2024 is poised to achieve the highest power consumption growth rate since 2018 and so we raise our 2024/25F power consumption forecast accordingly. In 4M 2024, power demand grew significantly by 12.4% YoY (3x of the growth rate in 2023) which was mainly driven by the Households (+18.5% YoY) and Commercial (+19.0% YoY) segments while consumption from Industry & Construction increased 11.0% YoY. Additionally, EVN/MOIT (Vietnam Electricity/the Ministry of Industry & Trade) upward revised 2024F electricity demand growth to 9.6% YoY from the previous estimate of 9.0% YoY and expects electricity demand to potentially peak at +13% YoY during May-July. On April 19, 2024, the MOIT released Decision 924 upward revising the 2024 electricity production plan by 1.4% to 310.6 billion kWh from its previous plan in December 2023.  Given these new developments, we raise our 2024 power consumption growth forecast from 7.7% YoY to 9.1% YoY. For 2025, we expect a stronger recovery in the manufacturing sector to drive power consumption to reach +9.5% YoY (vs our previous forecast of 8.7% YoY). 

We see no power shortages in the south while estimating a 90% possibility of no shortages in the north. Firstly, EVN provided sufficient power supply in 4M2024 despite higher-than-expected YoY growth in power consumption. Secondly, for the south, Phu My 3 started running on LNG on April 11 with an electricity production plan of 500 million kWh during April-May (the peak demand season in the south) to provide sufficient power supply. Lastly, in the north, EVN is actively preventing the risk of power shortages by increasing water storage in hydropower reservoirs to 11 billion kWh compared to 7 billion kWh in the previous year by April, and by stocking 19% more coal than required in the dry season by mid-March. In addition, we expect the completion of 3/4 sub-projects of the 500kv line 3 by end-June to support power transmission from the central to the north, helping to meet the north’s peak demand in June-July. Risks are higher-than-expected out-of-schedule technical shutdowns and lower-than-expected rainfall/water inflows. EVN forecasts a potential power shortage in June-July 2024 in the north ranging from 420 to 1,770 MW in this worst-case scenario (only 1/3 of the power shortage in May-June 2023).

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