Economists often explain a country’s prosperity by comparing electricity consumption with income per capita: the faster GDP grows, the greater the demand for electricity. Accordingly, to meet growth targets of 10% or higher in 2026 and thereafter, Vietnam’s power sector will face significant pressure—especially as the country must also honor its commitment to achieve net-zero emissions by 2050. The relationship between per capita electricity consumption and GDP per capita clearly shows a consistent pattern: higher income levels go hand in hand with higher electricity consumption. More specifically, the relationship between income and electricity consumption follows an upward-curving line, based on which countries can be grouped into three segments. The first is the “escaping poverty” segment, with electricity consumption below 1,000 kWh per person. At this level, electricity is used mainly for lighting, and per capita income typically stagnates below US$2,000. The second is the “industrialization” segment, with consumption ranging from 2,000 to 5,000 kWh per person. Vietnam falls into this category. Electricity begins to flow into manufacturing and production. This is a particularly “sensitive” stage: any power shortage will immediately choke GDP growth. The third is the “prosperity and services” segment, with consumption above 8,000 kWh per person. Developed economies […]
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