{"id":8170,"date":"2022-06-22T05:16:34","date_gmt":"2022-06-22T05:16:34","guid":{"rendered":"https:\/\/energytracker.asia\/?p=8170"},"modified":"2022-06-22T05:16:39","modified_gmt":"2022-06-22T05:16:39","slug":"the-proposed-vietnam-pdp8-update-and-the-risks-from-the-coal-pivot","status":"publish","type":"post","link":"https:\/\/energytracker.asia\/the-proposed-vietnam-pdp8-update-and-the-risks-from-the-coal-pivot\/","title":{"rendered":"The Proposed Vietnam PDP8 Update and the Risks From the Coal Pivot"},"content":{"rendered":"
<\/div>\n

As far as success stories go, Vietnam\u2019s renewable energy leaps are one of the globes foremost examples. The 100-fold increase in solar power capacity<\/a> the country achieved in just two years ranked it amongst the top markets globally. However, in the proposed update of its PDP 8 policy, recent political developments in Vietnam could derail progress. The new PDP8 update revealed concerning plans that may see fossil fuels eat into Vietnam’s renewable energy gains.<\/p>\n\n\n\n

Vietnam\u2019s Power Development Plan 8 (PDP 8) and the Proposed Update<\/strong><\/h2>\n\n\n\n

Last year, in February 2021, the Ministry of Industry and Trade of Vietnam (MOIT) released the first draft proposal<\/a> for the national power development plan 9 (PDP8) for public comment. The plan listed various potential scenarios for energy development, including an increased focus on renewables.<\/p>\n\n\n\n

In a nutshell, Vietnam’s PDP8 plan proposed<\/a> 19-20 GW of solar and 18-19 GW of wind. But additionally included 22 GW of gas and 37 GW of coal-fired capacity by 2030.<\/p>\n\n\n\n

\"Scenarios
Scenarios Under the Initial Vietnam PDP8 Draft. Source: Watson Farley & Williams<\/a><\/em><\/figcaption><\/figure><\/div>\n\n\n\n

However, there are concerns. Coal and gas-fired power look set to continue to play a prominent role in Vietnam\u2019s energy mix. \u201cPDP8\u2019s usefulness as a roadmap will be limited due to the rapid pace of [renewable] energy transition globally<\/a>,\u201d said The Institute for Energy Economics and Analysis<\/a> (IEEFA).<\/p>\n\n\n\n

Vietnam\u2019s plans to sacrifice renewables for coal further worsen its net-zero progress and ambition. The latest PDP8 policy draft, as of September 2021, proposes to raise coal-fired powers capacity<\/a> by 3 GW by 2030. This would see a further 10 GW installed by 2035. The plan sacrifices 8 GW of renewables<\/a> in a pivot back to coal. Worryingly, offshore wind is completely removed from the base case scenario.<\/p>\n\n\n\n

Clean energy advocates would see the recent proposal is a step backward. How the authorities in charge of Vietnam’s power plant and energy development came to theses decision is confusing at best.<\/p>\n\n\n\n

\"Proposed
Proposed PDP 8 Update from Vietnam\u2019s PDP8 Signals Policy Confusion About the Economics of Coal<\/em>. Source: IEEFA<\/a><\/figcaption><\/figure><\/div>\n\n\n\n

The Risks for Vietnam’s PDP 8<\/strong><\/h2>\n\n\n\n

Pursuing the plans proposed in the Vietnam PDP8 policy highlights risks on several fronts.<\/p>\n\n\n\n

The<\/strong> Lack of Financing for New Coal Projects<\/strong><\/h3>\n\n\n\n

In 2019, China, Japan, and South Korea accounted for about 80% of the new coal plant finance<\/a> for construction globally. Vietnam was and continues to be among the leading recipients of that funding<\/a>. However, due to heavy public criticism, Japan and South Korea announced their halt to overseas coal financing. <\/a><\/p>\n\n\n\n

\"Vietnam
Vietnam Coal Financing – Closed or Ongoing Projects from Global Coal Public Finance Tracker.<\/em> Source: Global Energy Monitor<\/a><\/figcaption><\/figure><\/div>\n\n\n\n

This left China as the sole hope for nations, Vietnam included, looking for international coal-fired power plant financing. But in a twist of events, at the UN\u2019s General Assembly in September 2021, China announced its intention to cease its funding of overseas coal projects<\/a>. <\/p>\n\n\n\n

With China\u2019s withdrawal as a lender, the future of several high-profile projects in Vietnam<\/a> is now in limbo. These projects – Nam Dinh 1, Song Hau 2, An Khanh Bac Giang, Cong Thanh, and Vinh Tan 3 – were all given pre-investment phase backing from Chinese financing before the latest announcement. <\/p>\n\n\n\n

According to The Saigon Times<\/em>, another 18 planned coal-fired power plants – with a total capacity of 20.4 GW – listed in the PDP8 draft are unlikely to access funding<\/a> for development.<\/p>\n\n\n\n

\"Vietnam's
Vietnam’s Coal Power Plants Bank on Bilateral Support from Vietnam\u2019s PDP8 Signals Policy Confusion About the Economics of Coal<\/em>. Source: IEEFA<\/a><\/figcaption><\/figure><\/div>\n\n\n\n

Missing Out on Clean Energy Funds<\/strong><\/h3>\n\n\n\n

Today, Vietnam is the leading renewable energy market in Southeast Asia<\/a>. If it remains on this trajectory, Vietnam positions itself to benefit from an influx of green capital in the coming decades.<\/p>\n\n\n\n

A cohort of international financing programmes that are already supporting decarbonisation could look toward Vietnam. This includes the Japanese government<\/a>, climate funds<\/a>, and other joint philanthropist and banking initiatives<\/a>.<\/p>\n\n\n\n

These events suggest that a transition toward a green economy<\/a> will open up a USD 1 trillion opportunity for Southeast Asia by 2030. <\/p>\n\n\n\n

However, the PDP8 policy will put Vietnam into an unfavourable position with established clean energy sponsors. Additionally, it will further distance Vietnam from the swelling pool of sustainable finance<\/a>. In effect this would prevent it from scaling up renewable energy grids to generate reliable and affordable electricity.<\/p>\n\n\n\n

Climate Impact and Negative Effect on the Country\u2019s Public Image<\/strong><\/h3>\n\n\n\n

The newly proposed changes to Vietnam’s PDP8 come despite the warnings from the IPCC sixth assessment report<\/a>. This is especially relevant for Southeast Asia<\/a>, as it is one of the most climate vulnerable regions globally.<\/p>\n\n\n\n

The reversal toward coal moves against the interests of Vietnam\u2019s dynamic economy, which is highly exposed to global investment and consumer markets. In a world racing to decarbonise, such action also undermines the country\u2019s credibility for investors and the public.<\/p>\n\n\n\n

\"Map
Map of Global Climate Risk. Source: NBS Policy Platform<\/a><\/em><\/figcaption><\/figure><\/div>\n\n\n\n

Vietnam\u2019s Power Plants and Its Renewable Energy Progress<\/strong><\/h2>\n\n\n\n

Vietnam has already established itself as a nation with one of the most remarkable strides<\/a> towards renewable energy adoption. However, the proposed updates to the PDP8 policy risk tarnishing this progress. The spotlight now remains on Vietnam’s officials to change course on its energy policy. A return or emphasis on fossil fuels will no doubt raise uncomfortable questions from the international community. Fortunately, there is still time for Vietnam’s PDP8 to set the record straight and steer it toward a cleaner direction.<\/p>\n\n\n\n

\"PDP8<\/figure><\/div>\n","protected":false},"excerpt":{"rendered":"

The recently proposed update to the Vietnam PDP8 draft risks deteriorating the country’s clean energy progress. Experts are united around the idea that the drafted coal pivot will surface various negatives, including lack of financing, slower clean energy transition, increased climate impact, and increased reputational risk for the country.<\/p>\n","protected":false},"author":14,"featured_media":8202,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[87,365],"tags":[282,173,153],"hashtags":[],"class_list":["post-8170","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-renewable-energy","category-vietnam","tag-clean-energy","tag-renewable-energy","tag-vietnam"],"acf":{"custom_author_name":"","article_pdf_file":{"ID":8210,"id":8210,"title":"The Proposed Vietnam PDP8 Update and the Risks From the Coal Pivot","filename":"The-Proposed-Vietnam-PDP8-Update-and-the-Risks-From-the-Coal-Pivot.pdf","filesize":971545,"url":"https:\/\/energytracker.asia\/wp-content\/uploads\/2021\/10\/The-Proposed-Vietnam-PDP8-Update-and-the-Risks-From-the-Coal-Pivot.pdf","link":"https:\/\/energytracker.asia\/the-proposed-vietnam-pdp8-update-and-the-risks-from-the-coal-pivot\/the-proposed-vietnam-pdp8-update-and-the-risks-from-the-coal-pivot\/","alt":"","author":"14","description":"","caption":"The Proposed Vietnam PDP8 Update and the Risks From the Coal Pivot","name":"the-proposed-vietnam-pdp8-update-and-the-risks-from-the-coal-pivot","status":"inherit","uploaded_to":8170,"date":"2021-10-07 13:10:38","modified":"2021-10-07 13:10:45","menu_order":0,"mime_type":"application\/pdf","type":"application","subtype":"pdf","icon":"https:\/\/energytracker.asia\/wp-includes\/images\/media\/document.png"},"poll_vote":0,"short_desc":"The recently proposed update to the Vietnam PDP8 draft risks deteriorating the country's clean energy progress. Experts are united around the idea that the drafted coal pivot will surface various negatives, including lack of financing, slower clean energy transition, increased climate impact, and increased reputational risk for the country."},"_links":{"self":[{"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/posts\/8170","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/comments?post=8170"}],"version-history":[{"count":0,"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/posts\/8170\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/media\/8202"}],"wp:attachment":[{"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/media?parent=8170"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/categories?post=8170"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/tags?post=8170"},{"taxonomy":"hashtags","embeddable":true,"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/hashtags?post=8170"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}