OREANDA-NEWS. BMI View: There are significant opportunities for independent power producers (IPPs), turbine manufacturers and private investors in Vietnam's thermal power generation sector - particularly the coal segment. A flurry of private sector activity in the coal sector will be supported by rapid growth in electricity demand and market deregulation, as well as delays to nuclear expansion and insufficient domestic gas supplies.

The thermal generation segment in Vietnam will continue to offer sizeable opportunities for investors and equipment suppliers. A number of large-scale power projects have advanced in the last few months - with institutional investors and utilities entering the sector to benefit from the huge growth potential.

Latest Updates And Structural Trends

- Rosatom's involvement in Vietnam's emerging nuclear sector aligns with our view that nuclear projects in Asia will be increasingly financed by foreign governments or state-owned utilities - particularly Russia and China. Despite this development, we are not factoring any nuclear capacity into our 10-year power forecasts in Vietnam, as there are still numerous barriers to project realisation.

- Vietnam's wind market will continue to be a regional underperformer in terms of total installed capacity over our 10-year forecast period, as a lack of regulations encouraging investment, low wind power tariffs and the government's stronger focus on conventional power sources deter investors from developing projects. Until these issues are resolved, we expect only sporadic project developments, as opposed to a widespread investment trend.

- RnR Market Research forecast electricity consumption in Vietnam will grow at an annual average of 7.2% between 2015 and 2025, and the government will continue to encourage investment in coal-fired capacity to meet demand. Vietnam's Master Plan VII predicts the country will need 75,000MW of installed capacity by 2020. Although we do not believe Vietnam will meet this target, it does serve as an ambitious statement of intent.