Vietnam Power Outages Cost $1.4-B --- WB Study

Power outages in May and June have cost Vietnam about $1.4 billion, accounting for 0.3% of its GDP, the World Bank estimates, according to Viet Express.

Photo Insert: From mid-May to mid-June, northern Vietnam regions experienced frequent power outages due to heightened power demand.

From mid-May to mid-June, northern Vietnam regions experienced frequent power outages due to heightened power demand, while hydropower supply, one of the main sources of electricity, experienced a severe drop due to droughts.

Several factories in the area could not operate for hours multiple times a week as a result.

The disruption to production has cost Vietnam around $1.4 billion, or 0.3% of its GDP, Dorsati Madani, senior economist at the World Bank, said at a Thursday meeting. The figures were calculated based on unmet power demand, at 36 GWh in 2022 and at 900 GWh in May and June this year.

Surveys by the organization on northern Vietnam businesses in the industrial sector revealed that revenue losses caused by power outages reached 10%, and unmet power demand would also lead to a loss of revenue for Vietnam Electricity of around $75 million.

The World Bank said northern Vietnam's imbalance of power supply is because the region mainly relies on hydropower and coal for electricity, both of which have been short of materials, leading to delays in energy production and distribution.

The limited capacity for distribution makes it difficult for the area to access the excess energy supply in southern Vietnam, around 20 GW worth of energy.

Madani said Vietnam needs more investments in the power distribution system. In a July report, the European Chamber of Commerce said that power outages may happen in cycles, and proposed that the government should focus on long-term plans.

The World Bank suggested several solutions in the meantime, including schedules for the commercial operation of power plants in 2024 and 2025, investments into distribution systems, and diversifying power sources.

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