Economic Sector

Last updated: Thursday, January 24, 2019


Sustainable Energy Development

Posted: Monday, January 29, 2018

The energy story in Vietnam has always been a big topic influencing the economy. Therefore, in the coming time, key national energy sectors such as oil, gas, coal, electricity, etc will need a radical approach for sustainable development.

Great potential
According to Mr Nguyen Van Vy, Permanent Vice Chairman and Secretary General of Vietnam Energy Association (VEA), the Government of Vietnam has always determined that renewable energy is an environment-friendly sustainable energy source without leaving much waste and can be exploited for a long-term, without harming the ecosystem. According to the scientists, the development of renewable energy will contribute to reducing greenhouse gas emissions in energy activities compared to normal development: about 5 per cent in 2020, about 25 per cent in 2030 and about 45 per cent in 2050.

In addition, according to Vietnam's Renewable Energy Development Strategy to 2030, with a vision to 2050 approved by the Prime Minister, the percentage of the renewable energy of the total primary energy demand was about 31.8 per cent by 2015, will become approximately 32.3 per cent by 2030 and about 44.0 per cent by 2050.

Focusing on the development of new energy sources, wind power, the Ministry of Industry and Trade has also approved the development plan for wind power in some localities. Accordingly, it is expected that by 2030, Ca Mau will have developed 3,607 MW; Binh Thuan 2,500 MW; Ninh Thuan 1,409 MW; Tra Vinh 1,608 MW; and Soc Trang 1,470 MW.

Another potential source of energy is solar. According to the assessment of experts, Vietnam is a country with a high number of hours of sunshine a year on average from 1,800-2,600 hours. It is also the country with the average annual solar radiation intensity of 4.6kWh/m2/day, which is very good compared to the world average. Therefore, this will be a highly feasible energy development direction. In addition, Vietnam also has diversified sources of renewable energy such as hydroelectric, geothermal, and marine energy.

Mr Nguyen Hong Minh, Deputy Director of the Vietnam Petroleum Institute (VPI), said that the output of oil and gas exploitation in 2017 is estimated at nearly 16 million tonnes. but not much lower than in 2016. Overall, the oil and gas also face many difficulties. The White Tiger Oil Field used to contribute 15 per cent of the State budget, but now dozens of oil fields are being exploited but their yields are declining. Potential oil fields are getting deeper and deeper, leading to increased production costs. In terms of gas, the output is currently rising but the large fields are declining their output. Two major gas projects will have to wait until 2021- 2022 to come into operation. "Even in the coming time, Vietnam may have to import oil and gas from 20-30 per cent," said Minh.

Investment in technology needed
Mr Armin Bruck, Chairman and CEO of Simens Group, said that in order to provide reliable energy sources and optimize the efficient use of energy, Vietnam must efficiently make use of energy, such as renewable energy sources, smart grids, ranging from centralised power models to distributed power models.

According to Dr Vo Tri Thanh, Deputy Chairman of the Central Institute for Economic Management (CIEM), Vietnam's energy sector is facing a revolution in the structure, change in energy use, market and technology. Energy requires high investment costs, so this is the story of the interaction of the role of corporations, large enterprises. Vietnam is in the process of development so it has a very high energy demand. And to solve this multi-legged problem, Vietnam just has to transform the strategy of energy development, thoroughly solving many remaining issues such as the level of personnel management, corporate governance in the state-owned enterprises and corporations.

In addition, Mr Tran Viet Ngai, Chairman of the Vietnam Energy Association, said that in order for the renewable energy sector to develop sustainably, the State should focus on a number of policy solutions. The government should exempt from reduction of electricity projects by using renewable energy as for projects in the field of investment incentives. The government should have policies and mechanisms such as land allocation, tax exemption in the early years of projects that have not recovered capital, import tax exemption and renewable energy equipment.

In addition, according to Mr Ngai, the Government should also consider investing in the ESS technology to stabilise the frequency, voltage, load and increasing the time to generate electricity; the first important measure is to promote the propagation of energy saving in order to reduce the burden on investment in the power grid projects.

Anh Phuong

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