Vietnam's Power Shift: Cheap Solar and Expensive Oil-Fired Power

Since solar power can't work after sunset, the power sector has to use more expensive sources like oil-fired power plants.
At a seminar, Nguyen Anh Tuan from the National System and Market Operation Company said the recent heat waves broke records for electricity use in Vietnam.
From January to May 2026, Vietnam used 138.9 billion kWh of electricity, which is 8.9% more than in 2025. The country's electricity demand is expected to reach 325 billion kWh by the end of the year.
Tuan said the biggest challenge is meeting the high demand for electricity during peak hours, especially on very hot days. The use of air conditioners and cooling devices increases electricity demand.
Tuan emphasized that even when using the same appliance, higher outdoor temperatures can increase electricity consumption.
In late May, Vietnam's peak electricity capacity reached 58,000 MW, which is 5.6% higher than the record in 2025. Daily electricity use was 1.2 billion kWh, 9.5% higher than the previous record.
Northern Vietnam used 630 million kWh of electricity, which is more than half of the country's total demand. The peak load was 30,000 MW, 6.3% higher than the 2025 record.
This means northern Vietnam needs an additional large hydropower plant every year to meet the growing demand.
Tuan said the country is only at the beginning of summer, and El NiƱo conditions will persist until 2027, creating challenges.
Tuan said they will do their best to ensure a stable electricity supply during the hot season.
Do Van Nam from Northern Power Corporation said northern Vietnam had an early heat wave, which created challenges for the power sector.
Nam said industrial production and residential consumption account for 95-96% of the total load, and these sectors have the highest increase in electricity demand during hot weather.
High temperatures force cooling systems and air conditioners to work at high capacity, increasing electricity consumption.
During the late-May heat wave, electricity demand in the 17 provinces managed by EVNNPC reached 430-440 million kWh per day, which is 100 million kWh higher than normal.
The power sector must use expensive power sources.
Bui Quoc Hung from the Electricity Authority said the dispatch of power plants is the responsibility of NSMO.
Hung said power generation dispatch is done according to regulations and technical requirements. The dispatch level depends on demand, hydrological conditions, and fuel availability.
The recent hot weather pushed electricity demand to high levels, forcing the system to use more generating capacity.
Hung said the system had to use more expensive sources like oil-fired generation and LNG-fired power plants to meet demand.
Nguyen Anh Tuan said solar power is a significant part of the electricity supply mix, but it's not available during peak hours.
The power system needs flexible sources like hydropower and gas turbines to compensate for the shortfall.
Tam An