As one of the fastest growing economies in the region, Vietnam has seen its electricity demand grow by 15% per year during the last decade, and is expected to see an average annual growth between 11% and 16% until 2020. Such growth is supported by increasing urbanisation and a young population, with a large workforce able to offer an alternative to Chinese manufacturers with increasing labor costs.
The country already has a large proportion of its electricity mix produced by renewables. Hydropower represents 40% of Vietnam’s total installed capacity, while the installed capacity of non-hydro renewables (e.g. wind and solar) is still negligible, and as yet is limited to a handful of utility scale projects.
Investment in electricity generating assets is currently not keeping pace with the increasing electricity demand. As a result, diesel-based generators are often used in cities and factories subject to blackouts and load shedding, especially during peak hours and the dry season when water levels are low. According to EVN, power shortages may reach over 9 billion kWh in the 21 southern provinces during the 2013 dry season.