Robust growth in power consumption to continue in 2025: In 9M 2024, power demand grew by 11.3% YoY (~3x of the growth rate in 2023). We raise our 2024F electricity consumption growth forecast to 10.0% YoY from 9.1% previously. 

We maintain our 2025F electricity consumption growth forecast of 9.5% YoY. We maintain our assumption for the elasticity ratio between GDP growth and electricity consumption at 1.4x, equivalent to a 10-year average. Our base case projection for demand growth in 2025F is close to EVN’s forecast of 9.4% YoY. However, EVN has stated that the risk of electricity shortages remains for the northern region with a potential surge in demand during the dry season. EVN is also preparing for a strong-case scenario with electricity consumption growth of up to 13.2% YoY.

We forecast no power shortages in 2025. We project national installed capacity to grow 3.5% and 4.5% in 2024F and 2025F, respectively. We believe that neutral weather conditions in 2025, compared to the slight El Niño (resulting in low rainfall) in 2024, will support sufficient power output to meet demand. Additionally, the completion of national transmission line no.3 in August 2024, which doubled transmission capacity from 2,500MW to 5,000 MW, will potentially help to provide more electricity from the central region to the north during the 2025 dry season. Finally, we forecast sufficient coal and gas supply in 2025F. That being said, for the 2026-2030 period, we believe that the Government needs to resolve policy bottlenecks to meet its power capacity expansion target and ensure sufficient electricity supply.

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