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Vietnam Aims to Crimp Power Use Amid Hydropower Dip, Hormuz Disruption

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Vietnam is planning ahead for potential electricity shortages during its dry season, state-owned Vietnam Electricity said this week, mindful of the additional challenges of rising demand and uncertainties in the global energy market.

The company will face additional challenges from an El Nino weather phenomenon which will reduce water flows through hydroelectric dams, said Nguyen Manh Quang, deputy head of the business and power purchase department of Vietnam Electricity, or EVN.

The company said it will promote electricity conservation and develop battery energy storage systems among other measures.

The company has set up a steering committee for electricity supply management and has coordinated with the National System and Market Operator to develop "flexible operating scenarios" that help boost energy security.

One of the company's top priorities is an increase in solar power generation and to this end it has made it easier for customers investing in the systems to register them online and to obtain preferential loans for them.

The company hopes to reduce total electricity consumption in 2026 by 3%, which would be achieved with a 10% reduction during the April to July dry season. Business and industrial consumers are also being encouraged to shift their demand away from peak hours.

EVN will broaden the peak-hours period when electricity is most expensive to encourage load shifting. It will now cover the period from 6.30 pm to 10.30 pm, it said.

EVN has called on the Northern Power Corporation to develop 530 megawatts of battery storage capacity, for the Hanoi Power Corporation to add 275 MW of storage and the National Transmission Corporation to add 30 MW, it said. This is expected to ease peak hours grid strain further still.

Despite targeting a demand reduction, the original national power system operation plan for 2026 foresaw electricity demand growth of about 8.5% and potentially 14.1% in a scenario of an extreme dry season.

The Vietnamese government is currently trying to ensure hydropower is used efficiently and to keep dam water levels as high as possible ahead of the dry season's peak.

The country is seeking to boost fuel supply for its gas-fired thermal power plants, which has become harder for most countries around Asia since the closure of the Strait of Hormuz by Iran.

While 20% of the world's oil and gas flows through it, as a proportion of Asia's energy imports, the figure is much larger given it is the main buyer of Middle Eastern hydrocarbons.

Coal will figure among Vietnam's contingency plans, with authorities having directed the relevant units to diversify suppliers, increase stocks of the fuel and increase domestic mining capacity, EVN said.

The country sourced 26% of its electricity from renewables by the end of March, the company said, with a renewables mix spanning wind, solar and biomass while the country is also looking at pumped storage to reduce weather-related output fluctuations.

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