Power
Vietnam LNG power costs exceed tariff ceiling, IEEFA says
A recent study shows that liquefied natural gas electricity generation expenses in Vietnam surpass regulatory limits by up to 46 percent.
Key points
- Generation expenses range between $140 and $180 per megawatt-hour against a $129.60 ceiling.
- Higher fuel costs threaten the financial stability of state utility Vietnam Electricity.
- Analysts recommend prioritizing renewable sources and grid flexibility instead.
What happened
According to an assessment published on 14 October by the Institute for Energy Economics and Financial Analysis, electricity generation from liquefied natural gas in Vietnam surpasses government-mandated price caps by 14% to 46%. Energynews.pro reported that these expenses span from $140 to $180 per megawatt-hour, whereas the regulatory threshold sits at $129.60 per megawatt-hour. Meanwhile, the national retail electricity average remains at $84 per megawatt-hour.
The country's updated power roadmap aims for 22.5 gigawatts of gas-fired capacity before the end of the decade. Realising this objective could push annual fuel import expenditures higher by 66% to 106%.
Why it matters
Rising global fuel quotations, inflated construction expenses, and extended delivery timelines for equipment are undermining the viability of new gas infrastructure. Energynews.pro noted that combined-cycle gas turbine capital requirements have climbed from historical levels of $700 up to $1,000 per kilowatt, reaching between $2,100 and $2,500 per kilowatt.
These pressures endanger the state-run power company, which previously accumulated about $1.7 billion in deficits by the close of 2024 because expenses could not transfer fully to end users.
What comes next
The research indicates that alternative technologies offer financial and operational advantages. Utility-scale solar and onshore wind present lower costs compared to the gas tariff ceiling, alongside significantly shorter construction timelines. Analysts advise shifting near-term focus toward domestic green energy, enhancing storage systems, and establishing clearer procurement frameworks.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Grids decide whether generation becomes power that homes and businesses can rely on. Generation mix, transmission and distribution losses, and tariffs together shape reliability and the case for investment.
100.0% of people in Vietnam had electricity in 2024Countries in this story
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
