GOOSE is a COSME (EU) funded project exploring public procurement opportunities in 6 non-EU markets

Vietnam to Build First Hydrogen Plant, Coal to Still be Dominant Power Source

Vietnamese company TGS Green Hydrogen is to build the country’s first hydrogen plant with an investment worth US$840 million. When completed, the plant is expected to generate around 24,000 tons of hydrogen, 150,000 tons of ammonia, and 195,000 tons of oxygen annually. The main attraction of hydrogen is its versatility as it can be used either for energy storage or as fuel. However, despite the developments in renewable energy production, Vietnam will continue to rely on fossil fuels, especially coal. As a net importer of coal, the country plans to increase raise annual coal imports to over 46 million metric tons by 2025 and to 123 million metric tons by 2045.

Vietnamese company TGS Green Hydrogen plans to invest some US$840 million to develop a hydrogen plant, the first in the country. The plant is expected to be built in the southern province of Ben Tre with construction scheduled to begin in June 2022 and expected to be completed by 2023.

The plant will generate around 24,000 tons of hydrogen, 150,000 tons of ammonia, and 195,000 tons of oxygen annually, with the potential to double this capacity at a later stage. The hydrogen will be extracted from water using electrolysis powered by renewable energy, so it can be classified as green energy.

The main attraction of hydrogen is its versatility as it can be used for energy storage or as fuel. It can also be used as raw material in the industrialization process from steelmaking to chemical and refinery industries.

In terms of energy storage, hydrogen can be produced in areas where renewable energy is in abundance, then it can be converted to hydrogen, before being transported to energy-hungry regions. As such, when produced from clean electricity, hydrogen is seen as an enabler in the global transition to sustainable energy. However, the technology is still relatively expensive and still in the early stages of development.

As a regional manufacturing powerhouse, Vietnam needs to double its energy generation to 146,000 MW by 2030, while also committing to prioritizing renewable energy and reducing its dependency on coal.


The country had installed some 76,620 MW of power capacity, the highest in ASEAN, with renewables accounting for 24 percent of this total. Coal-fired power accounts for 30 percent of the national power, hydroelectricity accounts for 30 percent, gas and oil-fired power accounts for 15 percent, and wind power, just one percent.

At the United Nations climate conference (COP26) in November 2021, Vietnam committed to becoming carbon neutral by 2050.

Vietnam’s green energy potential

Vietnam’s fast-paced economic growth, a burgeoning middle-class, and investments in manufacturing and industry have resulted in an unprecedented demand for electricity. The government projects that power consumption will grow between 10 to 12 percent per year until 2030, representing one of the fastest growths in Asia.

However, this growth is set to be outpaced by growth in capacity with the government expected to spend over US$148 billion on the electricity network and power generation. The country’s commitment to increasing energy capacity with the help of renewable energy may create valuable opportunities for foreign investors.

Vietnam has already made significant progress in expanding its renewable energy capacity, mostly in the field of photovoltaic (PV) solar installations. The country’s PV capacity increased from 86 MW in 2018 to 16,600 MW in 2021 and accounts for four percent of the country’s total energy output.

But there are limitations to the growth potential of solar. Since solar provides intermittent energy, Vietnam needs to invest in its electricity grids to achieve their full potential as they are currently designed for much larger power sources, such as thermal plants and hydropower. Further, high solar outputs (particularly during the day) can overload grids at the provincial level, forcing Vietnam Electricity (EVN) — the state energy company — to reduce solar production.

Wind power offers significant scope as a scalable alternative to coal. Vietnam’s topography naturally lends itself to wind power with average wind speeds reaching as high as 10m/s in the southern provinces. Moreover, the country has 3,000km of coastline, which provides opportunities for offshore wind power.

The World Bank forecasted that Vietnam’s potential for offshore wind power could reach 500GW by 2030. In addition, some 66 percent of the total new wind capacity to be added in Southeast Asia by 2030 will come from Vietnam. Wind projects do have a higher barrier to entry, which explains why this energy source contributes to only one percent of the country’s total energy production. This is because the average total installed costs for offshore wind power can reach US$3,200 per kilowatt, significantly more than a solar panel, which has an average total of US$900. Further, few original equipment manufacturers (OEMs) produce the wind power technology in Vietnam, which leads to an average construction period of two years.

Vietnam’s energy crunch and growing coal imports

Despite the progress in diversifying renewable sources of energy, Vietnam will continue to rely on fossil fuels, especially coal, in the short and medium term. The country may face a power crunch with the government warning of electricity shortages this summer due to the disruption in coal imports and elevated commodity prices caused by the Russia-Ukraine conflict and trade flow disruptions due to the pandemic.

Many EVN power plants have been suspended due to low supply and the country has raised its coal production target to 41 million metric tons in 2022, from an earlier estimate of 39 million metric tons. State coal mining company Vinacomin produced 14.9 million tons of coal in the first four months of 2022, an increase of 10 percent from the previous year. This accounted for 90 percent of Vietnam’s total coal output in that period.


To meet its power generation, Vietnam turned to a net importer of coal from a net exporter of coal nearly a decade ago with Indonesia and Australia supplying the majority of the coal — each country produces over 500 million metric tons of coal annually. Vietnam’s Minister of Industry and Trade, Nguyen Hong Dien, stated that the country needed to import 18 to 25 million tons of coal in 2022 to meet domestic demand for electricity and fertilizer production.

Amid rising import prices, Vietnam plans to increase to raise annual coal imports to over 46 million metric tons by 2025 and to 123 million metric tons by 2045.



Would you like to be informed of this type of news?
Save the choices Become a user to be informed of the latest news.