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Vietnam Power Report Q3 2008

http://www.companiesandmarkets.com/Summary-Market-Report/vietnam-power-report-q3-2008-51432.asp

Report Summary

The new Vietnam Power Report from BMI forecasts that the country will account for 1.16% of Asia Pacific regional power generation by 2012, with an increasing generation surplus that provides a theoretical export capability. BMI’s Asia Pacific power generation estimate for 2007 is 6,865 terawatt hours (twh), representing an increase of 9.6% over the previous year. We are forecasting an increase in regional generation to 9,370twh by 2012, representing a rise of 36.5%. Asia Pacific thermal power generation in 2007 is estimated by BMI at 5,431twh, accounting for 79.1% of the total electricity supplied in the region.

Our forecast for 2012 is 7,104twh, implying 46.6% growth that reduces the market share of thermal generation to 75.8% – thanks partly to environmental concerns that should be promoting renewables, hydro-electricity and nuclear generation. Vietnam’s thermal generation in 2007 was 33.7twh, or 0.62% of the regional total. By 2012, the country is expected to account for 0.94% of thermal generation. For Vietnam, oil is the dominant fuel, accounting for around 50% of primary energy demand (PED), followed by hydro-power at 20%, coal at 18% and gas with a 12% share of PED. Regional energy demand is forecast to reach 4,830mn tonnes of oil equivalent (toe) by 2012, representing 37.3% growth over the period.

Vietnam’s 2007 market share of 0.45% is set to rise to 0.57% by 2012. Vietnam’s 25.6twh of hydro-electric demand in 2007 is forecast to reach 37.6twh by 2012, with its share of the Asia Pacific hydro market falling from 3.16% to 2.58% over the period. Vietnam is ranked third ahead of Pakistan in BMI’s updated Power Business Environment rating, thanks largely to the growth potential of power consumption and energy demand, plus healthy scores in several other categories. The country is at little risk from Pakistan below it, and probably doesn’t have the potential to catch India above it. BMI is forecasting Vietnamese real GDP growth averaging 8.03% per annum between 2007 and 2012, with the 2008 forecast being 7.00%.

Population is expected to expand from 86.6mn to 92.7mn over the period, with GDP per capita and electricity consumption per capita forecast to increase significantly (by 130% and 26% respectively). The country’s power consumption is expected to increase from an estimated 53twh in 2007 to 72twh by the end of the forecast period, assuming 11.5% annual growth in generating capacity. Between 2007 and 2018, we are forecasting an increase in Vietnamese electricity generation of 156.9%, which is top of the range for the Asia Pacific region. This equates to 33.8% in the 2013-2018 period, down from 74.6% in 2007-2012. PED growth is set to decrease from 30.7% in 2007-2012 to 29.9%, representing 79.1% for the entire forecast period. Hydro generation is expected to rise by 47% between 2007 and 2018, with thermal power generation forecast to increase by 98% over the same period. More detail of the long-term BMI power forecasts can be found in the appendix of this report.

Table of Contents

Executive Summary .........5
SWOT Analysis 7
Vietnam Economic SWOT.......... 7
Vietnam Business Environment SWOT............. 8
Industry Overview ..........9
Global ............ 9
Table: Global Summary .. 9
Asia Pacific Region ............ 10
Table: Asia Pacific Power Generation (twh) . 11
Table: Asia Pacific Thermal Power Generation (twh)......... 12
Table: Asia Pacific Primary Energy Demand (mn toe)........ 13
Table: Asia Pacific Gas Consumption (bcm) . 14
Table: Asia Pacific Coal Consumption (mn toe) . 15
Table: Asia Pacific Nuclear Energy Consumption (twh) ..... 16
Market Overview – Vietnam ........17
Primary Energy Demand ........ 17
Power Generation ........ 18
Power Consumption ..... 19
Regulation/Competition.......... 19
Pricing .... 21
Power Transmission ..... 21
Business Environment Rankings ......23
Asia Pacific Region ............ 23
Power Scores ................ 23
Table: Regional Power Business Environment Rating......... 24
Vietnam Power Rating - Overview................ 25
Vietnam Power Rating – Potential Returns.. 25
Vietnam Power Rating - Risks to Potential Returns .......... 25
Legal Framework ......... 25
Infrastructure ............... 27
Labour Force ............... 28
Foreign Investment Policy...... 30
Tax Regime . 32
Industry Forecast Scenario ........33
Vietnam Power Outlook ..... 33
Generation .. 33
Gas-fired . 33
Oil-fired .. 34
Coal-fired .... 34
Nuclear Energy ............ 34
Hydro-electric .............. 35
Renewable Energy ....... 36
Power Costs . 36
Transmission ................ 36
Table: Vietnam Power – Historic Data & Forecasts ........... 37
Table: Vietnam Power (thermal) – Historic Data & Forecasts ............. 38
Table: Vietnam Power (non-thermal) – Historic Data & Forecasts ...... 39
Table: Vietnam Power (costs) – Historic Data & Forecasts 40
Assumptions and Methodology .... 40
Key Risks to BMI’s Forecast Scenario......... 40
Long-term Power Outlook ...... 40
Economic Outlook..........42
Table: Vietnam - Economic Activity............... 44
Competitive Landscape .........45
Executive Summary ............ 45
EVN – Summary .......... 45
BMI Forecast Modelling .........47
How we generate our industry forecasts ............. 47
Power Industry .. 48
Cross checks 48
Sources ........ 48
Power Outlook: Long-term forecasts ...........49
Global Snapshot 49
Global Power Forecasts .......... 49
Regional Outlook ............... 49
Asia Pacific Electricity Generation (twh) ...... 50
Asia Pacific Primary Energy Demand (mn toe) .. 51
Asia Pacific Thermal Power Generation (twh) ... 52
Asia Pacific Hydro-electric Generation (twh) 53
Asia Pacific Nuclear Generation (twh) .......... 54
Vietnam Country Overview 54
Methodology & Risks To Forecasts ... 54
Country Snapshot: Thailand Demographic Data ..........56
Section 1: Population: ....... 56
Table: Demographic Indicators (2005) ......... 56
Table: Rural/Urban Breakdown ... 57
Section 2: Education & Healthcare ... 58
Table: Education .......... 58
Table: Healthcare: Vital Statistics 58
Table: Healthcare: Expenditure ... 59
Section 3: Labour Market And Spending Power . 60
Table: Employment Indicators. 60
Table: Consumption and Stratification .......... 61
Table: Wages per year .. 62