Vietnam faces rising power demand as EVN warns of fuel supply risks, climate pressures

Vietnam’s power sector is facing mounting pressure from surging electricity demand, volatile global fuel markets, and climate-related risks, prompting officials and industry executives to call for greater energy efficiency as a key pillar of the country’s energy security strategy.

Speaking at a power-saving forum amid peak period on Monday, Dang Hai Dung, deputy director of the Ministry of Industry and Trade's department of innovation, green transformation and industrial promotion, said Vietnam’s national power system has recently recorded peak demand exceeding 58,000 megawatts, while daily electricity consumption has surpassed one billion kilowatt-hours.

The government expects electricity demand to continue rising sharply as Vietnam pursues its goal of achieving double-digit economic growth in the coming years, placing increasing pressure on the country’s ability to secure adequate power supplies for industry, businesses and households.

Beyond meeting immediate demand, Vietnam must also prepare for longer-term growth by accelerating investment in new power generation and transmission infrastructure to avoid future supply shortages, Dung added.

Ngo Son Hai, deputy CEO at Vietnam Electricity (EVN), said turbulence in global energy markets is affecting both fuel supply availability and input costs for electricity generation.

Many of Vietnam’s power plants remain dependent on coal and natural gas. Although EVN has worked with fuel suppliers since the beginning of the year to adjust supply plans, disruptions to fuel supply chains and fluctuations in fuel prices remain significant risks for power system operations, Hai noted.

Climate change is creating additional challenges, he said. The possibility of El Niño conditions could reduce water availability for hydropower generation, while prolonged heatwaves are driving electricity consumption higher, putting pressure on both electricity supply and demand simultaneously.

The transition toward renewable energy is also increasing operational complexity. As wind and solar power account for a growing share of the electricity mix, forecasting generation and balancing the grid become more difficult due to the intermittent nature of renewable resources.

At the same time, Vietnam faces a substantial investment challenge. According to EVN, the country needs to add roughly 4,000-5,000 MW of new generation capacity annually to keep pace with demand growth. However, power projects often require years to complete permitting, land clearance, and construction procedures.

Participants at the forum agreed that energy conservation should be viewed as a long-term strategic solution rather than a temporary response to power shortages.

Hai stated that reducing electricity consumption by 2% annually would have an impact equivalent to avoiding investment in 1,000 MW of new generation capacity. “This demonstrates the significant economic value of using electricity efficiently,” he said.

The Ministry of Industry and Trade stated that the government is implementing measures to promote efficient energy use, including new energy-efficiency standards, regulatory reforms, and the planned establishment of an energy-efficiency fund to support businesses investing in advanced technologies.

Industry experts said digital technologies, artificial intelligence, the Internet of Things, smart grids, and real-time energy management systems will play an increasingly important role in reducing electricity consumption while maintaining economic growth.

Industry insiders concluded that ensuring Vietnam’s energy security will require not only expanding generation capacity but also greater participation from businesses and consumers in using electricity more efficiently.

Such efforts could help reduce investment pressures, improve economic competitiveness and support the country’s broader sustainable development goals as electricity demand continues to climb.