Vietnam’s electricity efficiency — measured by how much electricity is consumed per US$1,000 of GDP — remains significantly lower than its regional peers, according to an op-ed by Dr. Le Hai Hung, Director of the Institute of Research and Application of Technology (IRAT) and published by VietnamNet. Specifically, Vietnam consumes nearly 2.8 times more electricity than Indonesia and 2.4 times more than the Philippines to generate the same economic value.
Hung suggests this is due to:
- Heavy industry reliance: Vietnam’s economy is still dominated by power-intensive industries like steel and cement, which generate low added value.
- Outdated technology: Many enterprises still use old, inefficient equipment that consumes more electricity per unit of output.
- Low electricity prices: Relatively cheap electricity discourages conservation and investment in energy-saving technologies.
Of note, Vietnam’s inefficient power use poses risks to competitiveness, sustainability, and Net Zero goals. This may also speak to overproduction in state-owned enterprises in energy intensive industries. The cement industry, for example, last year, produced 95 million tons of cement, however, domestic consumption was only 65 million tons.
See also: Cement Industry in Vietnam