BREAKING

Vietnam suffers loss of $1.4bn due to power outages, hot weather

By Al Mayadeen English
Source: Agencies
11 Aug 2023 10:49

The Vietnamese government is aiming for a 2% reduction in energy consumption annually until 2025, adding that power outages may continue.

A view of Hanoi on May 30 as some street lights were turned off to save electricity. (AFP)

The unanticipated drought and extremely hot weather plaguing the country have so far caused Vietnam in May and June to go through severe power outages and a loss of $1.4 billion, per the World Bank.

Residential properties, industries and companies suffered as a result, given that Vietnam is an indispensable part of the global supply chain and many companies such as Samsung and Apple supplier Foxconn have factories not far from Hanoi.

With an expected peak demand-supply deficit of 1.8GW, the World Bank cited an industry survey as part of its August economic updates, stating that businesses in Northern Vietnam reported losses of up to 10% of revenue.

In its Taking Stock report released on Thursday, the World Bank said, "The preliminary estimate of economic costs for the May-June power outages is about US$1.4 billion (or 0.3 percent of GDP)".

Vietnam is reliant on hydropower for almost half of its energy needs, as electricity demand in the nation is growing by more than 8% yearly on average. Meanwhile, the Vietnamese government is aiming for a 2% reduction in energy consumption annually until 2025, adding that the power outage may continue.

Furthermore, the government pledged to shift away from coal-fired power by 2050 in order to better counter the climate crisis.

The World Bank continued to urge for "prompt action" required "to mitigate future risks to energy security and economic losses."

Back in May, temperatures in Vietnam reached 44.1 degrees Celsius breaking its previous record high temperature established in 2019 when it was 43.4 degrees.

"This is a worrying record in the context of climate change and global warming," climate change expert Nguyen Ngoc Huy said as quoted by AFP from the capital Hanoi at the time. "I believe this record will be repeated many times," he said, adding that this confirms "that extreme climate models are being proven to be true."