Vietnam is looking to renewable energy solutions to solve a growing power shortfall which is intensified by the dispute with Beijing over oil and gas reserves in the South China Sea.
Vietnamese electricity demand is growing by about 9 per cent a year while the economy grew by more than 7 per cent last year.
But Vietnam’s Prime Minister Nguyen Xuan Phuc has warned of power outages by 2021 that could threaten the booming economy’s energy-intensive manufacturing sector.
The Chinese challenge to reserves close to the Vietnamese coast is preventing Hanoi from developing lucrative fossil fuels.
“The potential sources of supply from Vietnam’s own domestic oil and gas reserves have met with challenges and delays, whether it’s the financial capacity of the national oil company to develop those resources, or maritime disputes and political tensions,” said Andrew Harwood of energy analysts Wood Mackenzie in Singapore. “There is concern over how Vietnam is going to meet its future energy needs.”
Several coal, fuel oil and hydropower projects have faced delays and, in 2016, Vietnam abandoned its nuclear energy programme.
Hanoi is now looking to import LNG (liquefied natural gas), which the US is trying to sell around the world after extracting large quantities of gas using the environmentally ruinous process of fracking.
But extensive re-gasification terminals will be needed on the Vietnamese coast to receive significant quantities of relatively expensive US LNG.
State-run PetroVietnam Gas and its partners reportedly plan to start building one of the country’s first LNG terminals at Thi Vai in southern Vietnam late next month.
The Thi Vai LNG installation is one of at least two new LNG import terminals under development that would make Vietnam Asean’s newest LNG importer.
The Thi Vai terminal is expected to be operational in late 2022 with an initial annual capacity of 1 million metric tonnes, which is due to triple after a year, according to PetroVietnam sources.
But the sun-kissed country is also investing heavily in photovoltaic technology, an area of development that has been neglected across Asean.
A US$391-million solar power plant has begun operation in Tay Ninh in the south of the country. It is Asean’s largest photovoltaic development.
Vietnam’s state-run power company, EVN, said by August more than 4,000 homes had rooftop photovoltaic panels fitted over the previous three months with a total capacity of 200 megawatts (MW). Another 300MW of capacity is due to be added by the end of the year.
“The rapid growth of the rooftop solar market in 2019 is a sign that the government has embraced a diversification of power generation, with increased emphasis on renewable energy as the solution,” said Gavin Smith, a renewable energy specialist at Dragon Capital in Ho Chi Minh City. “It remains to be seen if the rapid growth of renewable energy since 2018 will be enough to head off the risk of power cuts in the next three years.”
Vietnam has vast solar and tidal power potential. Picture credit: PXHere