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Jul 23, 2020 / 10:00

Vietnam gov’t to clear hurdles to energy development

Vietnam needs US$7 – 10 billion for new energy projects each year.

The Vietnamese government will continue drafting action plans, mechanisms and policies to materialize views and orientations stated in the Politburo-approved Resolution No.55 on the development of Vietnam’s energy industry, said Nguyen Van Binh, head of the Party Central Committee’s Economic Commission at the Vietnam Energy Summit 2020 on July 22.

 Nguyen Van Binh, Head of the Party Central Committee’s Economic Commission, addresses the Vietnam Energy Summit 2020, Hanoi, July 22, 2020. Photo: Viet Tuan

The Vietnam Energy Summit 2020 with a theme “Orientation of Vietnam’s national energy development strategy to 2030, vision to 2045” was held in Hanoi on July 22.

Delivering his opening remarks at the summit, Deputy Prime Minister Trinh Dinh Dung stated that Vietnam’s energy industry faced challenges arising from the depletion of primary material sources such as coal and gas, which would aggravate the country’s dependence on other countries for supply.

Besides, infrastructure for developing energy is still limited, the technology level is low and many large coal-fired plants projects in the National Power Development Plan VII have lagged behind the schedule due to the shortage of capital and environmental issues, Dung added.

Resolution 55, issued in February 2020, sets up perspectives, goals and solutions for Vietnam’s energy development in the direction of efficiency, sustainability and stability, contributing to improving the competitiveness of the economy.

Five issues need addressing

Speaking at the forum, Binh affirmed that Resolution 55 would create a breakthrough for the national energy industry, of which the use of renewables, clean and new energy is a priority. 

He also requested participants at the summit to focus on discussing and clarifying a number of issues such as definition of tasks in each period to put into practice the Party’s leadership stated in Resolution 55; specific proposals to improve institutions for the development of the energy sector based on the Resolution; and breakthrough mechanisms and policies for successful energy transmission.

He also mentioned asked for insight solutions to create favorable conditions for the private sector to invest in the energy industry in general and electricity transmission in particular. 

The summit also focused on strategic issues to create mechanisms and policies to build some clean and renewable energy hubs in regions and localities having advantages in these resources.

At the event, delegates were expected to point out international experiences in models, mechanisms, policies and breakthrough technology solutions in energy transition towards sustainable development, according to Binh.

Goals for 2030

 Five memorandums of understanding (MOUs) were signed for cooperation on investment in the renewable energy industry. Photo: Viet Tuan

Regarding the mobilization of resources for energy development, by 2025, Vietnam needs US$7 – 10 billion for new projects each year, and to invest heavily in electricity and transmission, Deputy Prime Minister Dung said.

To meet the growth target of 8% by 2030, the government estimates that the power capacity needs to increase from the current 42GW to 60GW in 2020 and 100GW by 2030, according to a World Bank report. As such, Vietnam needs another 5GW capacity to be installed each year in the 2018-2030 period, which poses technical, managerial and financial challenges.

From now to 2030, the Vietnam’s electricity industry needs to invest about US$8-12 billion each year, higher than annual average of US$8 billion in the past, says the WB report. The industry needs to shift its investment to renewable energy, thermal power and grid infrastructure.

Within the framework of the forum, five memorandums of understanding (MOUs) were signed for cooperation on investment, research and development of LNG as well as offshore wind power projects in the central provinces of Ninh Thuan, Binh Thuan and Thua Thien-Hue, local banks, investors, manufacturing contractors, with the total estimated value of over US$20 billion.