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June 9th, 2023

In recent years, Vietnam has experienced rapid economic growth and has emerged as a prominent global economic powerhouse. In 2022, its GDP grew by 8.02%, marking the fastest growth rate in 25 years.

However, this year Vietnam’s foreign trade has been experiencing a continuous decline, leading to volatile changes in economic data. Recently, data released by the Vietnam National Statistics Office revealed that in May, Vietnam’s exports decreased by 5.9% compared to the same period last year, marking the fourth consecutive month of decline. Imports also declined by 18.4% compared to the previous year.

In the first five months of this year, Vietnam’s exports dropped by 11.6% year-on-year, amounting to $136.17 billion, while imports decreased by 17.9% to $126.37 billion.

To make matters worse, the recent heatwave has hit the capital city of Hanoi, with temperatures soaring to 44°C. The high temperatures, coupled with increased electricity demand from residents and decreased hydroelectric output, have led to widespread power outages in industrial parks across southern Vietnam.

Vietnam plunges into power crisis as 11,000 companies are forced to reduce electricity usage.

In recent days, certain regions of Vietnam have experienced record-breaking high temperatures, resulting in a surge in electricity demand and prompting several cities to reduce public lighting. The Vietnamese government offices have been urged to reduce their electricity consumption by ten percent.

Meanwhile, manufacturers are shifting their production to non-peak hours to maintain the operation of Vietnam’s national power system. According to the Southern Power Corporation of Vietnam (EVNNPC), several regions, including Bac Giang and Bac Ninh provinces, are facing temporary power cuts, affecting some industrial parks. These regions are home to major foreign companies such as Foxconn, Samsung, and Canon.

Canon’s factory in Bac Ninh province has already experienced a power outage since 8:00 a.m. on Monday, and it is expected to last until 5:00 a.m. on Tuesday before power supply is restored. Other multinational manufacturing giants have yet to respond to media inquiries.

On the official website of the Southern Power Corporation, information about rotating power outages in different regions this week can also be found. Many areas will face power cuts ranging from a few hours to an entire day.

Vietnamese meteorological officials have warned that the high temperatures may persist until June. The state utility company, Vietnam Electricity (EVN), has expressed concerns that the national power grid will face pressure in the coming weeks. Without electricity conservation, the grid will be at risk.

According to the Vietnam Electricity Regulatory Authority, over 11,000 companies in Vietnam are currently being forced to reduce their electricity consumption as much as possible.

The Vietnamese Ministry of Industry and Trade proposes measures to prevent power outages. Recently, according to Reuters, frequent and often unannounced power cuts in Vietnam have prompted the European Chamber of Commerce in Vietnam to urge the Vietnamese Ministry of Industry and Trade to take immediate action to address the emergency situation.

Jean-Jacques Bouflet, Vice Chairman of the European Chamber of Commerce in Vietnam, stated, “The Vietnamese Ministry of Industry and Trade should take emergency measures to prevent damage to the country’s reputation as a reliable global manufacturing center. Power outages have severely disrupted industrial activities.”

For the manufacturing industry, power outages essentially mean production shutdowns. What frustrates industrial enterprises the most is that power cuts in Vietnam do not always follow a schedule. The frequent occurrence of unplanned power outages has caused a backlash from businesses.

On June 5th, the European Chamber of Commerce (EuroCham) sent a letter to the Vietnamese Ministry of Industry and Trade, urging relevant departments to take swift measures to address the power shortage situation.

According to two local officials, certain industrial parks in Bac Ninh and Bac Giang provinces in northern Vietnam have been facing power outages. One official stated, “We will be working with the Vietnam Electricity Corporation later today to discuss the situation and possible measures to mitigate the impact.”

Extreme heatwaves of over 40°C observed in multiple locations worldwide Since the beginning of this year, extreme weather events have been frequent in various parts of the world. The UK’s Meteorological Office has stated that with increasing greenhouse gas emissions and the anticipated arrival of El Niño weather later this year, the likelihood of global temperatures exceeding 1.5°C is growing. This summer may be hotter than ever before.

Southeast Asia and South Asia have recently experienced high-temperature weather. According to data from the Thai Meteorological Department in April, the highest temperature in the northern province of Lampang reached nearly 45°C.

On May 6th, Vietnam recorded its highest temperature ever at 44.1°C. On May 21st, several parts of India, including the capital city of New Delhi, experienced a heatwave with temperatures reaching or exceeding 45°C in northern regions.

Many European regions have also been affected by extreme droughts and heavy rainfall. Data from the Spanish National Meteorological Agency shows that the country experienced the highest level of drought and heat in April since 1961. The Emilia-Romagna region in Italy has faced continuous heavy rainfall, leading to floods and landslides.

Extreme weather conditions contribute to increased energy consumption. The use of electricity significantly rises during hot weather, which can potentially lead to energy shortages.