Vietnam eyes more coal plants as Iran war complicates LNG plans

Vietnam is contemplating an increase in coal-fired power generation to bolster its energy security, a move prompted by disruptions to liquefied natural gas (LNG) supplies linked to the ongoing conflict in the Middle East. The Southeast Asian nation, a manufacturing powerhouse, is striving to expand its power capacity to fuel its rapidly growing economy.

Government statements indicate that recent conflicts in the Middle East have "impacted the security of LNG supplies, creating a need to strengthen energy security." Consequently, Vietnam may revise its national power development plan to incorporate more coal-based energy. This comes as the country has struggled to meet its ambitious target of establishing 22.5 gigawatts of LNG-fired power plants by 2030, having achieved only about 7.3% of this goal due to regulatory challenges and a lack of investor interest.

Under its current power plan, Vietnam aims for a total installed capacity between 183 and 236 GW by 2030. Coal-fired power plants are projected to constitute 13.1% to 16.9% of this mix, while LNG is expected to account for 9.5% to 12.3%. Data from state utility EVN shows that electricity output in the first half of this year increased by 9.8% year-on-year to 171.5 billion kilowatt hours, with coal power plants supplying 54.5% of this total.

The potential shift back towards coal highlights the complex energy security challenges faced by developing economies. While Vietnam has expressed a commitment to renewables and LNG, the practicalities of securing stable and affordable energy supplies, especially in the face of geopolitical instability, are forcing a re-evaluation of its energy strategy.

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In recent times, the unfolding conflicts in the Middle East have impacted the security of LNG supplies, creating a need to strengthen energy security.