Thermal Power Sector Update - Tight power market loosens in 2024

We maintain our estimate for electricity demand in 2023 but are lowering our projection for power demand in 2024. Vietnam Electricity Group (EVN) released its September production volume of 23.6 billion kWh (+4% YoY and -8% MoM) and 9M production volume of 210 bn kWh, +3% YoY. Based on this, we estimate 9M electricity consumption growth of 4% YoY and maintain 2023 electricity consumption of 254 billion kWh, +5% YoY. However, we lower our forecast for Vietnam’s electricity consumption growth rate to 8.4% YoY in 2024 from 9.4% YoY previously. Our macro team maintains their projection for Vietnam’s GDP growth rate in 2024 at 7%. Nonetheless, we reduce our assumption for the elasticity ratio between GDP growth rate and electricity consumption growth rate to 1.2x from 1.3x previously (based on estimated elasticity ratio of 1.0x in 2023), which results in a lower electricity consumption growth of 8.4% in 2024.

Power capacity growth is lower than expected. We lower the 2023 & 2024 national power capacity forecasts by 5% and 8% to 82,266MW (+5.7% YoY) and 85,346MW (+3.7% YoY), respectively. This is mainly due to lower-than-expected transitional renewable power capacity coming online YTD. 

EVN forecasts a looser power market for 2024. They forecast a potential power shortage of 420 - 1.770MW in the northern Vietnam in the dry season of 2024 which is roughly a third of the estimated power shortage in H1 2023. Previously, according to EVN, the northern region was facing an electricity shortage equivalent to ~1,600-4,900 MW in May-June 2023, accounting for ~12%-18% of the region’s daily consumption.

Powered by Froala Editor