PANORAMA OF ENERGY SECTOR IN VIETNAM Presented by Prof. LE CHI HIEP - Vice President, Vietnam Association of Refrigeration & Air Conditioning Eng. - Head, Dept. of Heat & Refrigeration Eng., Ho Chi Minh City University of Technology TOKYO, 13 October 2006

Contents 1. General Introduction. 2. Panorama of Energy Supply and Consumption. 3. Energy Demand. 4. Renewable Energy Potential & Activities. 5. Energy Efficiency Activities 6. Conclusion.

1. GENERAL INTRODUCTION

VIETNAM Population – 83.5 millions Area – 332,000km 2 Capital – Hanoi

2. PANORAMA OF ENERGY SUPPLY & CONSUMPTION Vietnam economy has expanded rapidly in recent years: Growing 7.7% in 2004 (real gross domestic product – GDP). Growing 8.4% in % in 2006 (Forecast).

2.1.Oil Vietnam has 600 million barrels of proven oil reserves. Crude oil production averaged 370,000 barrels/day in 2005, down somewhat from the 403,000 barrels/day in Vietnam remains reliant on imports of petroleum products due to a lack of refining capacity. Vietnam had net exports of 111,000 barrels/day of oil in 2005 (mainly to Japan, South Korea and Singapore).

REFINING Vietnam is in the process of building its first refinery. The $1.5 billion DUNG QUAT refinery (Quang Ngai province) will have a crude distillation capacity of approximately 140,000 barrels/day. A second refinery project is under consideration at NGHI SON (Thanh Hoa province) with the capacity of approximately 150,000 barrels/day.

2.2. Natural Gas Vietnam has proven gas reserves of 6.8 trillion cubic feet. Vietnam’s natural gas production and consumption have been rising rapidly since the late 1990s. Natural gas is currently produced entirely for domestic consumption. The largest Vietnamese natural gas production area is located in southern Vietnam.

2.3. Coal Vietnam contains coal reserves estimated at 165 million short tons, the majority of which is anthracite. Vietnam produced over 18 million short tons of coal in 2003 (In 2003, Vietnam exported 7 million short tons of coal, primarily to China and Japan). Although Vietnam has historically relied on hydropower, it has recently promoted the construction of coal-fired power plants.

Coal-fired power plants are expected to eventually account for 25% of Vietnam’s total electricity production. The Vietnamese government estimates that 10.2 million short tons of coal is needed per year to meet increasing domestic demand, projected at 20,000 MW by Vietnam continues to exploit new coal reserves within its borders. In March 2003, a significant coal bed was discovered in Red river delta region of northern Vietnam.

2.4. Electricity Although Vietnam’s per capita electricity consumption is among the lowest in Asia, demand has risen in recent years. In 2003, Vietnam had a total electric generating capacity of 8.8 gigawatts and generated 39.7 billion kilowatt-hours (kWh) of electricity, of which 52% was hydropower.

Electricity demand in Vietnam is forecasted to grow 15 percent per year until Vietnam currently buys power from China to prevent shortages in the North, and plans to begin purchasing from Laos in In order to meet increased demand, construction of expansion is planned for 32 power stations (7,547 MW) before Vietnam currently has five hydroelectric expansions underway, in which The SON LA project (2,400 MW – by 2012) will be the largest hydroelectric project in Vietnam when completed.

*The SON LA project: 2,400 MW – by 2012.

ENERGY SUMMARY Proven Oil Reserves (2006) 0.6 billion barrels Oil Production (2005)366.4 thousand barrels per day (100% was crude oil) Oil Consumption (2005)259.4 thousand barrels per day Net Oil Exports67 thousand barrels per day Crude Oil Distillation Capacity (2006) None

Proven Natural Gas Reserves (2006) 6.8 trillion cubic feet Natural Gas Production (2003) 0.1 trillion cubic feet Natural Gas Consumption (2003) 95.4 billion cubic feet Recoverable Coal Reserves (2003) million short tons Coal Production (2003)17.6 million short tons Coal Consumption (2003) 10.4 million short tons

Electricity Installed Capacity (2003) 8.7 gigawatts Electricity Production (2003) 39.7 billion kilowatt- hours Electricity Consumption (2003) 36.9 billion kilowatt- hours Total Energy Consumption (2003) 1 quadrillion Btus, of which oil (46%), coal (22%), hydroelectricity (22%), natural gas (10%). Total Per Capita Energy Consumption (2003) 12.1 million Btus.

3. ENERGY DEMAND In industry sector, from 2020 – 2050, energy demand is expected to increase from 24% - 42%. Electricity demand in Vietnam is forecasted to grow 15 percent per year until Coal consumption is expected to decrease from 51% to 26% (total energy consumption). Natural gas demand is expected to increase 10%/year (2010 – 2020).

4. RENEWABLE ENERGY ACTIVITIES

4.1. Mini Hydropower Capacity200W – 10kW Site120,000 Total estimated capacity20MW Electricity supply65*10 6 – 120*10 6 kWh / year supplied to around 130,000 families

4.2. Natural Hot Water Site200 Water temperature40 o C – 100 o C

4.3. Agricultural Residues Rice husking siteMore than 100,000 (in Mekong Delta) – in which there are around 50 sites with capacity more than 5tons/h. Sugar-cane residuesEnough to operate thermal power stations with total capacity around 250MW. Biogas / BiomassHigh potential, especially in Mekong & Red river Delta

4.4. Solar Energy Cold season – 3 to 4.5 kWh/m 2 /day Hot season – 4.5 to 6.5 kWh/m 2 /day

Photovoltaic No related industry. Installed capacity: around 3,000 systems (500Wp – 1,500Wp) with total capacity less than one MWp.

Solar Hot Water Nearly no related industry. High attraction, especially in southern Vietnam. Demand is increasing. The number of companies referring to solar hot water is also increasing, especially in Ho Chi Minh city.

4.5. Wind Energy Islands: 860 – 1410 kWh/m 2 /year Coastal areas: 800 – 1000 kWh/m 2 /year Mainland: 500 – 800 kWh/m 2 /year

Based on a World Bank-AAEP study, there are good to excellent wind resource areas for large-scale wind generation that can be found in the mountains of central and southern Vietnam. Furthermore, coastal areas of southern and south-central Vietnam show exceptional promise for wind energy both because of strong winds and their proximity to population centers. On a land area basis, around 28,000 sq km of Vietnam (8.6% of the total land area) experience good to excellent winds.

WIND ENERGY POTENTIAL greenippnetwork.net/dsp_page.cfm?view=page&select=97 POOR <6m/s FAIR 6-7m/s GOOD 7-8m/s VERY GOOD 8-9m/s Excellent >9m/s Land area (sq.km) % of total land area 60.60%30.80%7.90%0.70%NA Potential, MW NA

Installed capacity: nearly 1MW at Bach Long Vi, Hai Phong and other small wind generators and wind pumping. VIETNAM WIND POWER JOINT STOCK COMPANY, founded officially in September 2001

PROJECTS scheduled by Vietnam Wind Power Joint Stock Company Pilot wind power turbine (0.9MW) Do Son Beach, Hai Phong city (Owner) Phuong Mai 3 wind power plant (50.4MW) Binh Dinh Province (Owner) Phuong Mai 1 wind power plant (15MW) Binh Dinh province (Partner) Pha Rung wind power plant (20MW) Hai Phong city (Owner)

RESEARCH on renewable energy Solar energy - Refrigeration & Air Conditioning - Dryer - Distillation Biodiesel Biomass & Biogas

5. ENERGY EFFICIENCY ACTIVITIES Recently, activities of energy efficiency have been promoted in Vietnam. The promotion has come from central and local governmental agencies, from press, from universities, as well as from scientists and others. But, industry owners and end users have not yet paid enough their attention to the problem.

WHY??? There may be many reasons. But, the main reasons are: - Hesitance of technology update. - The lack of investment. - The lack of knowledge. - The lack of appropriate policies coming from government such as financial support, tax,...

Anyway, in the past few years there have been several good results on these activities, especially in Ho Chi Minh City and in Hanoi. Currently, the activities of energy efficiency in Vietnam are mainly promoted by: * Ministry of Science and Technology. * Ministry of Industry. * Vietnam National University-Ho Chi Minh City (Ho Chi Minh City University of Technology is one of its members). * Department of Science & Technology, Ho Chi Minh City.

6. CONCLUSION In the near future, Vietnam may satisfy its energy demand by itself (oil & gas) and may continue to export not only crude oil, but also refined oil. The energy efficiency activities have been promoted in Vietnam. Currently, the activities of renewable energy and energy conservation get the great attention of the community in Vietnam.

Vietnam needs foreign direct investments to develop energy sector in general as well as renewable energy sector in particular. Vietnam – high potential market for renewable energy equipments, especially for solar energy equipments.

But, saying about energy balance, the percentage of renewable energy to the total energy supply of the country is still nearly zero. Up to now, in Vietnam, there is no any industry related to renewable energy.

THE LACK OF APPROPRIATE POLICIES (financial support, tax,…) is considered as the main reason causing this problem.

Hopefully, the situation could be improved very soon.

THANK YOU FOR YOUR ATTENTION Have a nice day!!!