Description: 

The project will contribute to meeting the objectives of the National Energy Development Strategy guiding the power sector up to 2020 to reduce investment needs in the power sector, strengthen energy security, control and mitigate environmental pollution in energy activities and foster socioeconomic sustainable development.

Background:

Vietnam Electricity (EVN), a holding company active in all electricity activities, is the single wholesale purchaser from power generation and dominates the power sector. As of 2011, EVN held majority ownership of installed generating capacity directly (e.g. strategic multi-purpose hydropower plants) and through its subsidiaries. Others, mainly Vietnamese SOEs and local private investors, own around 17 percent of generating capacity as independent power producers (IPPs), and foreign-invested build-own-transfer (BOT) power plants own around 13 percent of generating capacity. Transmission of electricity at 500 kV and 220 kV is under the ownership of the National Power Transmission Corporation (NPT), an EVN subsidiary formed in July 2008.

By 2010, the total generation capacity was 19.74 GW. Between 1995 and 2010, annual per capita electricity consumption increased from 156 kWh to 983 kWh. Investments fail to keep up with demand growth to maintain adequate network capacity and generation reserve levels, leading to load curtailment, particularly during dry hydrology and high peak demand periods.

Objectives and Outputs:

The objectives are to improve the performance of Vietnam's power corporations (PCs) in providing quality and reliable electricity services, and to reduce GHG emissions through demand side response and efficiency gains.

There are three components to the project. The first component is system expansion and reinforcement, which will cover construction and reinforcement of 110 kV, Medium Voltage (MV) and Low Voltage (LV) electricity distribution networks, including substations, of the PCs. The second component is introduction of smart grid technologies in distribution. The focus is on automation, through supervisory control and data acquisition systems of electricity distribution network operations and data collection by the PCs. The component will assist to increase efficiency, reliability and effectiveness of the PCs' systems and operations, and optimize distribution system configuration by providing real time data from both the supply and the demand side.

The third component is technical assistance and capacity building of Electricity Regulatory Authority of Vietnam (ERAV) for improvement of efficiency in electricity tariffs, incorporation of smart grid technologies and renewable energy in the grid and distribution codes, development of demand response, project management and M&Es. Advanced metering infrastructure systems, programs promoting efficient electricity use such as a customer awareness campaign and demand response programs will also be implemented.

The TA component will complement the previous two components through building capacity and implementing arrangements to maximize PCs’ efficiency improvement. A grant from the Australian Agency for International Development (AusAID) under the AusAID-World Bank Strategic partnership in Vietnam (ABP) will finance activities contributing to climate change mitigation through efficiency gains in power distribution and avoided power generation.

This project summary is drawn from draft project proposals [such as the PAD, PID, SAR, and country investment plan] and may not contain the most up-to-date information.

IBRD Project Portal


Project Details:
Proposed Decision | Project Document
Approved on June 29, 2012 (Approved Decision)
Approved amount(s):
USD 30.0 million