Power – In-depth – [NEUTRAL] – 2026 Outlook: Thermal power cycle returns

In 2026, nationwide power demand is projected to grow by 8.5% yoy under EVN’s base-case scenario, with thermal power emerging as a key bright spot for the sector. The main driver comes from compensating for capacity shortfalls from hydropower, as the neutral phase is expected to last only until Sep 2026 before gradually transitioning to El Niño conditions. In addition, the average FMP is forecast to improve by 40-50% yoy, supported by a sharp increase in the CAN price to around VND131/kWh, up 2.8x yoy, along with a 3% yoy increase in the SMP cap. Altogether, these factors are expected to provide strong support for the business performance of natural gas-fired and coal-fired thermal power plants.