High coal prices put Vietnam’s power supply under strain

high coal prices put vietnams power supply under strain

Vietnam faces an increasing risk of electricity shortfall as soaring coal prices, the country’s primary energy source, force power plants to reduce output as progress remains slow on pursuing alternatives.

The Vietnamese authorities have urged people to conserve electricity ahead of an anticipated spike in demand during a time of year when conditions are often dry and hot in northern Vietnam, which includes the capital of the nation, Hanoi. An uncertain power supply also poses a problem for an economy recovering from the COVID-19 pandemic.

The Southeast Asian country is heavily reliant on coal, which is generally cheaper and more readily accessible than other energy sources. The country generated about half of its electricity from coal in 2020, with an additional 30% or so supplied by hydropower, followed by 14% from natural gas and non-hydroelectric renewable sources, which made up the remaining 5%.

But both foreign and domestic coal has become more challenging to secure over the past few months. A rise in coronavirus cases during February and March, primarily in northern Vietnam, has resulted in a steep drop-off in coal mining. Also, Russia’s invasion of Ukraine has caused the prices of imported coals to jump up.

In November 2022, Vietnam set a goal of achieving net-zero carbon emissions by 2050, congruent with many advanced economies. But the Vietnamese government has yet to draw a path for reducing Vietnam’s dependence on coal.