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VIETNAM NEWS

Renewable energy’s difficult birth

10/11/2010 09:47:00 PM (GMT+7)

While the demand for energy is rising dramatically in Vietnam, development of renewable energy is still in its infancy and faces big obstacles.

According to the Ministry of Planning and Investment, Vietnam’s demand for primary energy rose by 2.56 times from 1989 to 2008. Electricity demand rose 10.7 times. Virtually all was produced from traditional energy sources like coal, oil, natural gas and hydropower.

Foreseeing a day when demand outstrips existing resources, the Government is turning its attention, at last, to renewable energy sources like wind and solar power, and to more efficient consumption, reports the HCM City journal Thanh Nien.

“The state encourages the development and use of new and renewable energy resources through assisting projects to research, manufacturing and building models of new and renewable energies; exempting taxes for the import, manufacture and transport of new energy resources, equipment and technologies,” said Deputy PM Hoang Trung Hai.

In the nearer term, the biggest savings can be harvested from the introduction of more efficient technologies. Energy use in Vietnam is inefficient, even when measured against regional neighbors like Thailand or Malaysia. Deputy Minister of Planning and Investment Nguyen Bich Dat says that technologies to exploit, transform and use energy in Vietnam are being upgraded but they are still at low level. Much equipment still in use dates from the 1970’s. Losses in energy transmission have been reduced from 20 percent in 1995 to a still high 9.35 percent in 2008.

Eight renewable energy resources

According to Tran Viet Ngai, chairman of the Energy Association (VEA) counts eight renewable power resources that can be exploited in Vietnam: small-scale hydropower, wind and solar energy, biofuels and biomass, geothermal and tidal energy, and, last, energy from urban and industrial waste.

There’s particularly strong potential for wind power development, because in many locations there’s a steady breeze in the six to ten meters per second range.

The sun is out seventy percent of the time, making solar energy viable especially on islands and in remote areas.

There are exploitable geothermal sources in Hoa Binh and Khanh Hoa provinces especially.

“Biomass (straw, rice husk, sugar-cane dregs, etc.) and biogas (from digestion of livestock feces) can be huge energy producers for the seventy percent of Vietnam’s population who are farmers. Since 2003, the Ministry of Agriculture and Rural Development, in cooperation with the Dutch foreign aid program, SNV, have helped nearly 100,000 families to build and use biodigesters to produce gas for use on their farms.

Vietnam Institute for Science and Technology expert Bui Huy Phung estimates Vietnam’s exploitable small hydropower potential to be 4000 MW (the equivalent of four large coal-burning power plants) and wind power from 8700 to a huge 100,000 MW. Tidal energy sources could also generate over 100 MW, Phung says, and geothermal sources up to 400 MW.

The only forms of renewable energy currently in commercial use in Vietnam are the aforementioned biodigesters, hydro-power and, on a very small scale, solar and wind energy. Current official projections are that power from renewable sources will supply eleven percent of the nation’s energy needs by 2050.

Wind power’s difficult start-up

Up to 2009, Vietnam had only one wind power plant, five turbines installed by the Vietnam Renewable Power JS Co. (REVN) in Tuy Phong district, Binh Thuan. By late 2009, this project had contributed 7.5 MW to the national power grid. REVN plans to have 20 wind turbines operating by 2015, with a total output of 120 MW.

Coastal areas of Binh Thuan and neighboring Ninh Thuan provinces are considered ideal for wind power generation. So far, Binh Thuan has approved the wind power project proposals of nine investors. The investors plan ten projects with a total registered capacity of 1,511 MW, using around 13,000 hectares of land.

However, because these projects are located in areas with black sand (a source of titanium), in August, 2008, the Resources and Environment Ministry (MoNRE) put a hold on wind power development until it is determined whether the titanium deposits can be commercially developed.

Binh Thuan Chairman Huynh Tuan Thanh said that the MoNRE decision is a setback that has strongly affected investors’ determination. Though most of the wind power projects have completed the survey and research phases and the REVN project has shown their technical feasibility, Binh Thuan can’t licence them yet.

The wind power projects face other big difficulties, too.

The ‘up-front’ investment cost is high, substantially more per kilowatt-hour (kWh) of capacity than for hydro or thermal power. Most of the equipment the REVN’s project was imported from Germany. REVN invested more than 817 billion dong in the five turbines. It also had to import huge cranes to erect the turbine towers and contract with foreign experts to direct installation of the equipment and teach operating techniques.

Using current technology, the cost of generating one kWh of wind power is at least ten US cents (about 2000 dong). Until now, the national electricity monopoly, EVN, has refused to consider paying more than five cents/kWh, claiming that it is unable to pass on the cost to consumers. In this circumstance, banks are understandably not enthusiastic about financing wind power projects.

It remains to be seen whether and how the central government will intervene to create a market for windpower and other start-up alternative energy technologies.

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