One step forward, two steps back: Vietnam's short-sighted energy vision

I choose to talk about Germany because most of the feed-in-tariff policies for Vietnam's renewable energy have been designed using the German model and built with consultation from the Deutshe Gesellschaftür Internationale Zusammenarbeit (GIZ) or German Corporation for International Cooperation, an agency that provides services in the field of international development cooperation.

30 years ago, Germany issued the FIT policy for the first time to boost the selling of renewable electricity to the national grid. In the beginning, when the proportion of wind and solar power output made up just less than 0.1 percent of the nation's total, there were already worries about renewable energy threatening safety and stability of the national power grid.

Back then, a group of power companies in Germany had released a joint statement creating pressure on the government, saying that renewable energy from solar, wind and hydropower plants should not exceed 4 percent of the total power output, even in the long run.

For decades, many entities in Germany had advocated thermal and nuclear power, and kept calling for delays in expanding the national power grid and delivering cautions on clean energy.

But the people of Germany had said yes big time to clean energy. Their voice, luckily, had been heard, and the government had listened to them with a long-time view, adopting consistent policies with transparency and integrity.

These days, wind farms and villages full of rooftop solar panels have become German icons. Even tours to villages famous for renewable energy production have become signature treat. In 2018, wind and solar power output made up 26 percent of Germany's total power production.

Vietnam stands among nations that have learned from Germany's experience in building their own clean energy development model.

However, until now, solar power has remained a back-up plan in the nation's power grid expansion.

According to Vietnam's 8th National Power Development Plan, which is being drafted, thermal power output will rise to nearly 9,100 MW, but that of solar power stays at just 600 MW in the next five years.

As Vietnam’s solar power capacity rises, there have been opinions that such increases could make it difficult to ensure stable power distribution nationwide. In 2020 alone, Vietnam's installed rooftop solar photovoltaic capacity reached 8,900 MW, which means we need only 25 days or so to realize the solar power output target set for five years in the 8th National Power Development Plan.

In a report in January, national utility Vietnam Electricity (EVN) said that the nature of solar power capacity, which accounts for 25 percent of the total, is to produce high volumes during the day and no production in the evening and that this poses difficulties in operating the national grid. There have been times when the grid was oversupplied during the low-demand hours between 10 a.m. and 2 p.m. when solar radiation is at peak, the report said.

Barking up the wrong tree

I am concerned about the idea that solar power is causing difficulties for the operation of the national grid. The only issue that should be discussed is the delay in making investments to improve the grid.

Adopting a positive perspective, the situation in which power consumption dropped too low during the Lunar New Year holiday in mid-February that it caused oversupply on the power grid should be seen as a reminder that it is high time we have a solution to regulate the system and operate the electricity market in a more flexible way so that it can adapt to rapid changes in the structure of power sources.

The highest daily power consumption output of the whole national electricity system stayed at just 22,800 megawatts during the seven-day Tet break, with daily consumption hovering around 418 million kWh.

Compared to the week before the latest week-long Tet holiday, power consumption was about 27 percent lower per day and 32 percent lower for the week in total.

The Ministry of Industry and Trade has said that total output from solar and wind sources is expected to reach 23.4 billion kWh this year, accounting for 8.9 percent of the national electricity production.

In a 2014 study, the International Energy Agency (IEA) said that if wind and solar power make up 10 percent of the total output, the figure is insignificant and should not affect the stability of the entire system. This has proven true in Denmark, Ireland, Germany, Spain, Portugal, Sweden and the U.K.

And offshore wind farm in Vietnam's southern province of Bac Lieu, May 2020. Photo by VnExpress/Nguyet Nhi.

The fact that we are late climbers on to the renewable energy bandwagon and continue to express reservations and hesitation in exploiting solar and wind energy (which Vietnam has in abundance) will indirectly boost growth in the types of energy that damage the environment severely, like thermal and hydropower plants.

In central Vietnam, the Ho Ho hydropower plant contributed to the floods that killed 24 people and left nine others missing in Ha Tinh Province in 2016. In the latest incident that happened October last year, 11 workers of the Rao Trang 3 hydropower plant in Thua Thien-Hue Province are still listed as missing after about half of a hill collapsed on to the camping areas and operation facilities of the plant, burying 17 workers. The bodies of six workers were retrieved from the bed of the river that has as many as four hydropower projects along a 25 km section.

The air pollution caused by coal-fired power plants via the fine dust released into the atmosphere is well known all over the world now.

The power paradox

On top of that, the power paradox that has existed for long in Vietnam is exacerbating a socioeconomic problem. As a 2020 World Bank report noted: "Electricity has become relatively expensive for Vietnamese households, while industrial tariffs are low by regional standards. Vietnamese consumers are sensitive to electricity tariffs and increases. Industrial users, in contrast, enjoy electricity tariffs that are on average lower than households and remain at one of the lowest levels in Asia...." It adds that the industrial tariff structure does differentiate between peak and non-peak power.

After all this, it still remains an issue for Vietnam's power grid to ensure stability when the dry season is at its peak with heat waves and demand for power consumption via the use of air-conditioning surges.

All the problems mentioned above can be solved by developing green energy. That is the path Germany and many other nations have chosen so that their people have access to clean, safe, stable and affordable sources of energy.

Another IEA report has said that the proportion of solar and wind power in the total power output of the national grid could exceed more than 30 percent at an affordable investment cost if due improvements are made in policies, management systems, operations, and planning.

Research by the U.S.'s National Renewable Energy Laboratory (NREL) has also concluded that it is possible to have solar and wind power make up 25 percent of the total output on the national grid with just technical and managerial solutions, and that investing in a more flexible system to support the grid is only really necessary when the ratio of clean electricity output to the grid is more than 25 percent. In this instance, storage batteries can be dealt with as a last resort.

Therefore, the argument that it is impossible to send a high proportion of solar or wind power to the grid because there is no storage battery is not completely true.

As a temperate country with solar power potential far behind Vietnam, Canada has still made efforts to tap this renewable source. Last year, the agency I worked for, an education department in the metropolitan region of Vancouver, donated $25,000 to test a rooftop solar system for a school. Despite being the warmest place in Canada, the intensity of solar radiation in this area is less than three-quarters of the average level in Vietnam.

With high investment and relatively low output, this system would take 25 years to break even if the electricity is sold to the grid. But my agency decided to go ahead with it. That project is a model of a bigger plan worth up to $50 million we're working on to install rooftop solar PV for all eight schools in the area.

There are three main reasons for the above decision. First, using solar power will help realize the target of reducing 50 percent of greenhouse gas emissions by 2030 that my agency must comply with. Currently, most emissions in buildings come from burning cheap natural gas to operate the heating system. The goal of reducing emissions will be achieved by converting 50 percent of the heating system from gas to electricity.

Second, in addition to accounting for the additional electricity when switching to the heating system, rooftop solar power will reduce the heavy dependence on the national grid, limiting the risks of electricity price hikes.

Third, a solar power system in schools is the most practical and intuitive lesson for the next generation about the importance of clean energy and sustainable development. It is an invisible social benefit that is easier for students to absorb than theoretical lectures or slogans about environmental protection.

With a precious and almost endless source of solar and wind energy, clean power is the solution for Vietnam to reinforce three pillars of sustainable development: economy, society and environment.

I think that the energy transition should not be understood only as changing the structure of the energy sources. It must be a comprehensive transformation including sources, a regulated power system, transmission network, distribution and consumption.

For this transition, digitizing the entire electrical system is a vital requirement to optimize its operations. Also, the transition will not be successful without long-term, consistent, transparent and fair policies.

The lack of a well thought out strategy and a focus on large scale planning has been main factors for Vietnam’s failures in the energy sector.

Will we learn from our experience and that of others to make the best of the endless source of clean energy that we have?

This depends on the vision of those who run the nation.

*Nguyen Dang Anh Thi is an expert on environment and energy. The opinions expressed are his own.