Officials in Vietnam have asked Apple supplier Foxconn, among other manufacturers in northern Vietnam, to voluntarily reduce their power use by 30 percent, according to documents seen by Reuters. This is after power shortages last summer cost Vietnam’s economy about US$1.4 billion, according to World Bank estimates.
Promoting power conservation is not a new concept. This happens just about everywhere in the world. That said, what should be concerning is the volume of power Foxconn is being asked to cut. Whereas a firm might be able to save a few kilowatts here or there, it would be very unusual for a firm to be operating with an inefficiency in their power use of 30 percent.
That said, perhaps more importantly, this also sheds some light on the scale of the electricity shortage the authorities are expecting this summer (despite public comments to the contrary).
Of note, When it comes to electricity in Vietnam, whether a company is using it or producing it, there are a lot of nuances that foreign investors should be aware of. This cheat sheet runs through a brief overview of how the industry and the market operate: Electricity in Vietnam: Foreign Investor Cheat Sheet 2024