Vietnam

Vietnam has become a key player in manufacturing sectors in Southeast Asia, leading to a rapidly growing economy. This, in addition to a burgeoning population, has led to a significant increase in energy demand. Currently, coal, oil and gas dominate the primary energy supply in Vietnam, accounting for over 80% of the energy mix. As a result, greenhouse gas emissions in Vietnam are growing at one of the fastest rates in the world and the country is among the most exposed to climate change impacts.

Vietnam has committed to reaching net zero by 2050 and to phasing out unabated coal in the 2040s. This commitment was fleshed out with the adoption of the National Climate Change Strategy to 2050 and reinforced through the Just Energy Transition Partnership (JETP) that Vietnam signed with the G7 countries plus Norway and Denmark. The international donor community will specifically support Vietnam in accelerating its plans to phase out coal and scale up renewables by 2030. If the partnership meets its goals, Vietnam will peak its greenhouse gas emissions by 2030 instead of 2035 and reduce its annual power sector emissions by 30% by significantly increasing its reliance on solar and wind for power generation.

These commitments put the country back on track to becoming Southeast Asia’s renewable energy champion, after a significant growth of solar PV in recent years. However, the integration of substantial additional amounts of variable renewable energy remains a key concern as grid investments have not kept pace with expanded generation capacities. In addition, regulatory and power market structures need to be adapted to operate the power system more flexibly and avoid renewables curtailment. Achieving an energy transformation that is socially acceptable and economically sustainable will be one of the main challenges for the Vietnamese government.

With its partners in Vietnam, Agora Energiewende seeks to support the transformation of Vietnam’s energy system through technical, economic and policy assessments exploring the different options for sustainable system development. Particular focus is given to long-term energy roadmaps, power market design to incentivise flexibility, as well as instruments to foster the development of renewables and energy efficiency.