Vietnam’s Coal Power Industry: Overview 2024

Vietnam’s coal power industry remains a dominant source of energy, accounting for nearly half of the country’s electricity generation. The rapid economic growth and industrialisation over the past two decades have led to a significant increase in energy demand, making coal a reliable and affordable option to meet these needs. 

The country has invested heavily in expanding its coal-fired power capacity, with numerous plants built in recent years and several more under construction. The reliance on coal is largely driven by its domestic availability and established infrastructure, making it a critical component of Vietnam’s energy security and economic development.

However, the heavy dependence on coal has raised environmental and health concerns. Coal-fired power plants are a major source of air pollution and greenhouse gas emissions, contributing to climate change and impacting public health. 

As Vietnam faces increasing pressure to meet its international commitments to reduce carbon emissions, the sustainability of its coal-dependent energy strategy has come under scrutiny. Despite these concerns, the government continues to support coal power development, viewing it as essential for maintaining energy stability and supporting industrial growth.

Looking forward, Vietnam’s coal power sector is at a crossroads. The government has expressed intentions to gradually reduce reliance on coal by promoting cleaner energy sources such as natural gas and renewables. 

However, transitioning away from coal will require significant investment in alternative energy infrastructure, regulatory reforms, and the development of a comprehensive energy strategy that balances economic growth with environmental sustainability. The future of the coal industry in Vietnam will largely depend on how effectively these challenges are addressed, along with the availability of international support and financing for cleaner energy initiatives.

Coal in Vietnam in numbers

There are a range of key data points tracked by various ministries in Vietnam with respect to coal production and consumption. These can be useful in understanding how coal fits into Vietnam’s economy beyond simply a means of power production.

Coal power in Vietnam’s energy mix

Vietnam’s state power provider Electricity Vietnam has reported total electricity produced and imported in September 2024 to 24.56 billion kilowatt hours. This brings the total electricity produced and imported for the first nine months of the year to 232.1 billion kilowatt hours, reflecting a 10.9 percent increase over the same period in 2023.

The bulk of this power has been produced by burning coal which accounted for 49.6 percent of Vietnam’s electricity supply in the third quarter of the year, though notably this was down from about 57 percent in the first half of the year.

Coal production in Vietnam

Vietnam’s coal and lignite mining industry experienced a mixed performance in October 2024, according to Vietnam’s industrial production index. The month-over-month data reflects a substantial 36.3 percent increase in output, demonstrating a significant short-term recovery in the sector compared to September. This surge could be attributed to seasonal factors, operational adjustments, or a response to increased short-term demand.

However, the year-on-year comparison reveals a different story. When measured against October 2023, the sector’s production has dipped by 7.7 percent, continuing a downward trend that highlights the industry’s ongoing challenges. Additionally, the cumulative data from January to October 2024 shows a decline of 5.9 percent compared to the same period last year. This suggests that, despite a strong monthly recovery, the sector faces enduring issues.

See also: Vietnam’s Coal Power Industry: Overview 

International coal trade in Vietnam

Vietnam’s position in the international coal trade is unique, as it plays both an importer and exporter role, influenced by its rapidly growing energy needs and economic ambitions. 

Vietnam coal imports, October vs. September 2024, US$

Source: Vietnam Imports Tracker

Vietnam’s coal exports, October vs. September 2024, US$

Source: Vietnam Exports Tracker

Revenue listed Vietnam coal suppliers

Listed coal suppliers in Vietnam, primarily engaged in mining and distribution, play a critical role in supporting the country’s energy needs. These companies generate significant revenue, driven by both domestic demand and Vietnam’s growing role in the international coal trade. 

Revenue, select listed Vietnam coal companies, 2020-2023, US$millions

Revenue, select listed Vietnam coal companies, Q3 2024-Q3 2024, US$millions

Coal power policies in Vietnam

Vietnam’s coal power policies are primarily focused on meeting the country’s growing energy demand while balancing economic development and environmental concerns. The government’s approach to coal power is outlined in several key policy documents and plans, which include the following elements:

National Power Development Plan (PDP VIII)

The National Power Development Plan (PDP VIII) sets the strategic direction for the country’s energy sector, including coal power. While it acknowledges the need to reduce coal dependency over time, the plan still envisions coal-fired power as a major contributor to the energy mix through 2030. The plan includes provisions for improving the efficiency of existing coal plants and gradually shifting to cleaner energy sources.

Emission Standards and Environmental Regulations

Vietnam has implemented stricter emission standards for coal-fired power plants to mitigate environmental impacts. Regulations require new and existing plants to adopt advanced technologies to reduce air pollution, such as flue gas desulfurization and low-NOx burners. Compliance with these standards is essential for the continued operation and development of coal power projects.

Investment and Development Policies

The government continues to encourage investment in coal power projects to ensure a stable and reliable energy supply. This includes approving the construction of new coal plants and supporting upgrades to existing facilities. Foreign and domestic investors are offered incentives, such as favourable lending conditions and tax benefits, to develop coal power infrastructure.

Transition and Diversification Policies

Recognising the long-term need to reduce reliance on coal, the government is promoting the diversification of the energy mix through increased use of natural gas and renewable energy sources. Policies aim to gradually phase out coal power in favour of cleaner options, although this transition is expected to be gradual due to the high costs and infrastructure challenges associated with shifting to alternative energy sources.

These policies reflect the complex balancing act that Vietnam faces in managing its energy needs, economic growth, and environmental responsibilities. While coal power remains a cornerstone of the country’s energy strategy, there is a growing emphasis on developing a more sustainable and diversified energy portfolio in the coming decades.

Domestic coal power companies in Vietnam

These domestic coal power companies are central to Vietnam’s energy infrastructure, providing a substantial portion of the country’s electricity needs.

Vietnam Electricity (EVN)

Vietnam Electricity (EVN) is the state-owned utility and the largest player in the country’s coal power sector. It owns and operates numerous coal-fired power plants across Vietnam, contributing significantly to the national grid. EVN is responsible for managing the development, construction, and operation of new coal power projects, as well as maintaining existing facilities. Its dominance in the industry reflects the government’s reliance on coal as a primary energy source.

Vinacomin – Power Holding Corporation (Vinacomin Power)

Vinacomin Power, a subsidiary of the Vietnam National Coal and Mineral Industries Group (Vinacomin), is another key player in the coal power industry. It operates several large coal-fired power plants, including Cam Pha and Na Duong, and focuses on utilising domestic coal resources to generate electricity. Vinacomin Power is also involved in the development of new coal power projects to support the growing energy demand.

PetroVietnam Power Corporation (PV Power)

Although primarily known for its involvement in gas and hydro power, PV Power, a subsidiary of PetroVietnam, also operates several coal-fired power plants, such as the Vung Ang 1 plant in Ha Tinh province. PV Power’s participation in the coal sector is part of its diversified energy portfolio, contributing to the overall stability and capacity of the national grid.

Thai Binh Thermal Power Joint Stock Company

This company, under EVN, is responsible for operating the Thai Binh coal-fired power plants in the northern region of Vietnam. The Thai Binh complex is a significant contributor to the regional electricity supply and plays a crucial role in meeting the energy needs of the densely populated Red River Delta area.

Quang Ninh Thermal Power Joint Stock Company

Quang Ninh Thermal Power, another subsidiary of EVN, operates the Quang Ninh coal-fired power plants. Located in the northern province of Quang Ninh, a major coal mining area, these plants are among the largest coal power generators in the country, utilising local coal resources to supply electricity to the national grid.

Foreign coal power companies in Vietnam

These foreign companies play a significant role in Vietnam’s coal power industry by providing investment, technology, and expertise. 

KEPCO (South Korea)

Korea Electric Power Corporation (KEPCO) is a major player in Vietnam’s coal power sector. The company has partnered with local entities to develop and operate several coal-fired power plants, including the Nghi Son 2 plant in Thanh Hoa province. This project is a joint venture with Japanese and Vietnamese partners and has a capacity of 1,200 MW, supplying significant power to the national grid.

Mitsubishi Corporation (Japan)

Mitsubishi Corporation is actively involved in Vietnam’s coal power industry through its investment in several coal-fired power projects. One of its key projects is the Vung Ang 2 coal power plant in Ha Tinh province, a 1,200 MW facility being developed in partnership with other Japanese and Vietnamese stakeholders. Mitsubishi’s involvement highlights its long-term commitment to supporting Vietnam’s energy needs despite global pressure to reduce coal investments.

Marubeni Corporation (Japan)

Marubeni Corporation, another Japanese multinational, has a significant presence in Vietnam’s coal power sector. It is a co-developer of the Nghi Son 2 coal power plant along with KEPCO. Marubeni’s participation in coal power projects in Vietnam reflects its strategic focus on energy infrastructure development in Southeast Asia, even as the company shifts towards renewable energy investments globally.

Sumitomo Corporation (Japan)

Sumitomo Corporation has been involved in several coal power projects in Vietnam, most notably the Van Phong 1 coal-fired power plant in Khanh Hoa province. With a capacity of 1,320 MW, this plant is one of the largest foreign-invested coal power projects in the country. Sumitomo’s involvement in Vietnam’s energy sector underscores its role in supporting the country’s industrial and economic growth.

CLP Holdings (Hong Kong)

CLP Holdings, a Hong Kong-based utility company, has investments in the Vinh Tan 3 coal power project in Binh Thuan province. This project, part of a larger complex of coal-fired power plants, aims to provide substantial power generation capacity to support southern Vietnam’s growing electricity demand. CLP’s participation in Vietnam’s coal power sector demonstrates its regional energy investment strategy.

Coal power projects currently underway in Vietnam

Several significant coal power projects are currently underway in Vietnam, reflecting the country’s ongoing commitment to expanding its coal-fired power generation capacity despite environmental concerns. Key projects include:

Van Phong 1 Coal Power Plant

Developed by Sumitomo Corporation, the Van Phong 1 coal-fired power plant is located in Khanh Hoa province and is one of the largest foreign-invested energy projects in Vietnam. The plant, with a capacity of 1,320 MW, is expected to begin operations in 2025. It aims to provide a stable electricity supply to support the economic growth of the southern region.

Vung Ang 2 Coal Power Plant

The Vung Ang 2 plant, located in Ha Tinh province, is being developed by a consortium that includes Mitsubishi Corporation and KEPCO. With a planned capacity of 1,200 MW, this project is designed to complement the existing Vung Ang 1 plant and will play a crucial role in meeting the growing energy demand in the central region of Vietnam.

Quang Trach 1 Coal Power Plant

Operated by EVN, the Quang Trach 1 coal power plant in Quang Binh province is under construction with a capacity of 1,200 MW. The plant is part of the larger Quang Trach power complex, which aims to contribute significantly to the national grid and support the electricity supply for the northern region. It is expected to start operations in 2025.

Thai Binh 2 Coal Power Plant

The Thai Binh 2 project, located in Thai Binh province, is a 1,200 MW coal-fired power plant being developed by PVN (PetroVietnam). Despite delays and financial difficulties, the project is nearing completion and is anticipated to be operational in the coming years. It will provide substantial power to the northern region, supporting industrial and residential electricity demand.

Nam Dinh 1 Coal Power Plant

The Nam Dinh 1 project, a joint venture between Taekwang Power (South Korea) and ACWA Power (Saudi Arabia), is located in Nam Dinh province and will have a capacity of 1,200 MW. The project is expected to help alleviate power shortages in the northern region and is anticipated to begin operations by the late 2020s.

These ongoing projects reflect Vietnam’s reliance on coal to meet its growing energy needs, even as the country faces increasing pressure to transition to cleaner energy sources. The successful implementation of these projects will be crucial for the stability of Vietnam’s power supply in the coming years.

What’s next?

The future of coal power in Vietnam is at a critical juncture as the country seeks to balance its growing energy demands with environmental sustainability and international commitments to reduce carbon emissions. While coal remains a significant part of the current energy mix, providing over half of the nation’s electricity, the government is under increasing pressure to transition towards cleaner energy sources. This has led to a more cautious approach in approving new coal projects and a greater focus on improving the efficiency and environmental performance of existing plants.

With this in mind, foreign firms looking to track the development of Vietnam’s coal power industry should make sure to subscribe to the-shiv.