Select Country
Follow Us

Powering Vietnam: 8 Key Trends Shaping the Nation’s Energy Future

Vietnam is a country at the crossroads in planning its energy future. Rising demand from consumers nationwide, and the need for more energy to power an anticipated 6%+ economic growth rate, offers challenges, and opportunities for Vietnam’s energy industry leaders.

The energy options available to Vietnam, their pros and cons, investment and environmental considerations, and next steps were reviewed in panel discussions involving local power experts, GE business leaders, and legal and financing specialists at the GE-organised Powering Vietnam conference held in Hanoi on April 27. From these highly interactive sessions, we have pulled eight key insights and take-outs from the forums.

1. Investors want a more open and predictable investment landscape

Investors seek predictability of income, and returns on investment, when they weigh up whether to support an energy project, or not. Predictability, and stability, is enhanced by open, and transparent, regulatory and legal environments designed to provide greater ‘peace of mind’ and ‘no surprises’ for energy investors and developers.


Leo Kirby, Managing Director, Capital Advisory Leader, GE Capital Asia, on the financing landscape for energy investors in Vietnam and the key factors they seek in making their investment decisions.


2. Building relationships, builds opportunities

Building relationships with a wide range of credit agencies, and financial institutions offers greater flexibility in terms of finding the right, most appropriate funding for each project.

In this regard, GE has restructured its capital business to provide more financing options to customers. In addition, as an established equipment manufacturer, GE has experience, and long-standing relationships with many investment agencies. These relationships can make a big impact because financing typically accounts for between 10%-15% of a power plant project cost. Cost differences often depend on accessing the cheapest capital – at the most appropriate terms – for a project.


3. Market-by-market approach works best

A market-by-market approach is the only way to develop the most relevant, and appropriate energy infrastructure for the future. Vietnam for example, has significant commitments to coal power, and breaking from those, would create huge problems for the nation’s credit rating.

Every nation has existing energy plans to be aware of – given this, it becomes a question of what additional supply can be developed from this base. In some countries, it takes a disaster to provoke a change, such as the terrible events at Fukushima in Japan. In China, it was the environmental impact of the previous energy mix that has spurred change.

Fred Burke, Managing Partner, Baker & McKenzie on the unique features of Vietnam’s energy sector and incentives offered to investors and energy developers.


4. Invest in your current infrastructure

While all nations have established energy infrastructures – not all are fully optimized. Given this, installing new technologies to unlock more efficiency, cost savings and reliability in existing assets is a good first step.

Digital industrial solutions for example, offer transformative outcomes. GE estimates that the installation of new predictive maintenance sensors, and tracking software, will enable plant managers to ‘catch’ more than 95% of equipment failures before they occur. In addition, upgrading the assets used in existing coal-fired power plants in Vietnam could generate 11.4 million tonnes of CO2 savings.


Massimo Gallizioli, GE Steam Power Systems Asia Pacific Regional Sales Leader, on how new steam technologies can enhance energy capacity, while also reducing emissions levels in Vietnam.


5. Develop talent to build the future

An upskilled workforce, and new talent is required to maximize the benefits offered by new energy technologies and solutions. All nations therefore, need to invest in programmes to attract, train, and develop the next generation of engineers, and energy experts. Vietnam today, has a shortage of talent in the power sector, and many multinational companies operating in the country, including GE, are committed to constantly developing the skills of its employees across many areas including engineering and leadership.


Do Duc Tuong, Energy Expert, USAID on developing Vietnam’s next generation of energy sector experts and engineers.


6. Markets change and so must we

To ensure every nation has the most suitable energy mix for its needs and resources, there must be flexibility to adapt to changing market conditions.

Adapting to change in the energy landscape however, can be challenging. In this regard, Vietnam has advanced by making renewables a bigger part of their future energy mix. In terms of role models, they could look at Denmark and California who are sustainable power pioneers. While starting with heavy feed-in tariffs, the Danes and Californians, gradually moved away from this model, as new innovations made renewable energy generation and transmission increasingly cheaper.

Andres Isaza, Vice President and CCO, GE Renewable Energy, on Vietnam’s hydro opportunities and wind power potential.

7. Digital is the game changer

Although digitization of the energy sector is in its early stages, new solutions and technologies have the potential to transform Vietnam’s energy sector. For example, by utilising latest gas turbine technologies, supported by digital solutions and predictive apps and software, Vietnam could realize $8.4 billion in fuel savings in the next 25 years – similarly, upgrades and digitization of the nation’s power transmission and distribution could produce an additional $2.4 billion in profit in the next decade.

8. Vietnam has huge potential

Manufacturers are attracted to Vietnam because of its relatively low-cost base, especially cheaper energy to power their factories and facilities. That’s why it’s essential that Vietnam plans well for the future, and makes the most of existing power assets. In energy infrastructure alone, Vietnam has a potential to save as much as US$ 25 billion over the next 25 years with the right investments and options to optimize energy efficiencies.

Subscribe to our GE Brief