Matt Gray looks at how a scenario that is aligned with the climate goals set out in the Paris Agreement could affect the role of coal-fired power plants in Vietnam.
As Vietnamese government’s policy, market liberalisation and renewable technology advances play out across the country, owners of coal power stations in Vietnam risk losing up to US$11.7 billion in stranded asset, Gray said.
“Given that power sector investments have multi-decade time horizons, investors and policymakers need to act now to minimize stranded assets and avoid high-cost energy lock-in,” he noted.
Carbon Tracker researchers found that from 2010 to 2017 coal generation increased 72% in Vietnam. Due to rapidly declining cost of renewable energy, the average coal unit in the country will be retired at just 15 years old.
Falling renewable costs could unsettle that outlook, according to Gray. New solar plants may become less costly than operating existing coal projects by 2027 in Vietnam. As more of that cheaper solar and wind generation is added in the country, coal plants will go idle more often and struggle to generate revenue needed to repay their loans, Gray stressed.
Vietnam has signed the 2015 Paris climate agreement, which calls for governments to limit carbon emissions. To help fulfill their commitments, the country may pass regulations supporting renewable energy or requiring expensive pollution controls on fossil fuel plants, Gray added, accelerating the shift away from coal.
- Trump tried to rescue coal. Instead, coal capacity retirements doubled in 2018
- Delingpole: ‘Greta Who?’ China Ramps up Coal-Fired Energy Production
- Thailand's EGATi builds $2.37-bln coal-fired power plant in Vietnam
- Vietnam attends 23rd GMS ministerial conference in Phnom Penh
- VN construction ministry to release quarterly property market reports
- HCM City: Conference spotlights India-Vietnam textile cooperation
- Trump Wants to Bring Back Coal and Steel Jobs as China Cuts 500,000
- Calls for replacement of Australia’s coal-fire power stations
- Insurers in UK and US lagging behind in divesting from coal, report finds
- Coal India may use drones to check illegal mining and pilferage