Challenges to ensure energy security

Limitations on domestic primary energy supplies make Vietnam increasingly dependent on imported fuels. Picture for illustration.

Many goals have not been achieved

Vietnam's economy has changed dramatically in the past few decades with the shift from an agricultural economy using traditional biomass to an industrial-based economy using the form of modern energy.

According to the Department of Electricity and Renewable Energy (Ministry of Industry and Trade): crude oil, coal, gas, hydropower and non-commercial energy (energy used in daily life such as firewood, agriculture, garbage) are the sources of energy exploited domestically. In recent years, total energy production has been on the rise. The volume of exploited commercial products did not have a significant increase in volume.

Mr. Nguyen Van Thanh, Deputy Director General of the Department of Electricity and Renewable Energy, said that after nearly 10 years of implementation of the National Energy Development Strategy up to 2020, with a vision to 2030, in general, there are positive results under the strategic directions set out.

Specifically, with issues related to socio-economic development such as the growth in energy demand and rural electricity, strategic objectives have been achieved.

Data from the Department of Electricity and Renewable Energy show that: Currently, electricity for economic and social development is guaranteed. In 2017, total electricity production and purchase reached 192.45 billion kWh, an increase of 8.6% compared to 2016; Commercial electricity reached 174.05 billion kWh, an increase of 8.92% compared to 2016. In the period 2011-2015, the total power installed nationwide increased by 12.8% per year, higher than the growth rate of the peak load in the same period is 9.6% per year. In particular, the installed capacity in 2015 reached 39,350 MW (up by 1.8 times compared to 2010), ranking second in ASEAN countries.

However, Mr. Thanh also pointed out that: For issues related to energy system development such as oil reserves, refinery capacity, nuclear power and energy system linkage, the targets are out of reach or no longer appropriate. For example, with the target of refining capacity, the target is about 25-30 million tons of crude oil by 2020. In fact, by 2020, refining capacity can only be about 16.5 million tons. With the target of strategic petroleum reserves, the goal is to ensure that the national strategic petroleum reserves reach 45 days of average consumption in 2010 and 60 days by 2020, but by 2015, the national reserve was 9.5 days and the national reserve system has no stockpile of its own.

In linking the energy system, the strategy also aims to link regional power grids of 500kV line from 2010-2015, linking the regional natural gas system between 2015 and 2020. However, in practice, the sale of electricity with China, Laos and Cambodia is mainly through 220 kV lines. Up to now, Vietnam has not yet implemented the connection of the regional natural gas system.

Depend on import

With high levels of demand for primary energy for socio-economic development and energy security, Vietnam has become a net importer of energy since 2015.

Deputy Minister of Science and Technology Tran Van Tung said that the energy sector is facing complicated and multi-objective problems. On the one hand, the sector needs to meet the growing demand for socio-economic development, and on the other hand, needs to ensure compliance with international commitments on sustainable development, along with the scarcity of energy resources. While new and renewable energy supplies are still in the development stage.

"In the context of rising energy demand, Vietnam has been exploiting its hydropower resources almost completely. The plan to develop atomic energy has halted, so Vietnam has been importing primary energy for power generation,” said Deputy Minister Tran Van Tung.

About this issue, Thanh said, to ensure energy security, Vietnam has been facing many challenges. That is the high level of energy demand that has put pressure on the energy infrastructure, which requires huge capital investment, and in the context of high debt and equitization process is not favorable. In addition, the challenge of environmental impacts of energy supply will be accelerated due to rapidly rising domestic energy demand, coupled with a rapid increase in the share of fuel resources, fossil fuel, especially coal in the power supply structure.

"Notably, the restriction on primary energy supplies in the country has led to increased reliance on imported fuels, especially fuels for electricity generation, as Vietnam became a net importer of energy and the share of imported energy in total primary energy supply increases will have a great impact on national energy security,” Mr. Thanh emphasized.

Promote renewable energy

From the perspective of electricity supply, Mr. Nguyen Van Vy, Vice President of Vietnam Energy Association, said that from now to 2020, Vietnam may not worry about power shortage, but in the period after 2020, the risk of power shortage is quite obvious. This is due to the fact that a series of projects are underway. For example, in the North, the Thai Binh 2 Thermal Power Plant owned by Vietnam National Oil and Gas Group (PVN) is slow. In the South, a number of BOT projects are facing problems in negotiations... All of these factors require state management agencies to reconsider.

“It needs a mechanism to promote the development of renewable energy projects. Focusing on investment for the development of renewable energy projects, including wind power and solar power, after the period 2020, Vietnam will no longer lack electricity. If there is a special mechanism and soon approved, it is estimated that the time for development of solar projects to be put into operation is in just one year”, said Vy.

Vice Minister Tran Van Tung said that one of the important solutions to solve the problem of energy security is to take advantage of the opportunity to further promote the application of energy-using technologies, at the same time, to master new and sustainable technologies such as wind power and solar power. "This is possible with three parties taking action: managers, businesses and scientists. Along with that is the cooperation, technology transfer from developed countries and international energy associations…,” said Mr. Tung.