Comparing Electricity Transitions in Emerging Economies: Nuclear Growth in Bangladesh versus Solar Growth in Vietnam

Vietnam and Bangladesh are two emerging lower middle-income economies with aspirations to become high income countries in next twenty years. Both have export-oriented economies with a potential of manufacturing and service sector growth and projections of high electricity demand. The rapid growth of demand and depletion of indigenous resources has led both countries to undertake an energy transition. However, in spite of their relatively similar energy paths from the 1980s through the 2000s, with electricity market reforms starting in the 90s, and similar energy challenges, the energy transitions of Vietnam and Bangladesh have unfolded differently since 2010. While Vietnam is rapidly growing solar power (26% of installed capacity by 2020), the country cancelled its nuclear power plant (NPP) in 2016. In contrast, in Bangladesh installed solar power capacity is still below 2% and the country has started construction of a large-scale NPP in 2017. Here we seek to explain why Vietnam is adopting solar power while Bangladesh is adopting nuclear power. Using a most similar case study design and qualitative analysis we explore whether this is a case of crowding out (as one energy suppresses investment of the other) or the outcome is a result of combination of other political, techno-economic and socio-technical mechanisms. Our preliminary findings indicate that the divergence between the energy paths of the two countries is not the result of intentional crowding out driven solely by the state, but rather combination of causal mechanisms in which external actors played important roles. Vietnam attracted solar investors to the country by offering a lucrative feed-in tariff (FITs) after China and Thailand had let similar FITs expire. The FIT success in Vietnam followed the Communist government’s state-led marketization. In contrast, Bangladesh with 50% of the electricity supplied by the private sector and a market-oriented economy could not benefit from the market led net-metering policy despite proving its capacity to have the largest off-grid solar power program in the world. This is because it lacked infrastructural support, incentives to regional solar investors and as yet could not transfer long experience of installing off-grid solar technologies to on-grid technologies. The divergence in nuclear adoption can be explained partly due to distinct relationships with international actors. Bangladesh adopted highly expensive NPP, not because of its economic advantages, but because of strategic cooperation between the government of Bangladesh and Russia, aspiration to be a nuclear country, its symbolic value of development, and regional history of adopting nuclear by neighboring countries like India and Pakistan. Whereas, South East Asian neighboring countries of Vietnam have a history of not adopting nuclear. Vietnam could cancel the NPP even after investing millions of dollars because of its conglomerates’ stronger coal connection, growing potential to import coal from Russia. Our contribution speaks to the under-researched question of energy transitions in the global south and on the technological periphery. We see that the divergence of energy outcome of Vietnam and Bangladesh can be largely explained by the role international actors play in shaping their energy transitions.