Fossil Gas and Energy Transition in Vietnam’s PDP8

Statement from Southeast Asian civil society

Center for Energy, Ecology, and Development | EarthRights International | Greenpeace Thailand | KRuHA | Trend Asia

Following a two-year delay, Vietnam’s eighth power development plan was approved on May 15. Prior to its approval, the eagerly anticipated PDP8 for 2021 to 2030 was hailed as a plan that would outline a shift in energy directions for Vietnam. The final output boasts of a focus on reducing coal use while ensuring energy security through renewables and ‘new energy.’
The success of the clean energy advocacy in Vietnam and the region and increasingly favorable conditions for renewables globally comes to light in the PDP8 with its promotion of “accelerating the development of power sources from renewable energy, continuing to increase the proportion of renewable energy in the structure of power sources and production power.” The plan projects total hydropower, wind, and solar power to rise to over 70 GW by 2030, up from only 17 GW in 2020 and an improvement from the 45.8 GW 2030 target of the revised PDP7. More development for battery storage is also underway.
This projected increase in capacity, however, amounts to a lackluster target of only 30.9% to 39% renewable energy share by 2030. This is even less than the share of renewables 10 years ago in 2013 of over 44%.
In limiting its renewable energy target, PDP8 paves the way for the further entry of detrimental energy. In fact, Vietnam leaves no room for doubt that it intends to preserve reliance on fossil fuels well beyond 2030.
Despite increasingly apparent climate imperatives of phasing out coal, Vietnam anticipates 4.3 GW of new coal capacity to come online by 2030, retaining a share of 20% in the total national installed capacity. Vietnam’s resistance against moving away from coal proves true with its promotion of co-generation and fuel conversion for coal-fired power plants reaching 20 years of operation plants with ammonia and biomass. The same option is afforded even to old plants due for decommissioning for as long as retrofitting is still possible.
A significant cause for alarm, moreover, is the plan to expand its use of another fossil fuel – fossil gas. By 2030, domestic gas and imported LNG will make up 24.8% of Vietnam’s power mix at 37.33 GW. LNG would see a meteoric rise from 0% today to 14.9% by the end of the decade. By 2050, at least 7.9 GW of domestic gas or LNG is expected to be retained, with the rest having converted to hydrogen.
With its new power development plan, Vietnam is wasting an opportunity to exhibit climate and clean energy leadership in Southeast Asia – a matter which it proved it had can do with its unprecedented deployment of solar and wind power at the start of this decade, reaching a capacity of over 22 GW. Instead of focusing on necessary grid and policy improvements and devoting financial, technical, and other resources to the integration of renewables for a 100% shift, Vietnam instead commits a still substantial role for coal and fossil gas over the next decades. It also rejects a genuine energy transition by promoting ammonia and hydrogen, whose production remains highly greenhouse gas emitting and costly today, such that even the recent G7 communique acknowledged that their use must be considered primarily only for hard-to-abate sectors. In relying on ammonia and hydrogen as future transition fuels, Vietnam is pursuing an expensive endeavor that will not truly fuel its decarbonization.
Today, Vietnam is already the biggest driver of fossil gas expansion in Southeast Asia. At 76.9 GW from 31 power plants, it accounts for nearly half of the total pipeline in the region. PDP8 serves to embolden developers behind these gas projects who are blatantly condemning climate-vulnerable peoples in Vietnam and SEA more catastrophic climate change, and the country itself to volatilities in the global fossil fuel market.
PDP8 projects that renewable energy share can reach 47% by 2030, but this already unambitious target is still contingent upon the implementation of the Just Energy Transition Partnership (JETP) and the delivery of climate commitments by international partners. Rather than treating such as the basis for a do or don’t approach to renewables, we urge Vietnam to instead seize the opportunity of actively shaping the JETPs and climate pledges from international actors to benefit its people and meet climate imperatives. Vietnam, and all other Southeast Asian nations, must put forward ambitious renewable energy transition plans, and hold the JETPs at the highest standard of 1.5°C alignment. It is crucial that JETPs and historically polluting nations prioritize the delivery of finance and necessary capacities towards a genuinely just energy transition and holistic approach to sustainability issues, including social and environmental issues, for Vietnam and Southeast Asia.
At the same time, we call on international and domestic financiers and developers behind the LNG build-out in Vietnam, including companies and financiers from the US, Japan, Thailand, EU, and Russia, to stop blocking the country’s energy transition. Their push for gas must instead be diverted to the massive deployment and integration of renewables. Vietnam has a tremendous potential to leap towards an energy transition by harnessing its abundant renewable energy potential and taking a firm stance for a fossil fuel phase-out.