacity can more than 3 times and solar power can be 2 times higher than those in revised
PDP VII.
• There will not be any new coal thermal power plan built in the period of 2026-2030.
Approximately above 17 GW of imported coal fired approved in the adjusted PDP VII will
be pushed back to post 2030 or eliminated.
• High chance of electric deficit leads to change in portion of power import, rising from 1.2%
to 5% in 2030.
• Detailed changes in power source structure can be as below

Power
2025 2030

source
PDP VII PDP VIII PDP VII PDP VIII
Total
capacity 96,50 103,20 100 129,50 138,10 100
(MW) 100% 100%
0 0 % 0 0 %

Coal 47,57 49.3 42.6

35,088 34% 55,167 37,287 27%
power 4.5 % %

Gas 15,05 15.6 14.7

15,480 15% 19,037 26,239 19%
power 4 % %

Hydro 20,36 21.1 16.9

24,768 24% 21,886 24,858 18%
power 1.5 % %
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Renewab 12,06 12.5

23,736 23% 27,195 21% 41,430 30%
le power 2.5 %

1,447
Import 1.5% 4,128 4% 1,554 1.2% 6,905 5%
.5

Nuclear
- - - - 4,662 3.6% - -
power

IV. Project List

✓ List of Projects Definitely Constructed

Capacity Project COD

No. Project name Location
(MW) owner/Status (expected)

1 Dung Quat I Gas Quang Ngai 750 BOT/approved 2026

Combined Turbine to PDP

2 Dung Quat II Gas Quang Ngai 750 EVN/FS 2024

Combined Turbine

3 Dung Quat III Gas Quang Ngai 750 EVN/FS 2025

Combined Turbine

4 Mien Trung I Gas Quang Nam 750 PVPower/FS 2024

Combined Turbine

5 Mien Trung II Gas Quang Nam 750 PVPower/FS 2025

Combined Turbine

6 Quang Tri Gas Quang Tri 340 Approved to 2026

Combined Turbine PDP

7 O Mon III Gas Can Tho 1,050 EVN/ODA 2025

Combined Turbine negotiation
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VIETNAM POWER INDSUTRY 2021

8 O Mon IV Gas Can Tho 1,050 EVN/EPC 2023

Combined Turbine package
preparation

9 O Mon I Gas Can Tho 1,050 BOT/FS 2026

Combined Turbine

10 Na Duong II Coal Lang Son 110 TKV/Fund Q1/2023

Fired Power arrangement

11 An Khanh II Coal Bac Giang 650 IPP/FS June/2023

Fired Power

12 Nam Dinh I Coal Nam Dinh 2x600 BOT Dec/2024

Fired Power &

June/2026

13 Nhon Trach III&IV Dong Nai 1,500 PPA signed 2023-2024

Coal Fired Power

14 Vung Ang II Coal Ha Tinh 2x600 BOT Jan/2025

Fired Power June/2025

15 Quang Trach I Coal Quang Binh 2x600 Under Jan/2024

Fired Power construction June/2024
on Jan/2021

16 Quang Trach II Coal Quang Binh 2x600 FS 2025

Fired Power

17 Van Phong Coal Khanh Hoa 2x660 PPA signed June/2023

Fired Power Jan/2024
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18 Vinh Tan III Coal Binh Thuan 3x660 BOT June/2025

Fired Power negotiation Jan/2026

19 Song Hau II Coal Tra Vinh 2x600 BOT 2025

Fired Power negotiation

✓ List of Top Project by Capacity

No. Project name Project information

1 Hai Phong LNG - Project Owner: Exxon Mobil

Power Plant - Location: Hai Phong
- Capacity: 4,500MW
- Project period: 2026-2030
The project divides into 2 phases:
+ Phase 1 (3units x 750MW)
COD: 2026-2027
+ Phase 2 (3units x 750MW)
COD: 2029-2030
- Total fund: USD 5.09 billion
- Status: At planning stage

2 Mui Ke Ga Gas- - Project Owner: Energy Capital Vietnam (USA) and KOGAS
fired Power (Korea)
Plant - Location: Binh Thuan
- Capacity: 3,200MW
- Project period: 2022-2025
- Total fund: USD 5 billion
- Status: Under proposal to power master plan

3 Nam Dinh 1 - Project Owner: Taekwang Power Holdings - Acwa Power (BOT)
Coal-fired Power - Location: Nam Dinh
Plant - Capacity: 1,200MW (2units x 600MW)
- Project period: 2021-2025
- Funding source: Taekwang-Acwa Power's Owner's Equity (95%)
- Total fund: USD 2 billion
- Status: Pending
This is the last project to be provided coal from Vinacomin.
However, the project is still pending because Vinacomin is now not
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VIETNAM POWER INDSUTRY 2021

guarantee to supply enough coal for the project during the project life
cycle of 25 years

4 Quynh Lap - Location: Nghe An

Power Complex - Construction area: 283 ha
- Capacity: 2,400 (4 units x 600 Mw)
- Project period: Unidentified
The project divides into 2 phases:
+ Phase 1: FS finished in 2017
- Project Owner: Vinacomin
- Funding source: Owner's equity and counterparts' fund (20%) -
Commercial loan (80%)
+ Phase 2: Pre FS is undertaken
- Project owner: Posco Energy (BOT)
The project is still lacking of GGU (Government Guarantee and
Undertaking) which makes the previous investors leave the project
and Vinacomin has to look for new one. The project keeps on
delaying for so long which makes it being under consideration to be
withdraw from PDP VIII (draft) or it may need to change from coal
to gas used.

5 Son My 2 Gas - Project Owner: AES Corporation (BOT)

Combined - Location: Binh Thuan
Turbine Power - Capacity: 2,250MW
Plant - Project period: 2027-2028
- Total fund: USD 1.7 million
- Status: Planning stage

6 Bac Lieu LNG - Project owner: Delta Offshore Energy

Thermal Power - Location: Bac Lieu
Plant - The first
LNG plant in - Capacity: 3,200MW
Vietnam and the - Project period: 2021-2027
biggest FDI one
in Cuu Long The project divides into 2 phases:
Delta River + Phase 1 (750 MW)
COD: 12/2023
+ Phase 2 (2450 MW)
COD: 12/2027
- Construction area: 40ha
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- Total fund: USD 4 billion

- Status:
• PPA contract with EVN is being negotiated
• Pre-FS finished in Jan. 2020
• FS finished in Sep. 2020
• MOU was signed between Bac Lieu People Committee and
investor in Oct. 2020
• FEED finished by the end of 2020

7 Chan May LNG - Project Owner: LNG Chan May JSC (IPP)
Gas Fired Power - Location: Thua Thien Hue
Project - Capacity: 4,000 MW
- Project period: 2021-2028
The project is divided into 2 phases
+ Phase 1 (3units x 800 MW)
COD: 2024-2026
+ Phase 2 (2units x 800 MW)
COD: 2026-2028
- Funding source: USA (60%) – Vietnam (40%)
- Total fund: USD 6 billion
- Status: Planning for construction in 2021