Vietnam Power Report Q4 2009 (Business Monitor International)

The new Vietnam Power Report forecasts that the country will account for 1.31% of Asia Pacific regional power generation by 2013, with the risk of power shortages if generation expansion falls below the required level. The report’s Asia Pacific power generation assumption for 2008 is 7,116 terawatt hours (TWh), representing an increase of 3.2% over the previous year. We are forecasting an increase in regional generation to 9,149TWh by 2013, representing a rise of 28.6%.

Thermal power generation in 2008 totalled an estimated 5,590TWh, accounting for 78.6% of the total electricity supplied in the Asia Pacific region. Our forecast for 2013 is 7,046TWh, implying 26.0% growth that reduces the market share of thermal generation to 77.0%. This is thanks largely to environmental concerns promoting renewable sources, hydro-electricity and nuclear generation.

Vietnam’s thermal generation in 2008 was an estimated 38.9TWh, or 0.70% of the regional total. By 2013, the country is expected to account for 1.04% of thermal generation in the region.

For Vietnam, oil is the dominant fuel, accounting for an estimated 44% of primary energy demand (PED), followed by gas at 18%, coal at 17% and hydro-power with a 17% share of PED. Regional energy demand is forecast to reach 4,862mn tonnes of oil equivalent (toe) by 2013, representing 25.1% growth from the 2008 level. Vietnam’s estimated 2008 market share of 0.50% is set to rise to 0.61% by 2013.

Vietnam’s estimated 28.6TWh of hydro-electric demand in 2008 is forecast to reach 42.0TWh by 2013, with its share of the Asia Pacific hydro market falling from 3.22% to 3.10% over the period.

Vietnam is ranked fifth, just behind India in the Power Business Environment rating, thanks largely to the growth potential of power consumption and energy demand, plus healthy scores in several other categories. It is at little risk from Indonesia below, and may have long-term potential to challenge India.

BMI forecasts Vietnamese real GDP growth to average 6.5% per annum (pa) between 2009 and 2013, with a 2009 estimate of 4.50%. The population is expected to expand from 86.8mn to 92.8mn to 2013, with per capita GDP and electricity consumption set to increase 66%. Power consumption is expected to increase from an estimated 58TWh in 2008 to 102TWh in 2013, providing a slight theoretical supply surplus if generation grows at no less than our assumed annual rate of 11.6%. There is, however, a real risk of electricity shortages if the power industry cannot deliver adequate new capacity as demand soars.

Between 2008 and 2018, we are forecasting an increase in Vietnamese electricity generation of 143.6%, which is top of the range for the Asia Pacific region. This equates to 44.1% in the 2013-2018 period, down from 69.1% in 2008-2013. PED growth is set to decrease from 51.7% in 2008-2013 to 39.5%, representing 111.7% for the entire forecast period. Hydro generation is expected to rise by 138% between 2008 and 2018, with thermal power generation forecast to increase by 148% over the same period. More detailed long-term power forecasts can be found later in this report.