RENEWABLE ENERGY IN VIETNAM Prof. Dr. Le Chi Hiep Chairman, Energy Council (VNU-HCM) lechihiep@vnuhcm.edu.vn lechihiep@gmail.com THE WORKSHOP OF ODA UNESCO PROJECT FOR PROMOTION OF ENERGY SCIENCE EDUCATION FOR SUSTAINABLE DEVELOPMENT IN ASIA (VIETNAM) Hanoi, 30 – 31 May 2011

OUTLINE 1. BRIEF INTRODUCTION - RENEWABLE ENERGY IN VIETNAM, POTENTIAL AND INSTALLED CAPACITY 2. LEGAL FRAMEWORK & NATIONAL POLICY 3. DISCUSSION & CONCLUSION

VIETNAM Population – 85.8 millions (2009) Area – 332,000km2 Capital – Hanoi 3

1. BRIEF INTRODUCTION RENEWABLE ENERGY IN VIETNAM - POTENTIAL AND INSTALLED CAPACITY

Total estimated potential 11.73TWh/year Total generation from small hydro and renewable energy 8.39TWh/year (estimated, in 2025) It means, about 71.52% of the total potential renewable energy is estimated to be utilized for power generation by 2025.

MAIN RENEWABLE ENERGY RESOURCES IN VIETNAM WIND ENERGY SOLAR ENERGY SMALL HYDROPOWER BIOFUEL and BIOMASS GEOTHERMAL ENERGY ENERGY FROM URBAN and INDUSTRIAL WASTE TIDAL ENERGY

1.1. WIND ENERGY World Bank: - Vietnam has higher potential for wind energy development compared to most other countries in Southeast Asia. - Vietnam could produce more than 510 gigawatts of electricity from land-based and off-shore wind farms, 10 times the country's expected national demand in 2020.

Wind Power Potential in Vietnam Wind speed (m/s) 6 - 7 7 - 8 8 - 9 Area (%) 30.8 7.9 0.7 Area (km2) 100,300 25,700 2,200 Potential (GW) 402 103 8.8

BINH THUAN and NINH THUAN are considered as the best territories for wind power development (9%) in Vietnam. Off-shore wind potential is many times greater than that of land-based.

VIETNAM OFF-SHORE WIND POTENTIAL

There are a significant number of foreign investors and Vietnamese companies setting up wind park projects in Vietnam, ranging from 6MW to 150MW. So far, there were 21 wind projects under way that could produce enough electricity to connect to the grid (Binh Thuan, Ninh Thuan and Lam Dong).

In 2010, the total installed wind power capacity was estimated to be 9MW (7.5MW of which had been connected to the national grid, the remainder were household wind turbines).

SOME INSTALLED WIND POWER SYSTEMS 30kW – Nam Dinh (1999, hybrid system, wind-diesel). 0.8MW – Bach Long Vi Island Binh Thuan Wind power plant: - The project has been developed by the Vietnamese company REVN. - Total power: 120MW - The first five 1.5 MW turbines from the German manufacturer Fuhrländer have been installed in Binh Thuan province at the end of July 2009. 13

SUMMARY – GRID CONNECTED WIND POWER PROJECTS (UNDER IMPLEMENTATION) Phuong Mai (Binh Dinh, 15MW + 21MW): under price negotiation. Ninh Phuoc (Phuoc Minh/Phuoc Nam, Ninh Thuan, first phase: 50MW, second phase: 100MW): project report completed. Ninh Phuoc (An Hai/Phuoc Hai, Ninh Thuan, first phase: 70MW, second phase: 110MW): project report completed. Thuan Bac (Ninh Thuan, 18MW): Investment license granted.

Phuoc Huu (Ninh Phuoc, Ninh Thuan, 50MW): Investment license granted. An Hai/An Phuoc (Ninh Thuan, 60MW): Investment plan approved.

1.2. SOLAR ENERGY Mean Annual Sunshine Hours - North: 1800 – 2100 hours of sunshine a year, on average. - South: 2000 – 2600 hours of sunshine a year, on average.

MONTHLY MEAN SUNSHINE HOURS (Hours/day) Location: HANOI (21o03’N, 105o54’E) January 2.2 February 1.6 March 1.4 April 2.7 May 5.3 June 5.2 July 5.9 August September 5.4 October November 4.2 December 3.5

MONTHLY MEAN SUNSHINE HOURS (Hours/day) Location: DANANG (16o03’N, 108o12’E) January 4.4 February 5.1 March 3.4 April 6.9 May 8.3 June 7.9 July August 6.7 September 5.8 October 4.7 November 4.0 December 3.6

MONTHLY MEAN SUNSHINE HOURS (Hours/day) Location: HOCHIMINH City (10o45’N, 106o41’E) January 7.9 February 8.8 March April 7.7 May 6.3 June 5.7 July 5.8 August 5.6 September 5.4 October 5.9 November 6.7 December 7.2

MONTHLY MEAN SOLAR RADIATION (kWh/m2/day) Location: HANOI (21o03’N, 105o54’E) January 2.24 February 2.40 March 2.53 April 3.46 May 5.23 June 5.31 July 5.59 August 5.10 September 4.79 October 4.18 November 3.45 December 2.97 Annual Mean Solar Radiation: 3.93kWh/m2/day

MONTHLY MEAN SOLAR RADIATION (kWh/m2/day) Location: DANANG (16o03’N, 108o12’E) January 3.5 February 4.3 March 5.2 April 5.8 May 6.4 June 5.9 July 6.5 August 5.7 September October 4.2 November 3.1 December 2.5 Annual Mean Solar Radiation: 4.85kWh/m2/day

MONTHLY MEAN SOLAR RADIATION (kWh/m2/day) Location: NHA TRANG (12o15’N, 109o11’E) January 4.66 February 5.29 March 5.69 April 5.91 May 5.90 June 5.66 July August 5.51 September 4.92 October 4.42 November 4.04 December 4.15 Annual Mean Solar Radiation: 5.15kWh/m2/day

MONTHLY MEAN SOLAR RADIATION (kWh/m2/day) Location: HOCHIMINH City (10o45’N, 106o41’E) January 5.1 February 6.3 March 6.6 April 5.7 May 5.0 June 4.9 July August September 4.8 October 4.5 November 4.3 December 4.6 Annual Mean Solar Radiation: 5.2kWh/m2/day

Solar Applications Two main applications: - Solar hot water - Solar photovoltaics

Solar hot water has been developed since 1990 Solar hot water has been developed since 1990. At the early period, it was very difficult to get the attention of the community. But, since around 1998, the number of installed solar hot water systems has gradually increased, especially in Ho Chi Minh city.

Currently, solar hot water has become one of renewable energy products at high competition. That leads to the increase of the number of companies doing business in this field. But, there is so far nearly no full industry referring to solar hot water. The main components of the system (solar collector,…) are imported, mainly from China.

Solar photovoltaics has been also applied long time ago. But, due to many difficulties, it has not exercised its influence on the society.

In 1990, the first 300Wp-unit was installed at Can Gio district, Ho Chi Minh city. From 1994, solar photovoltaics has been expanded in the whole country. Currently, total installed solar photovoltaics is a little more than 3MWp.

Main features of photovoltaic development in Vietnam: - Most budgets funded by international organizations and several funded by national agencies (there is so far nearly no personal budget invested to set up the system). - It leads to unstable and unsustainable development. - All solar panels are so far imported.

Currently, there are several companies doing business on solar photovoltaics in Vietnam.

RED SUN Long An, near Ho Chi Minh City. By planning, its expected capacity is 3MWp/year (first step) and 5MWp/year (next step). FIRST SOLAR Cu Chi, Ho Chi Minh City. At the end of January 2011, the US First Solar Group was granted a license to build a solar panel factory in Vietnam with a total investment capital of one billion dollars. IC ENERGY Chu Lai, Quang Nam, with a total investment capital of 390 millions dollars (May 2011).

1.3. SMALL HYDROPOWER Yearly average rainfall: 1,860mm. There are more than 2,200 big-to-small rivers and streams. Vietnam is considered as one of rich hydropower resource countries.

Under the existing Vietnam’s regulations, a hydroelectric project of less than 30MW and using 10 hectares is classified as small-scaled. Small hydropower potential (less than 30MW): estimated to be nearly 4000MW.

SMALL HYDROPOWER POTENTIAL Scale, MW 0.1 - 1 1 - 5 5 - 10 10 - 15 15 - 20 Potential, MW 126.8 1,030 1,048 648 563 20 - 25 25 - 30 30 - 35 35 - 40 40 - 50 309 290 135 175 144

INSTALLED SMALL HYDROPOWER Scale, MW 0.1 - 1 1 - 5 5 - 10 10 - 15 Installed capacity, MW 31.5 53.15 45.4 37

CURRENT NUMBER OF SMALL HYDROPOWER STATIONS Scale, MW 0.1 - 1 1 - 5 5 - 10 10 - 15 Number of stations 111 22 5 3

But, the government will put the screws on small hydropower projects because of deforestation and environmental fears, especially flooding.

1.4. BIOFUEL and BIOMASS An urgent need to meet the energy demand of the country. A high priority on investment and exploitation of agricultural waste and its by-products.

- Biodiesel (produced from cassava, - Biodiesel (produced from cassava, coconut, sesame, peanut, flax, jatropha, and from animal products such as catfish fat) has been determined to be strongly promoted.

JATROPHA CURCAS: - Four million hectares of deforested hill are considered to be suitable for growing JATROPHA CURCAS.  

ESPECTED PLAN Biofuel output, including ethanol, would reach 250,000 tons/year by 2015 and 1.8 million tons/year by 2025, meeting 5 percent of the total fuel demand of the country.

PROJECTS Vietnam plans to produce 100,000 tons/year of 5% ethanol blend and 50,000 tons/year of 5% biodiesel blend by 2010, meeting 0,4% of fuel demand. The country has five biofuel plant projects under construction. Three, including an $85 million plant by PetroVietnam, will start producing 240 million liters of 99,7% ethanol a year. The plants will use cassava and sugarcane as feedstock.

A joint Vietnam-Korean bio-diesel production plant was inaugurated in Yeochu city, Kyeonggi province, the Republic of Korea (RoK) on March 23, 2010. - Capacity: 200 tons/year (from waste oil, animal fat, palm and coconut oil – A joint effort between the Vietnam Institute of Industrial Chemistry (VIIC), the Hankyong University and the Korea International Cooperation Agency (KOICA). - Under the deal, Vietnam will receive technology and production lines to build a bio-diesel plant with a projected capacity of 4,000 tons a year.

Three more ethanol plants with capacities 100,000tons/year are being built in the centre and north. “THE FIRST PLANT PRODUCING BIODIESEL FROM CATFISH FAT WAS INAUGURATED IN THE MEKONG DELTA CITY OF CAN THO IN EARLY 2009 (MINH TU CO., LTD). THIS PLANT CAN PRODUCE 50,000 LITERS OF BIODIESEL A DAY”. “REFINERS IN CAN THO AND AN GIANG ARE MAKING BIO-DIESEL FROM CATFISH FAT, THE MEKONG DELTA FACTORIES CURRENTLY PROCESS 30,000 TONS OF CATFISH FAT EACH YEAR”.

“BY THE END OF 2011, VIETNAM WILL HAVE FIVE BIOFUELS PLANTS WITH A TOTAL CAPITAL OF 365,000 TONS OF ETHANOL, WHICH, MIXED WITH GASOLINE, WILL YIELD 7.3 MILLION TONS OF E5 PETROL”. “PETROLIMEX BEGAN SELLING BIO-PETROL (5 PERCENT ETHANOL AND 95 PERCENT PETROL) IN AUGUST AT FILLING STATIONS IN HCM CITY, HANOI, VUNG TAU, HAI PHONG AND HAI DUONG AND WILL ADD SALES POINTS IN DA NANG, HUE AND CAN THO THIS YEAR.  THE BIOPETROL IS OFFERED AT 500 DONG PER LITER LESS THAN NORMAL GAS”.

Biomass, including wood and agricultural residues (rice husk, rice straw, coffee husk, bagasse, sugar cane, coconut residues,…) is widely used for energy production in Vietnam. Currently biomass is considered as a non-commercial energy source, collected and used locally. Potential: 30 - 50 million tons/year, with only 30%-40% currently used for cooking and power generation in sugar mills (150MW).

Potential of biomass for electricity generation Type of biomass Total production, tons/year Estimated electricity power, MW Rice husk 6,000,000 70 - 150 Bagasse 5,000,000 150 - 200 Wood residues 440,000 5 Waste and others 30 - 50

Potential of biomass for electricity generation Type of biomass Total production, tons/year Total available, tons/year Estimated electricity power, MW Rice husk 6,000,000 2,300,000 70 - 150 Bagasse 5,000,000 4,200,000 150 - 200 Wood residues 440,000 5 Waste and others 30 - 50

2. LEGAL FRAMEWORK & NATIONAL POLICY

Legal framework for biofuel production & trading. Nearly completed Highest level of investment incentives. 2007 TWO NATIONAL STANDARDS FOR BIO-ETHANOL AND BIO-DIESEL WERE ISSUED

2008 THE MINISTRY OF INDUSTRY AND TRADE APPROVED PROJECTS TO GROW TREES AS MATERIALS FOR PRODUCING BIOFUELS, TO DEVELOP TECHNOLOGIES FOR PRODUCING BIOFUELS, TO DESIGN PLANS AND POLICIES TO SUPPORT THE DEVELOPMENT OF BIOFUELS IN VIETNAM AND TO TEST AND APPLY ETHANOL PETROL IN VIETNAM.

2008 THE MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT ALSO APPROVED A PROJECT TO RESEARCH AND DEVELOP JATROPHA BUSHES IN VIETNAM. 2007 - 2008 THE MINISTRY OF FINANCE IN 2007 AND 2008 ISSUED TWO CIRCULARS ON STATE FUNDING FOR BIOFUEL DEVELOPMENT PROGRAMS.

2009 THE MINISTRY OF SCIENCE AND TECHNOLOGY ISSUED TWO NATIONAL STANDARDS ON BIOFUELS.

In order to support foreign investors, the Vietnamese Government has determined that renewable energy is a field worthy of investment incentives. Investors can enjoy advantages such as import tax exemption and land fee exemption over a certain period of time. On 2 August 2007 the Vietnamese Government issued decision 130/2007/QD-TTg on financial mechanisms and policies for investment projects implemented in accordance with the Clean Development Mechanism (CDM).

On 4 July 2008 the Ministry of Finance and the Ministry of Nature and Environment jointly issued Joint Circular 58/2008/TTLT-BTC-BTN&MT to guide implementation of the provisions set out in decision 130/2007/QD-TTg.

Decision No.110/2007/QD-TTg, aiming targeting RE of 4051 MW by 2025 Decision No.1855/QD-TTg, it sets up the target with share of RE (3%-2010; 5%-2020)

Decision No. 177/2007: Scheme on Developments of Biofuels up to 2015, with 2025 Vision Decision No. 1855/2007: National Energy Development Strategy up to 2020, with 2050 Vision Decision 158/2008: National Target Program to respond to climate change

On-going DRAFT DECREE ON RENEWABLE ENERGY PROMOTION.

3. DISCUSSION & CONCLUSION

Vietnam is one of good places for applying renewable energy because RE is distributed through-out the country. The government has recognized the important role of RE in economic development of the country.

Although the overall policy is positive and forward thinking, the existing legislative framework in the RE sector is somewhat complex and overlapping  So far there are still difficulties and barriers to develop RE in Vietnam.  There has been no considerable progress in utilizing renewable energy in daily life.

Barriers: - Reasonable policies to encourage foreign and domestic investors. - Favorable power pricing rules, environmental tax (price distortions from existing subsidies and unequal tax burdens between RE and other energy sources, unequal government subsidies and taxes). - Production cost  Technology transfer, upgraded technologies. - Customers (it is still hard to find customers: inadequate information,…).

It should be focused on: - Wind energy - Solar energy - Biofuel: biodiesel & bioethanol Problem: Small hydropower ????

In order to promote the RE applications, all the current difficulties and barriers in policies and finance must be solved and removed by issuing appropriate policies.  DECREE or LAW ON RENEWABLE ENERGY.

POSITIVE SIGNALS But, over the last five years, the RE development in Vietnam has become faster: - WIND FARMS - INVESTMENT PROJECTS ON SOLAR PHOTOVOLTAICS PRODUCTION - BIODIESEL and BIOMETHANOL

Based on current positive signals, we do hope, RE in Vietnam will develop faster in the near future.

In order to wait in front for the coming RE explosion in Vietnam, beside policies we should focus strongly on the training as well to solve the human resources problem.

 CURRICULUM / Related BOOKS

REFERENCES Renewable Energy in Asia: The Vietnam Report, August 2005 http://www.monre.gov.vn/ www.frenchriverland.com/final%20-%20Report%20Hydroelectric%20power%20plant.ppt http://vietnambusiness.asia/axe-to-fall-on-small-hydropower-projects/ http://agmhp.aseanenergy.org/media/documents/2010/10/05/o/v/overview_of_small_hydropower_development_in_vietnam.pdf

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