The electricity crisis is costing Vietnam $1.4 billion

World News
2023-08-11 | 07:22
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The electricity crisis is costing Vietnam $1.4 billion
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The electricity crisis is costing Vietnam $1.4 billion

Vietnam suffered substantial disruptions to its power supply as a result of an intense heatwave and unprecedented drought in May and June, resulting in a $1.4 billion hit to the country's economy, according to the World Bank.

Northern regions of Vietnam experienced power rationing and sudden electricity cuts that affected a significant number of factories. Some companies received short notices, while others were not warned at all.

Vietnam plays a vital role in the supply chain for several major global companies, many of which, such as Samsung and Foxconn (an Apple supplier), have factories in the northern region not far from Hanoi.

The World Bank noted that as the supply shortfall peaked at 1.8 gigawatts, companies in the northern region incurred losses of up to 10% of their revenues, citing a survey conducted in August regarding the sector.

In a report published on Thursday, the World Bank stated, "Preliminary estimates of the economic costs of power outages in May and June amounted to around $1.4 billion (approximately 0.3% of GDP)."

Vietnam was hit by heatwaves that began in early May, during which record-breaking temperatures were recorded. This period saw the drying up of rivers and reservoirs in hydroelectric power stations.

The country relies on hydropower for nearly half of its energy needs, while electricity demand in the Southeast Asian nation increases by over eight percent annually on average.

The government aims to reduce energy consumption by two percent annually until 2025, hinting at the potential persistence of energy-related issues.

Additionally, Vietnam has made ambitious commitments to move away from coal-generated energy by 2050 as part of efforts to address climate change.

The World Bank stressed to authorities that "immediate action is needed to mitigate future energy security risks and economic losses."

Scientists have attributed the exacerbation of extreme climate events to global warming.

The situation improved this year in early July following heavy rainfall.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AFP

World News

Vietnam

Electricity

Energy

Crisis

Severe

Power

Outages

Cost

Vietnam

Heatwave

Unprecedented

Drought

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