Under the action plan on green energy transition and carbon and methane emission reduction set by the transport sector and approved by the Prime Minister, the sales of EVs must reach 78 million by 2050. Once the number of EVs in circulation increases, this means that electricity demand will be higher.

The World Bank, in its report suggesting a roadmap for Vietnam’s national action plan on shifting to EVs released recently, pointed out that the eighth national power development plan (Plan 8) approved in 2023, doesn’t mention the development of charging stations. The plan just predicted a low proportion of EV use, mostly home-charged EVs.

This means that from now to 2030, the demand for electricity charging won’t put pressure on the power sector, because in that period, people mostly use two wheelers, which need small batteries to serve short-distance travel. 

And if so, Vietnam will just have to increase the electricity output by 1-2 percent compared with output shown in a scenario in Plan 8 by 2030. This can be done by increasing planned power generation surplus margin.

However, by 2035, the power sector has to increase output by another 5 percent and increase the network capacity by another 4 percent to satisfy the requirements from charging stations.

By 2045, Vietnam will need electricity output to increase by another 16 percent compared with that shown in the scenario of Plan 8, and the figure will increase to 28 percent at maximum by 2050.

By that time, most of the fuel demand from the transport sector will shift from gasoline/diesel to electricity, if the goals for EVs can be reached.

Regarding the structure of means of transport by 2050, there will be mostly large-size vehicles that consume more energy, such as cars, rather than two wheelers. Therefore, the electricity output would need to grow by 5.1 percent in 2035-2050. Meanwhile, the annual growth rate shown in Plan 8 is 3.7 percent.

The World Bank recommended that after 2030, Vietnam will need to supplement 3-5 percent of grid capacity compared to the scenario in Plan 8, so as to meet the additional charge for EVs charging load in 2030-2045. After that, up to 15 percent of additional transmission capacity will be needed by 2050 to enable 100 percent of electrification of road transport.

VN needs $14 billion a year to increase power capacity

In order to reach the goals in EV consumption, from now to 2030, in addition to the capital needed to implement Plan 8, Vietnam will still need $9 billion more for the power sector, including $1 billion to be spent to increase the capacity of the electricity generation network.

In 2031-2050, Vietnam will need to invest $14 billion a year to produce more electricity and expand its national grid.

Also, Vietnam will have to improve the electricity network performance and battery use performance, and at the same time, promote the transition of means of passenger and cargo transport in the long term, so as to reduce the impact of EVs on the power sector.

The shift from private EVs to public passenger transport in urban areas, and the shift from inter-provincial EVs to railways and waterways in cargo transport will considerably help reduce total demand for vehicle charging. 

The World Bank’s experts have estimated that the shift between the segments at the scale of 35 percent by 2050 will help reduce 9-11 percent of demand for supplemented electricity supply.

The report also suggested that Vietnam should strive for daytime public charging stations (in off-peak hours), because this will help reduce the impact of EV charging activities on the electricity system.  

Key policy interventions include implementing electricity price reforms to encourage off-peak charging, scaling up smart charging facilities, and installing rooftop solar systems at public charging stations to reduce the load on the grid from EV charging.

According to the World Bank Country Director in Vietnam, Cambodia and Laos, Mariam J. Sherman, in addition to charging infrastructure, Vietnam needs to focus on power supply during the transition process. And in order to gain success, there should be close cooperation among ministries and branches, private investors and the public in reshaping the vehicle market, the travel mode, and energy use.

Hoang Hiep