Vietnam’s dilemma: clean electricity or energy security?

By Minh Son, Nguyen Hoai   January 17, 2019 | 11:17 pm PT
Vietnam’s dilemma: clean electricity or energy security?
An electrician checks electric cables in Hanoi. Photo by VnExpress/Thu Ngan
The debate between cheap, polluting energy from coal and expensive, environment-friendly renewable energy was on the agenda at an economic forum.

Opening a seminar at the 2019 Vietnam Economic Forum in Hanoi Thursday, Nguyen Van Binh, chairman of the Communist Party's Central Economic Commission, stressed the need for Vietnam to address the challenges brought about by climate change.

"If we don't effectively respond to climate change, the achievements of our socio-economic development will be damaged and the process of sustainable development will encounter many difficulties."

As a country with a long coastline and many large river basins, Vietnam is considered among the five countries most affected by climate change. 

The impacts of climate change would accelerate resource depletion and environmental degradation and slow down the country's socio-economic development, Binh said.

While renewable energy is environmentally friendly, its sources are still unstable, potentially endangering energy security, while traditional energy sources such as coal help ensure energy security but contribute to the greenhouse effect, a major factor in causing climate change.

John Kerry, former U.S. Secretary of State and a visiting distinguished statesman at the Carnegie Endowment for International Peace, agreed that with its energy requirements growing rapidly Vietnam needs to consider and implement solutions to remain proactive with its energy supply.

But he warned that Vietnam's use of traditional energy sources, especially coal, is a contributor to climate change.

Vietnam's 75 percent increase in coal use in the past five years is something that needs to be changed, and the country must look to cleaner, renewable energy sources, he said.

The coal era will not end because of coal being used up, but will end because of the discovery of better, cleaner solution, he noted.

But a complete replacement of coal energy or a complete switch to renewable energy has proven to be a tough challenge for Vietnam.

According to statistics released by the Ministry of Industry and Trade, energy demand increased by 10.35 percent last year, putting great pressure on authorities to find additional energy sources. 

The major solar and wind power projects are concentrated in a few areas in the south-central region. While these projects are quickly increasing in size, their high concentration has put pressure on the local power grids, reducing their efficiency.

Furthermore, European Union representative Bruno Angelet, said: " Coal might seem cheaper than gas, but if we include external costs and subsidies, it is no longer the case. What Vietnam should urgently consider is to increase carbon taxes, not only on fuel but also on coal. It should move away direct and indirect subsidies on coal and move them to gas and renewables."

Binh said taking this into consideration Vietnam needs to research and develop appropriate energy security strategies.

"We need to recognize and correctly evaluate the effects of these two aspects to develop appropriate policies to proactively respond to climate change and strengthen national energy security."

Vietnam currently relies largely on hydropower and thermal power for its electricity needs. But its hydropower potential is almost fully exploited and its oil and gas reserves are running low, raising concerns about possible power shortages in the coming years.

However, Prime Minister Nguyen Xuan Phuc allayed these concerns saying the government would not let the ministry or Vietnam Electricity cut power supply, warning that "whoever cuts power will be fired immediately."

The electricity industry has pledged to meet electricity requirements by making full use of hydropower and domestic coal and gas sources besides importing coal and building new power plants on schedule.

Phuc said Vietnam's surge by 37 places in the World Bank's 2018 electricity access index was impressive and called the power sector to continue rising up this index.

World Bank country director for Vietnam Ousmane Dione said at a recent forum that Vietnam would need to raise $150 billion by 2030 to develop its energy sector with electricity demand growing by around 8 percent a year over the next decade.

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