DEVELOPMENT OF ENERGY INDUSTRY IN VIETNAM

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1 Energy DEVELOPMENT OF ENERGY INDUSTRY IN VIETNAM Mr. Phạm Trọng Thực, Director of New & Renewable Energy Department HCM City, June 4, 2012

2 Contents I. Overview of Energy Industry in Vietnam II. III. IV. Power Development Planning Strategies of National Energy Development Wind Power Development Existing and Plans

3 I. OVERVIEW OF ENERGY INDUSTRY IN VIETNAM

4 Nguồn năng lượng Việt Nam Energy sources in Vietnam Coal Total estimated coal reserves (anthracite): 5,88 billion tones, in which the reserve of coal types (A + B + C) is around 4,9 billion tones. Gas-Oil potential Total estimated oil and gas: 3,3-4,4 billion m 3 TOE, in which the gas reserve is around 55-60%. Hydropower potential ti and exploitable ability Technical potential of hydropower: ~123 billion kwh, equavalent to 31,000 MW capacity. Eco-technical potential: 18,000-20,000 MW.

5 Energy sources in Vietnam Renewable energy potential Geothermal: technical potential MW Solar: average number of sunny hours ~2000 -:-2500 hours/year, with the radiant energy of ~150kCal/cm 2.year. Theoritical potential estimated of ~43.9 billion TOE/year Wind: -Powerdensity at the island of kwh/m 2.year, - Power density of kwh/m 2.year in the Centre coastal areas of the Centre and South regions and in the Highland - Power density in other areas: less than 500 kwh/m 2.year. Potential of around 1, ,000 MW

6 Energy sources in Vietnam Biomass: - Reserves of firewood and agricultural residues: ~43-46 million TOE/year, in which there are of around 60% firewood (26-27 billion TOE/year), 40% agricultural residues (17-19 billion TOE/year) - Theoritical potential of biogas: ~0.4 million TOE/year, with the exploitable ability of 10%. Uranium potential: Total potential of U3O8 ore in Vietnam: ~ tones, at the middle level of the world

7 Annual energy production Types of energy Unit Year (billion) (planned) Power production kwh Commercial power kwh Coal Tones Crude oil Tones Natural gas m

8 Energy balance and exploitation of primary energy sources

9 II. POWER DEVELOPMENT PLANNING

10 1. Status of power development

11 1. Status of power development Classification of installed capacity and production in 2010

12 2. Prediction of the power demand until 2020 No. Component (GWh) (%) (GWh) (%) (GWh) (%) (GWh) (%) 1 Forest agriculture & fisheries 701,3 0,9 791,8 0,9 1155,3 0,7% 1747,2 0,6 2 Industry & construction 38500,8 50, ,2 51, , 53, , 54,1 3 Commerce & hotel restaurant 3511,7 4,6 4314,9 4,9 9338,99 5,5% 5% 18362,4 6,4 4 Management & residential consumers 30535,4 40, ,1 39, , 35, ,7 32,4 5 Other activities 2797,0 3,7 3412,2 3,9 8862,8 5, ,6 6,5 6 Commercial power Lost in transmission and distribution 8449,6 9, ,9 10, , 9, ,7 8,0 9 Self-use 2613,3 3,0 3130,3 3,1 6953,8 3, ,9 4,0 10 Power production 87109, Pmax (MW)

13 3. Power development planning Specific objectives: Provide sufficient power for domestic demand, power production and import by 2015 are of around billion kwh; billion kwh by 2020; billion kwh by Prioritize the development of renewable energy resources for power production, increasing the percentage of power generated from these resources from 3,5% of total power production by 2010, up to 4,5% and 6,0% in Reduce elasticity it coefficient/gdp i from the current average coefficient of 2.0 to of 1.5 by 2015 and 1.0 by Pushing up the electrification program in those rural, mountainous and island areas to ensure that by 2020 for most of the rural households to have power.

14 3. Power development planning Classification of power production by % 4,50% RE: 4.5% 2,10% 3% 19,60% 46,80% Hydro 10,10% power 6,00% Coal Natural gas RE 14% Nuclear 4% 9,30% Imported 56,40% RE: 6% Hydro power Coal Natural gas RE Nuclear Imported

15 Scenarios of exploitable renewable energy resource until 2030 RE resources Small hydro Biomass Bagasse and rice husk Municipal solid waste Biogas Solar ,8 9, Wind Geothermal Tide Total (MW)

16 III. STRATEGIES OF NATIONAL ENERGY DEVELOPMENT

17 Strategies of national energy development 1. Power Ensure providing sufficient power for socio-economic development. Prioritize development of hydropower, coal thermal and gas thermal. Encourage development of RE power plants. Formulation and development of competitive power market in Vietnam by Study and develop nuclear power plant. Before 2050, nuclear power plant will take account of 15-20% of commercial electricity generation Complete the rural electrification program: 100% rural householdh can access to the grid before 2020 Ensure the sustainable development and reduce the negative impact to the environment

18 Energy development strategy 1. Coal sector Intensify exploitation and investigation deeper coal mine 300m and explore the mine beneath m at Quang Ninh coal mine Encourage local authority to invest in exploring and exploiting coal to meet the local coal requirement. Develop sustainable coal sector to meet the coal requirement for socio-economic development Develop domestic coal market by 2015 The development of the coal sector needs to harmonize with the social, tourism, defensive security development and ecological protection

19 Energy development strategy 2. Petroleum sector Prioritize the development and exploitation of natural gas. Diversifyif investment t and joint-venture t mechanism in exploring and exploiting natural gas mine and constructing gas-turbine power plant Ensure the ability to reserve gas within 45 days before usage day by 2010 and 60 days before usage day by 2020, 90 days before usage dae by 2025 Build oil refinery power plant to gradually meet the domestic demand and upgrade the capacity of these plants to million tons of crude oil before 2020; For the year , build the connection system for gas pipes with the region

20 IV. WIND ENERGY DEVELOPMENT

21 Wind resource assessment (WB Atlas 2011) Wind speed Low < 6m/s Area, km 2 197,34 2 Averag e 6-7m/s 100,36 1 Avg to high 7-8m/s High 8-9m/s Very high >9m/s 25,679 2, %/total area Potential, 401, ,71 8, MW 4 6 Technical No Region Technical potential il wind (MW) potential 1 North 50 (EVN) 2 Central South 855 Total 1785

22 Province Wind Project Development No of Investors No of Project Installed capacity (MW) Status IR IP TD UC IO Ninh Thuận Bình Thuận BR Vũng Tàu Tiền Giang Bến Tre Trà Vinh Sóc Trăng Bạc Liêu Cà Mau Tổng IR Investment report; IP Investment project; TD TKKT; UC under construction; IO in operation

23 Preferential support mechanism to wind energy 1. Decision number 37/2011/QĐ-TTg dated June 29 th, 2011 on support mechanism to wind energy project development in Vietnam Wind power development planning Support mechanism for wind energy development: Responsibility to purchase electricity generated from wind Feed in tariff for grid-connected wind power projects: - Buyer is responsible to buy all electricity it generated from wind power projects at the price equivalent to 7,8 US$ (excluding VAT and will be adjusted with the exchange rate fluctuation VND/USD) - Government will support buyer with 1,0 UScent/kWh via the Environmental Protection Fund (VEPF)

24 Preferential support mechanism to wind energy 1. Decision number 130/2007/QĐ-Ttg dated August 2nd, 2007 on financial policies and mechanism for clean development mechanism projects: products of CDM projects will be sponsored by VEPF 2. Decree number 151/2006/NĐ-CP dated December 20th, 2006 of the government on investment credit and Decree number 106/2008/NĐ-CP September 19th, 2008: wind energy project is in the list of projects which will receive preferential investment credit by the government

25 Wind energy development strategy Wind measurement program: Wind energy development planning Circulars of Ministry of Industry and Trade on wind project development Standardized power purchase agreement for wind power project Study on grid code and grid connection for wind energy

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