Proposals, Recommendations of Vietnam Energy Association (VEA) on solutions to sustainably develop the Vietnam energy sector

 

Vietnam Energy Association (VEA), in his Letter 124/HHNL-BC dated November 25, 2021, proposed, recommended his solutions for sustainable development of Vietnam energy sector with Party, National Assembly, Government and Ministries. 

Performing the social criticism function, Vietnam Energy Association together with EVN, PVN, VINACOMIN, Corporations and domestic/foreign investors, operating in the energy sector have coordinated and discussed carefully the key urgent projects in the revised NPDP 7 (now moving to the NPDP 8) which are behind schedule, need urgent solutions… With that nature, VEA has widely consulted organizations, individuals and units, synthesized and submitted to the competent authority to consider the following contents:  

1.     For behind-schedule projects of EVN, PVN in the revised NPDP 7, not yet been solved, and most of them are 10 years, over 10 years behind the schedule since the date of investment approval: 

-       EVN’s Coal-fired power projects include: Quảng Trạch I, II (total capacity of 2,400MW), the capital has been arranged successfully but slow execution, EVN is kindly requested to speed up the progress. The Block B - O Mon gas power chain project has lasted for more than 20 years, many obstacles have been removed. However, the key obstacles in Decree on usage of Japanese ODA should be promptly submitted to Prime Minister for promulgation of newly revised Decree to completely solve difficulties and build power plants in synchronization with the taking of gas to shore by 2025. For enlargement projects of hydropower plants such as Hòa Bình, Trị An, Hàm Thuận-Đa Mi, EVN needs to speed up their progresses. For pump storage project of Bac Ai, this is a very important project. It relates to stabilization and synchronization of power source of solar and wind into grid, EVN needs to overcome difficulties and speed up progress to complete the project by 2028. 

-       PVN’s projects include: Chain of Cá Voi Xanh (Blue Whale) gas field projects; EVN’s Dung Quất I, II gas turbine thermal power plants but in relation to gas source of Cá Voi Xanh gas field; Chain of Block B-Ô Môn III, IV gas projects of EVN but related to gas source of PVN. Government is kindly requested to have prompt directions to PVN and other related parties to help those projects into due execution. 

2.     For amendment, supplementation of Law on Oil and Gas: it is requested to supplement regulations for PVN, for PVN’s roles in oil and gas operation and maximumly decentralize authority to PVN; study to revise policy, encourage to invest into oil and gas sector in condition that the oil and gas exploration and exploitation in Vietnam is now not attractive to foreign investors.  

3.     Policy on development of power and energy price: to ensure the energy security up to 2030, Vietnam needs to maintain a suitable rate of coal power among electricity structures. Vietnam had committed to obtain “zero emission” by 2050 at COP26. Therefore, the Government should consider only investing in new coal-fired power sources when using advanced technologies to reduce CO2 emissions. Orientation to 2045 - 2050 will convert some power plants using imported LNG to using "green" Hydrogen, derived from renewable energy. For power price, according to NPDP8 the electricity price implemented from 11.4 Uscents/kWh by 2030 will affect the input of the manufacturing industries and affect the payment burden of the people. An efficient competitive electricity market should be completed soon so that the electricity price reflects the market rules, and at the same time, the electricity price encourages domestic and foreign investors to participate in Vietnam's electricity market.  

4.     For renewable energy: Vietnam is a tropical country with long beach of 3,200km, not deep seabed, a lot of seaports, advantageous for development of onshore and offshore wind power. According to evaluation of WB and ADB, many countries focused on taking the offshore wind power as a key axe to develop the renewable energy, as only the offshore wind power generates a mega power source which could replace the fossil energies (coal-fired power, LNG,…). According to calculations of ThangLong Wind Power Project (invested by Enterprize Energy Group) with a capacity of 3,400MW; annual electricity output can reach 14 - 15 billion kWh, equivalent to both Quang Trach I and II thermal power plants (each with a capacity of 1,200MW). That means offshore wind can replace fossil energy. Not only that, Thang Long Wind project also uses electricity from offshore turbines to produce Hydrogen and Ammonia (NH3) gas for both export and domestic use, which is very beneficial for socio-economic development. 

5.     Capital arrangement for power projects in NPDP 8: The capital demand needed to invest in power source and grid projects in the 2021-2030 period is up to 99.3 - 116 billion USD, each year need 10 billion - 11.6 billion USD. This is an extremely huge amount of financial source, it should be treated with a special mechanism by Party, State, Government to support investors. 

6.     Domestic manufacture of electrical equipment: Government should soonly have instructions to domestic and foreign investors to coordinate in building factories and industrial parks, creating equipment and supplies for the electricity industry, reducing the annual cost of imported foreign currency, annually saving the country hundreds of billions of dollars.  

7.     Recommendations to the Party, State, National Assembly, Government, Ministries and branches to consider and resolve the following issues:

-       It is necessary to have positive solutions to completely solve the projects in the revised NPDP 7 that have now been converted to the NPDP 8, which has been extended for many years, to be put into operation before 2030.

-       It is necessary to have specific mechanisms for key energy projects, such as: Government guarantees, foreign loans, market expansion, removal of barriers, foresight, etc. to overcome the shortage of capital. 

-       Boldly grant investment licenses to projects that have clearly shown their effectiveness, such as offshore wind power (ThangLong Wind); planning LNG projects in accordance with concentrated loads, in the area near seaports to facilitate LNG import.  

-       In NPDP 8, projects need to be prioritized according to concentrated load areas to avoid building transmission lines, which is costly for the State, especially ground-mounting solar power. 

-       Regarding electricity and energy prices, according to NPDP 8, it is necessary to develop a mechanism for electricity and energy prices close to the market in order to encourage domestic and foreign investors to actively and effectively participate in the energy market.  

The role of Ministries and sectors, especially the Ministry of Industry and Trade, directly give directions to the electricity and energy sectors. It is necessary to closely advise the Government and the central party to find positive solutions to solve difficulties for electricity and energy projects