Vietnam HVDC Transmission Market Outlook to 2030

Vietnam HVDC Transmission Market Overview

• In recent years, the Vietnam HVDC Transmission market has experienced substantial growth, this is reflected by the global HVDC transmission market reaching a valuation of USD 11.2 billion in 2023 driven by increased energy demands, government initiatives for renewable energy integration, and important infrastructure development across the country.
• The Vietnam HVDC transmission market is consolidated, with a few major players like ABB, Siemens, and General Electric dominating the market. These companies hold substantial market shares due to their advanced technologies, comprehensive service offerings, and extensive experience in HVDC projects.
• In 2023, Hitachi Energy has inaugurated a state-of-the-art Transformers Factory in Bac Ninh, Vietnam, with the goal of advancing a sustainable energy future for all. Vietnam's Power Development Plan outlines clear steps towards achieving a carbon-neutral energy system.
• Hanoi and Ho Chi Minh City dominate the Vietnam HVDC transmission market. These cities are major economic hubs with substantial industrial activities, leading to high electricity demand. Additionally, both cities are central to the government’s infrastructure development plans, including smart grid initiatives and renewable energy projects.

Vietnam HVDC Transmission Market Segmentation

The Vietnam HVDC Transmission market is segmented by various factors like component, application, and region.

• By Component: Vietnam's HVDC transmission market is segmented by component type into converter stations, transmission cables, and other components (transformers, reactors, filters, and control systems). In 2023, converter stations dominated the market due to their critical role in converting AC to DC and vice versa, ensuring efficient long-distance power transmission. These stations are responsible for converting alternating current (AC) to direct current (DC) for transmission and then converting it back to AC at the receiving end.

• By Application: The market is also segmented by application into grid interconnection, offshore wind power, and others. Grid interconnection dominated the market in 2023, driven by the need for robust and reliable connections between regional and national grids to ensure stable power supply and distribution along with the government's focus on harnessing renewable energy sources.

• By Region: The market is segmented by region into North, South, East, and West Vietnam. Northern region dominated the market in 2023, attributed to its industrial base and extensive infrastructure development. The presence of major cities like Hanoi also contributes to high energy demand and investment in HVDC systems.

Vietnam HVDC Transmission Market Competitive Landscape

• Hitachi Energy: In 2021, Hitachi ABB Power Grids recently supplied and commissioned a 220-kilovolt power transformer for Toji Group's 50MWp Loc Ninh 5 Solar Power Plant, part of the 800MWp Loc Ninh series in Binh Phuoc, Vietnam, developed by Hung Hai Group. This achievement positions Hitachi ABB Power Grids as one of only two companies in Vietnam capable of manufacturing and supplying 220-kilovolt power transformers.
• General Electric: In May 2022, General Electric (GE) announced that PetroVietnam Power Corp.'s (PV Power) Nhon Trach 3 & 4 Power Plant, with a 1.6 GW capacity, will be equipped with two GE 9HA.02 gas turbines, marking the first use of GE’s H-Class turbine and the first LNG-fueled power station in Vietnam.

Vietnam HVDC Transmission Market Analysis

Vietnam HVDC Transmission Market Growth Drivers

• Increasing Energy Demand: Vietnam's energy demand has been growing steadily, with a projected increase of 10% annually until 2025, driven by industrialization and urbanization. In July 2023, Vietnam Electricity (EVN) reported that the electricity generation of the whole system reached 26.20 billion kWh, an increase of 7.1% compared to the same period in 2022. This growing demand for electricity necessitates efficient and reliable transmission systems like HVDC to ensure stable and sufficient power supply.
• Renewable Energy Integration: Vietnam is rapidly expanding its renewable energy capacity, aiming to have a substantial portion of its energy mix from renewables. In 2023, the total installed capacity of wind power in Vietnam reached 4,948.5 MW. Additionally, Vietnam's installed solar capacity has doubled in recent years, rising to an estimated 17,600 MW in 2021. HVDC systems are crucial for integrating these renewable sources into the national grid efficiently.
• Infrastructure Development and Urbanization: Vietnam's rapid infrastructure development and urbanization are remarkably boosting the HVDC transmission market. The government's ongoing projects to upgrade and expand the national grid, coupled with the construction of new industrial zones and urban areas, require efficient and reliable power transmission solutions. In 2023, four state-owned banks put aside USD 5 billion in loans to promote the construction of social housing and worker housing projects.

Vietnam HVDC Transmission Market Challenges

• Technical and Operational Challenges: HVDC systems, while highly efficient, come with complex technical and operational challenges. Maintaining and operating HVDC transmission lines requires specialized skills and expertise, which are currently limited in Vietnam. The country’s technical workforce needs upskilling and training to manage these sophisticated systems effectively.
• Regulatory and Approval Delays: The process of obtaining regulatory approvals and clearances for HVDC projects in Vietnam can be lengthy and cumbersome. According to a report by the Ministry of Industry and Trade, it can take up to 2-3 years to get all the necessary approvals for a major HVDC project. These delays hinder the timely implementation and commissioning of HVDC infrastructure, affecting the overall market growth.

Vietnam HVDC Transmission Market Government Initiatives

• National Power Development Plan (PDP VIII): Launched in 2023, PDP VIII outlines Vietnam’s strategic framework for developing its power sector, with emphasis on HVDC technology. The plan allocates USD 1.5 billion for HVDC projects to enhance grid reliability and support the integration of renewable energy. This initiative reflects the government’s commitment to modernizing the national grid and promoting sustainable energy practices.
• Renewable Energy Promotion Policy: The Vietnamese government has introduced various incentives and subsidies to promote renewable energy projects. Under this policy, HVDC projects that facilitate the integration of renewable energy into the grid are eligible for financial incentives, including tax exemptions and subsidies. This policy aims to accelerate the adoption of HVDC technology in renewable energy projects.

Vietnam HVDC Transmission Future Market Outlook

The Vietnam HVDC transmission market is poised for remarkable growth, driven by increased renewable energy integration, technological advancements and innovation, and expansion of cross-border HVDC projects.

Future Market Trends

• Increased Renewable Energy Integration: By 2028, Vietnam’s HVDC transmission market will be driven by the increased integration of renewable energy sources. The country aims to have a substantial portion of its total energy mix from renewables, requiring extensive HVDC infrastructure to manage and transmit this power efficiently. The government’s ongoing support and investment in renewable energy projects will continue to propel the HVDC market forward.
• Efficient and Cost-effective Converter Stations: The next five years will see substantial technological advancements in HVDC systems, including the development of more efficient and cost-effective converter stations and transmission cables. Innovations such as modular multi-level converters (MMC) and hybrid HVDC systems will enhance the reliability and performance of HVDC networks, supporting Vietnam’s energy transition.