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Despite challenges for Vietnamese coal, outlook for fossil fuels good through 2021

November 06, 2020

S&P Global Platts:

Vietnam’s seaborne thermal coal traders are optimistic the country’s fossil fuel consumption will continue to rise through 2021 amid burgeoning demand for electricity production at the lowest cost, despite the funding and regulatory challenges that loom for new coal-fired power plants, market sources said Nov. 6.

A new law on public-private partnerships that comes into effect in 2021 creates new hurdles for foreign coal investors that fail to conclude build-operate-transfer contracts and government guarantee and undertaking agreements before the end of 2020, according to analyst Thu Vu from the Institute for Energy Economics and Financial Analysis, or IEEFA.

Four of the 15 coal power projects currently in the pipeline in Vietnam — Nam Dinh 1, Vung Ang 2, Vinh Tan 3 and Song Hau 2 — have yet to reach the commissioning phase, and with their contractual agreements still pending official sign-off, they could be at risk of being called off due to the new law, according to Vu. 

[Fred Wang and Jia Hui Tan]

More: Vietnam’s thermal coal imports seen resilient through 2021 despite funding challenges ahead

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