Energy an ongoing challenge for Vietnam

More than $400 million was spent during the first quarter of this year on importing coal, newly-published figures from the Vietnam Industry and Trade Information Center (VITIC) reveal. Volume increased 1.6 per cent year-on-year and price 90.6 per cent.

Historically, Vietnam has been self-sufficient in coal but this has now changed. It is now transitioning from exporting to importing energy. “Vietnam imported nearly 10 million tons of coal in 2016 and purchased 5 billion kWh of electricity from China in the peak period,” Deputy Minister of Industry and Trade Hoang Quoc Vuong told a recent energy conference.

“While the amount of imported electricity from China is declining, it still stands at around 1 billion kWh,” he added. “Vietnam will also need to import an estimated 17 million tons of coal, equivalent to 31 per cent of demand, to generate electricity to 2020, with the amount to subsequently head further upwards.”

Last November, after years of mulling over costs, feasibility, foreign cooperation, and safety issues, Vietnam pulled away from nuclear power. The two nuclear reactors still on the drawing board would have added 40,000 MW to the national grid but the estimated price tag of $27 billion was too high for a country with a public debt now touching 65 per cent of GDP.

“As far as we understand, the Vietnamese Government is eager to have more renewable energy, but the cost, while coming down, is still relatively high,” he told VET. “The issue for Vietnam is that because it is growing so quickly, it will need to use and access more energy.”

Last month, Prime Minister Nguyen Xuan Phuc issued a long-awaited decision approving the mechanism on the development of solar power projects, Decision No.11/2017, introducing a tariff of $0.0935 per kWh for the purchase of electricity from grid-connected solar power plants. This is higher than the tariff applied to onshore wind power projects of $0.078 per kWh.