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Vietnam Considers Scaling Back Plans to Build New Coal Power Plants

The move comes as thermal power plants are increasingly difficult to finance, while their detrimental environmental impacts are impossible to ignore.

Bloomberg reports that the National Steering Committee for Power Development has recommended the elimination of 15 gigawatts (GW) of planned new thermal power by 2025.

While the suggestion will have to be approved by the central government, the committee has proposed the recommendation due to slow progress on a number of proposed coal-fired power plants, as well as growing reticence among certain provinces to develop these projects.

In December, for example, the government of Thua Thien-Hue Province decided not to include any additional thermal power in its future power development plans.

Bloomberg adds in the same article that the committee's proposal further states that by 2025, coal should provide roughly 37% of Vietnam's electricity. Currently, the government aims to have coal generate half of the country's power by that year. Renewable energy, meanwhile, would expand under this new direction to a quarter of power generation.

Daine Loh, an analyst at Fitch Solutions, told the business news source that nearly 17 GW of coal-generated power capacity is currently under construction, while another 29 GW is in the planning stages. Vietnam has the world's fourth-largest planned set of thermal power plants.

However, major banks in Japan, South Korea and Singapore, which have funded a number of Vietnamese plants, are now cutting their financing of thermal power over climate change concerns.

In January, 12 environmental and health NGOs sent a letter to Prime Minister Nguyen Xuan Phuc asking him to halt the planned construction of 14 thermal power plants in Vietnam.

Renewable energy, especially wind and solar, has grown in leaps and bounds over the last 18 months, turning Vietnam into a regional leader in the field.

All of this comes as the Ministry of Industry and Trade predicts severe power shortages to hit the country starting next year as supply fails to keep up with exploding demand.