Vietnam's National Energy Policy Needs Fuelling

Vietnam's National Energy Policy Needs Fuelling

Statistics from the Ministry of Industry show that the total energy consumption of Vietnam grew from 4.14 million TOE in 1990 to 16.3 million in 2003, an average growth of 11 percent per year. The average secondary energy consumption of a Vietnamese rose from 102 kgOE in 1990 to 303 kgOE last year.

Despite the achievements of the past few years, Vietnam’s energy industry is still in an under-developed state, according to Deputy Minister of Industry Do Huu Hao.

It still has a per capita level of production and consumption of energy which is far lower than that of other countries in the region and many countries around the world. Many energy production establishments still employ old technologies and equipment which are harmful to the environment and have low productivity, especially in the areas of coal and electricity. The industry has also not yet effectively mobilised capital flow from the private sector, he stressed.

More research and exploration into existing and potential energy resources is needed to boost the development of the local power sector in the areas of petrol, coal, hydro-power, new energy and recycled energy, Hao pointed out.

The industry should properly exploit local energy resources as well as accelerating coal mining and fuel market expansion. Advanced technologies which allow the usage of alternative energies such as ethanol and hydrogen should be applied to reduce the nation’s dependence on petroleum. Hao called on the formation of a local competitive energy market, the diversification of investment and business methods and in particular the participation of private investment into small hydro-power stations. The State should however maintain a monopoly in key areas to ensure energy security.

In particular, he commented that an electricity wholesale market will be formed in the 2006-2010 period while a retail market is scheduled from 2010 to 2020. The industry will also join the regional power grid with ASEAN members and China in the 2006-2010 period while the plan for a gas pipeline network with those countries is scheduled for 2015-2020 period.

The demand for electricity in Vietnam has increased by 13-15 percent annually in recent years. The total electricity production will reach 48-53 billion kWh by 2005, 88 to 93 billion kWh by 2010 and up to 200 billion kWh by 2020. In the 2006-2010 period alone, another 52 electrical plants with an aggregate capacity of 102,000 MW will need to be put into operation, of which 42 are hydro-power stations (around 4,800 MW).

Recent research on national hydro-electric planning conducted by the ministry in conjunction with the Norwegian Norad and the Swedish SiDA organisation also points out the large potential for hydro-electric development (estimated at 17,700 MW) in a country with many mountains and plentiful water resources such as Vietnam. However, only 4,200 MW or less than 50 percent of the current total assembled capacity of 10,540 MW has been utilised. In 2003, hydro-power stations provided 19 billion kWh, out of the total 41 billion kWh of electricity output. The draft national energy policy anticipates around 35 billion kWh will be produced by 2010 and 55-60 billion kWh by 2020.

Hydro-electricity remains vital to the development of electricity generation sources in the next two decades, which is expected to contribute 46 percent or 12,000 MW of the total additional 26,000 MW needed by 2020.

• Lan Anh