AES Commits to Build 2.2-GW CCGT Plant in Vietnam

AES Corp. on Nov. 8 signed a memorandum of understanding with the Vietnamese government to build a $1.7 billion gas-fired power plant in Vietnam. The U.S. Embassy in Hanoi made the announcement along with U.S. Secretary of Commerce Wilbur Ross, who was attending a ceremony marking the 25th anniversary of the establishment of the American Chamber of Commerce in Vietnam.

The 2.2-GW Son My 2 project, located in Binh Thuan province, is a combined cycle gas turbine (CCGT) power plant scheduled to come online in 2024. Reports have said the plant could have three, 750-MW generating units. Plans for the project have been discussed over the past few years as Vietnam moves to increase its gas-fired power generation. The country also is ramping up its use of renewable power resources.

“AES is committed to the country’s economic growth and energy transition through the development of gas and renewable infrastructure,” said Andrés Gluski, AES president and CEO, at the announcement. “We appreciate that the Government of Vietnam has selected us to advance this critical project for the country.”

AES President and CEO Andrés Gluski received the approval for the Son My 2 plant from Tran Tuan Anh, Vietnam’s Minister of Industry & Trade. Courtesy: AES-VCM

AES earlier announced it would supply natural gas for the plant from its 450-TBtu Son My LNG (liquefied natural gas) import and storage terminal, which was approved by Vietnam’s government in August. The terminal is expected to begin commercial operation in 2022.

Vietnam has traditionally relied on coal-fired power for its electricity supply. Coal supplies about half of the country’s power today, and is expected to provide about 55% of electricity production in 2025 as new facilities come online over the next few years. However, the government estimates that coal-fired power generation would require as much as 70 million tons of coal annually five years from now, well beyond expected annual output of 51 to 54 million tons from domestic mines.

Vietnam is expected to import coal from Australia, though some financially struggling U.S. coal producers have talked with Vietnamese officials about using imports of U.S. coal. Representatives of Pennsylvania-based Xcoal Energy & Resources met with officials from state-run coal producer Vinacomin in mid-summer in Hanoi to discuss shipping U.S. coal to Vietnam.

It’s expected that some of the LNG to power the Son My 2 plant will come from the U.S. Vietnam expects to import as much as 10 million tons of LNG annually by 2030, as it increases its gas-fired power generation from its current 9 GW to 19 GW over the next decade.

Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).