Energy Sector Needs More Effective Planning

Mr Le Tuan Phong, Deputy Director General of General Directorate of Energy, said the energy demand in Vietnam increased rapidly by 11.5 per cent in the 2011-2010 period. Accordingly, the power consumption of Vietnam increased on average by 13.07 per cent per year in the 2006-2010 period and increased by 11 per cent in the 2011-2015 period.

 

After 9 years of implementation of the energy development strategy, the national electricity system had a total capacity of over 42,000MW with about 160 billion kWh of the electricity production in 2014 and 40 million tonnes of coal mining; and about 17 million tonnes of oil extracted and 10 billion cubic metres of gas. Renewable energy has been initially exploited and used effectively.

 

The inadequacies of the energy sector mainly resulted from lack of specific orientation and incomplete restructuring without compliance in regular market distribution. Dr Tran Dinh Thien, Director of the Vietnam Institute of Economics, cited that the manufacturing and processing industry has contributed only 1.6 per cent to the economy during 30 recent years. This is attributed to the energy sector that has failed to meet the development needs. "The efforts on coal mining and hydroelectricity generating are great, but still fail to meet the development needs," said Mr Tran Dinh Thien.

 

Mr Thien highlighted that while, China increased 4.5 per cent to tackle their growing energy demand, but caused environmental pollution, while Vietnam increased by 1 per cent with a much lower quality.

 

In regard to the shortcomings of planning for hydropower, many projects were excluded from planning and a number of incidents have been caused by poor local planning and ignorance of flood control, water regulation, and system operation of ladder hydropower projects.

 

The Energy Development Strategy of Vietnam to 2020 and vision to 2030 aims to ensure adequate energy supply for socio-economic development needs. Specifically, in 2015, total national energy consumption in Vietnam was about 55 million tonnes of oil equivalent (TOE) and this will reach about 100-110 million by 2020 about 310-320 million of TOE by 2050. According to its objectives, by 2020, most households will have electricity access and by 2030, be supplied with updated and sustainable energy services and reasonable price. Greenhouse gas emissions will be reduced by 5 per cent by 2020 and 45 per cent by 2050. Besides, the percentage of households using solar equipment will increase from 4.3 per cent in 2015 to 50 per cent by 2050.

The energy sector is still directed towards resource extraction, processing, assembling for the increase of output and productivity, instead of value. The restructuring of a number of energy companies is limited to identification of business lines, merely divestments, but generally is not being considered in the strategy of the whole industry.

Mr Nguyen Van Bien, Vice President of Vietnam National Coal-Mineral Industries Holding Corporation (Vinacomin), said that it is necessity to reform the energy market to meet future needs while maintaining access to all objects at reasonable prices and reducing emissions and environmental impacts.

 

In the coal sector, Vietnam has turned from an exporter into an importer. It is expected that Vietnam will import about 17 million tonnes of coal, accounting for 31 per cent of coal demand for development in 2020. According to earlier plans in 2016, Vinacomin will produce and consume about 36 million tonnes of coal. But so far, Vinacomin plans to reduce output to 33 million tonnes in 2016.

 

Mr Le Tuan Phong proposed some solutions to address the problem by devising a clean and renewable energy strategy to promote energy saving and efficiency.