Vietnamese energy businesses to face big losses in low carbon transition-Xinhua

Vietnamese energy businesses to face big losses in low carbon transition

Source: Xinhua

Editor: huaxia

2023-05-22 19:12:15

HANOI, May 22 (Xinhua) -- Vietnam's energy sector is faced with the physical effect of climate change and the risk derived from the shift towards renewable energy, Vietnam News reported on Monday.

Greenhouse-gas emissions from human activity are contributing to heat-waves, droughts, and other extreme weather events that are likely to have a significant impact on the country's energy sector.

State utility Vietnam Electricity Group (EVN) is struggling to generate enough electricity to meet the demand of the economy over the summer months, said Vo Quang Lam, deputy general director of EVN.

For businesses, there is the risk that comes from the transition to a lower-carbon economy, making companies' assets become worthless, said industry experts.

Vietnam's shifting away from fossil-fuel energy would affect companies' assets that generate significant amounts of greenhouse gases.

Any asset that produces less than expected because of climate change or its limitation regulations could be subject to a write-down, said experts. For example, coal-fired plants face a significant risk of being shut down before the end of their designed life spans.

In addition, Europe and Japan announced they would no longer give financial support to coal-fired plants, which means it is more expensive to invest in thermal power projects.

According to the Ministry of Construction, Vietnam had 29 coal-fired power plants in operation in 2021 with thermal energy accounting for 32 percent of the country's energy mix.

Under the newly-approved national power development plan, coal-fired power output would drop to 20 percent of power supply by 2030 while the share of renewable energy in the country's power mix would be raised to 67.5 to 71.5 percent.