Vietnam eyes green power, not to sacrifice environment for growth

Environment-friendly coal- and gas-fueled and renewable power plants would make up the mix.

While Vietnam faces "obvious risks of an energy shortage in the coming years ... it will not sacrifice the environment for economic growth," Deputy Prime Minister Trinh Dinh Dung said in a meeting with the state-run Vietnam Electricity (EVN), the country’s largest power producer and monopoly distributor.

Coal-fired power is vital to energy security, but "it must be clean," he noted.

Dung asked EVN to pioneer the use of modern technologies to reduce the environmental footprint of new coal-fired plants and handle the cinder and ash at existing plants.

The country faces difficulty in increasing power generation since it has decided to put nuclear power on hold, many coal-fired plants are behind schedule and renewables could not be developed on a large scale due to "high costs" and transmission limitations.

"Hydro power currently meets 40 percent of the country’s demand, but additional supply is almost impossible.

"Our hydro power plant reservoirs, especially in the central region, are facing a serious water shortage, supply of coal for power development is erratic and gas supply is waning while power station projects for new supplies are being implemented slowly," the deputy prime minister said.

Dung said "EVN must also focus on investing in transmission systems to bolster the development of renewables."

The inadequate transmission system is now a bottleneck slowing down wind and power projects though a dramatically rising number of investors have shown interest in such projects following the recent increase in feed-in-tariffs (FITs).

Dung also instructed the Ministry of Industry and Trade to hasten studies for the country's investment in coal transshipment ports and regasification terminals to support development of gas-fuelled power, and quickly complete negotiations to buy power from overseas.

He also asked EVN and other investors to speed up the delayed construction of major projects like Nhon Trach 3-4, O Mon 3-4, Tan Phuoc, Long Phuc 2-3, Quang Trach, and Quynh Lap.

Vietnamese firms lack the resources for major projects while foreign loans are difficult to get due to government guarantee-related issues.

The regional imbalance in power supply and demand is also a challenge. While the southern region accounts for more than half the demand (the north nearly 40 percent and the central region nearly 10 percent), power is being generated mainly in the north and central region (about 60 percent).

To make it worse, the installation of transmission lines, both the main grid and branches, has been slow and failed to keep up with the pace of power generation, while negotiations to buy electricity from other countries have been going at a snail’s pace.

The installed power capacity is around 48,000 MW. Under the revised Power Development Plan VII, a total of 60,000 MW is expected to be generated by 2020, with coal-fired plants accounting for 42.7 percent followed by hydropower (30.1 percent), gas-fired plants (14.9 percent), and renewables (9.9 percent).

By 2030, the capacity will jump to 129,500 MW, with the ratios of coal and gas-fired power remaining almost unchanged, but renewables doubling to 21 percent.