VIETNAM Hanoi sells electric cars but maxes out coal-fired power plants

To respond to the increase in consumption, the Vietnamese government has announced record operating hours for coal plants, which still account for 48.7% of the country’s total energy production. Meanwhile, the electric vehicle business continues to grow. Local manufacturer VinFast signs partnerships and conquers market shares.

Hanoi () – The Hanoi government today announced its decision to operate coal-fired power plants throughout the country at maximum levels next year to try to meet growing energy demand. Sources close to the communist Executive affirm that most coal plants will operate between 6,400 and 6,500 hours over 12 months, and electricity consumption is expected to grow between 11% and 14% in 2025.

Over the years, Vietnam, a manufacturing hub of Southeast Asia and the Asia-Pacific region, has sought to increase the use of renewable energy sources. However, regulatory obstacles remain that, over time, have jeopardized the objectives of offshore wind energy and the extraction of liquefied natural gas (LNG), while coal retains a leading role in meeting energy needs. .

Coal-fired power plants still account for 48.7% of Vietnam’s total electricity production, which amounted to 256.7 billion kilowatt hours in the first 10 months of 2024, according to data from the state-owned Vietnam Electricity Group (EVN). “The mobilization rate of coal-fired power plants – the government announced – will continue to be high, especially in the northern zone.” That is why coal-fired power plants will have to be prepared before the end of the year with plans to supply raw materials to run the turbines.

The conversion process to renewable energy is still in its infancy in the Southeast Asian region, and the race for “green” energy is insufficient to meet domestic demand that has doubled in less than a decade. In some ways this situation is similar to that seen in Hanoi’s “big brother”, China, which is also caught between the promises of sustainable development and an energy system that has not yet been stabilized, with all the problems critical to balancing energy supply and demand. Climate change, on the other hand, adds additional difficulty to the performance of the electrical grid and the management of energy peaks. Indeed, in May of last year several industrial areas in the north began to suffer a series of unprecedented power outages.

The increasing and forced use of coal runs counter to Hanoi’s objectives in the electric car sector, an expanding business for the country. The global rise of electric vehicles presents numerous opportunities for the Vietnamese economy, which is supported by leading technology providers such as the Bühler Group. Nearly 14 million battery electric vehicles (EVs) were sold last year, an increase of 35% compared to 2022, according to a report from the International Energy Agency (IEA). This increase brought the global number of electric vehicles on the road to 40 million, despite global economic and political instability and the overall slowdown in the automobile market.

According to IEA forecasts, electric vehicles will account for half of all car sales in 2035, thanks to evolving consumer preferences and government policies that promote the transition to green mobility. The burgeoning potential of the electric vehicle market is a catalyst for the sector’s expansion, attracting both established operators and start-ups, notably Chinese automaker BYD, which controls 20% of the global electric vehicle market. Together with the leader Tesla, VinFast, Vietnam’s leading electric vehicle manufacturer, is increasingly acquiring market shares.

At the end of October, VinFast signed a series of contracts under which it should receive at least $1 billion in foreign funding, led by the Emirates Driving Company (EDC), Abu Dhabi’s main institute for driver and safety training. vial. According to Bloomberg, VinFast itself and its parent company, Vingroup, signed strategic partnerships with Middle Eastern companies during the official visit of Vietnamese Prime Minister Pham Minh Chinh to the United Arab Emirates (UAE). The MoUs concern strategic areas including collaboration in the electric vehicle and green transport sector, as well as maritime development and shipyard construction capabilities, sustainable use of coastal territory and digital transformation.