Clean Energy Transition In Vietnam: Current Status and Perspectives - - PowerPoint PPT Presentation

Clean Energy Transition In Vietnam: Current Status and Perspectives

Presenter: VU XUAN NGUYET HONG

Senior Consultant, Vietnam

UNU-WIDER Development Conference, Helsinki 13-15, September 2018

Contents

➢ Vietnam’s context toward clean/renewable energy transition ➢ The drivers of clean/renewable energy transition in Vietnam ➢ The Future of Clean Energy in Vietnam:

• vercome challenges for RE transition

• 1. Vietnam’s context toward

clean/renewable energy transition

• High economic growth in Vietnam has associated with a high growth
• f energy consumption: 1.62 time higher between 2001-2015 on

average.

2 4 6 8 10 12 14 16 18 20

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Growth of electricity consumption per capita Growth of GDP in PPP per capita

Source: calculated from World Bank’s and EIA data

• But, the trend of this correlation tends to decrease: 2001-2005:

1.76 times; 2006-2010: 1.69 times; 2011-2015: 1.35 times

• 1. Vietnam’s context… (2)
• Energy development in the country has been largely depended on fossil

fuels and hydro-power: In 2015, their shares recorded at 70.5%. Non- hydro Renewable energy presents a very limited share : 0.4%.

Natural gas, 20.48% Coal, 33.04% Hydro (large H), 37.47% Oil, 2.24% Solar, 0.01% Wind, 0.35% Other (diesel, small HH, biomass, waste to energy), 5.14% Import, 1.28%

• 1. Vietnam’s context… (3)
• The revised PDP VII (2016) has planned to increase the share of renewable

energy sharply, from 0.4% now to 7% by 2020 and 14% by 2030.

14.90% 42.70% 30.10% 1.42% 1.33% 7.15% 2.40%

2020

Natural gas Coal Nuclear Hydro (large H) Oil Solar Wind Other (diesel, small HH, biomass, waste to energy) Import

14.70% 42.60% 3.55% 16.90% 9.27% 4.63% 7.10% 1.20%

2030

Natural gas Coal Nuclear Hydro (large H) Oil Solar Wind Other (diesel, small HH, biomass, waste to energy) Import

However, share of coal power is expected to be as high as 42.6% in 2030.

Targets set for RE development

58 101 186 452 108 165 395 599 200 400 600 800 1000 1200 2015 2020 2030 2050 RE Non-RE

TWh

140 800 2000 6000 5 850 4000 12000 17000 21600 24600 27800 5000 10000 15000 20000 25000 30000 2016 2020 2025 2030 Wind Solar Hydro

MW

Source: Strategy of RE development (2015) Revised EDP VII (2016)

RE transition dilema:

✓ On one hand, Vietnam’s Revised PDPVII planned 42 GW

• f new coal capacity (22 coal-

fired plants) ✓ If all these coal-fired power plants were built, VN would have the fourth largest number of coal-fired power plants in the world ✓ Energy development based on fossil fuels would lead the economy to environmental pollusion risks and increase of CO2 emission ✓ On the other hand, VN has high potential for developing different types of RE which currently has not been exploited yet.

1000 2000 3000 4000 5000 6000 7000 8000

WIND ENERGY BIOMASS URBAN WASTE TIDAL ENERGY GEO-Thermal

Potential capacity

• 2. The Drivers of Clean/Renewable Energy

Transition in Vietnam

Global context:

• COP 21 and commitments to reduce CO2 emission
• Reduction of global financing for coal-fired projects
• Costs for investing in RE droped by 10% last two years-

installed RE capacity increased sharply and steadly.

• Technology advancements – various RE technology

solussions

National context

• Policies to promote non-hydro RE were introduced

(strategy for RE dev, several incentives introduced to RE investment projects)

• Increased public awareness of the environmental risks from

coal-fired power plants – created pressure for RE transition

• 2. The Drivers… (2)
• More difficult to borrow ODA & international

development partners for coal-fired power investment

• Energy market reforms: Electricity price reform,

competitive retail power market by 2030, FIT mechanism,

• Greater interest of RE investors and international

development communities

Some evidence

• National context: Policies to promote non-

hydro RE

– RE development strategy to 2030 and vision to 2050 (increase installed and production capacity

• f RE, increase share in energy sector; technology

advancements…etc.) – Policy mechanisms to promote non-hydro RE investmnt (wind, solar, bio-fuel..) in term of finance, tax, FIT, land preference

Increased public awareness of the environmental risks from coal- fired power plants – created pressure to move toward RE transition

• Development partners supports to increase

awareness on RE dev.

• Campains by the social communities & experts

(Green ID, REN 21), people living close to the coal- fired power plants (about air pollusion issues);

• The voices of development partners on Vietnam’s

coal-fired power development plan

• 3. The Future of RE in Vietnam:
• Now is the time for RE transition in VN since

we have several conditions/opportunities:

– Government laws and policies are in place; – Pressures are enhanced both externally and internally (as mentioned) – Costs of RE investment vs. coal-fired power become more competitive

• Project development capacity
• Data/information availability/ accessibility
• Dependence on foreign technology
• Infrastructure readiness

Technical

• Low electricity price
• Large investment required
• Need national planning for RE in place
• More effective policy/mechanism

Non- technical

• 3. The Future… (2)

However, VN needs to overcome challenges for RE transition (at least in a short run)

• What should be done?

– More strong commitments and policy will from energy policy-makers. – The PDP VII needed to be revised in near future to meet the RE transition tendency (higher share

• f RE)

– RE transition and energy efficiency approach should be hand in hand (the later has very high potential in VN). – Make sure the energy sector reforms and RE policies implemented effectively in practice.

Thank you for your attention