Why do not exploit the potential of renewable energy?

25/04/2017

Vietnam is considered as a country with great potentials for renewable energy development but it is still in a potential form that has not yet been exploited.
  

According to the World Bank and other organizations, Vietnam has the potential of four types of renewable energy: small hydropower, wind, solar and biomass. Potential figures have also been surveyed and published. Specifically, the potential is estimated to 10.000-20.000MW for wind power, 4-5kWh/m 2 /day for solar, about 3.000MW for biomass, and about 7.000MW for small hydro. Despite the great potentials, the statistics from the Ministry of Industry and Trade show that the number of exploited units are very small. Up to now, wind power has just been exploited about 52MW, solar power about 3.5MW, biomass about 150MW, and small hydro power about 1,500MW.

 


Large renewable energy potential but not developed is the concern of the state management agencies as well as active businesses in this field. Due to the pressure of shortages of primary energy sources such as coal, oil, gas, and hydroelectric power in the future, while the country's energy needs are growing to ensure sustainable growth. In the situation where renewable energy sources cannot be developed due to many barriers, besides saving and importing energy solutions to meet consumption demand, Power Planning VII has also taken into account the development of coal-fired thermal power to solve the short-term problem. However, a 40% increase of coal power after 2020 also places great pressure on securing coal supply as well as the efficiency of thermal power plants and environmental issues.

According to Mr. Pham Trong Thuc, Director of Department of new and renewable energy (General Directorate of Energy - Ministry of Industry and Trade), renewable energy development is an urgent demand but facing many obstacles, including technology and relatively high investment costs. Without the support of the Government, the development of renewable energy cannot balance the development of traditional energy forms.

In recent years, government support policies for renewable energy development have become more specific and practical and have been gradually reviewed and adjusted in progress. However, at present, Vietnam's support policies accessed by investors are not synchronous and low compared to other countries.

Mr. Nguyen Hoang Dung, Director of Renewable Energy Department, Power Engineering Consulting Joint Stock Company 3 (PECC3) said: Renewable energy projects need a lot of capital. Without supports, investors find it very difficult to arrange capital as most of these projects are low or no profit. Therefore, finding funding sources from banks is difficult because banks do not see the investment efficiency, so they do not give the loan. The current price of wind power, according to the assessment of many investors, is low and not enough support to develop. For that reason, investors are waiting for the Government to consider and adjust. Meanwhile, biomass electricity prices are not attractive and Electricity prices from solar cells has not built yet...

As a unit investing in a number of wind power projects in Vietnam, Mr. To Hoai Dan, Cong Ly Company said that: for wind power, according to the Power Plan VII to 2020, it will reach 1,000 MW (account for 1.5 % of total national electricity output), to 630 MW by 2030 (account for 4.5 times the total national electricity output). To achieve this goal is really a huge challenge, because from now to 2020 there will be only five more years, but the current price of electricity for wind power is relatively low at 7.8 cents / kWh. It does not appeal investors as well as businesses to participate.

In the fact, investing in a number of renewable energy projects has shown many other problems. Most of the project equipment have to be imported, for example, because of importing wind turbines from the United States, Europe, the transport costs also accounted for 10-15% of the value, making investment costs and energy prices high. With a wind power project capacity of about 30MW, a minimum investment must be $ 50 million. Meanwhile, Vietnamese enterprises are often small businesses so seeking funding for renewable energy development is very difficult. In addition, due to the inadequate infrastructure of country, some investors have to spend their own money to transport equipment, build the grid which are making high investment costs.

Apart from difficulties in arranging the capital, the human resource is also a big challenge because in our country, there is no universities specializing in renewable energy. Therefore, it is a very difficult to find this kind of labor in Vietnam. Most of the labor forces involved in renewable energy development are trained abroad and limited. With these resources, it is very difficult to develop renewable energy.

Although domestic and foreign investors desire to exploit the great potential of renewable energy in our country, they have not yet been able to accelerate the deployment. They are waiting for policy adjustments as well as more favorable conditions for development.

Currently, the most feasible projects are wind power projects with 77 industrial scale projects registered in 18 provinces and cities across the country with the total capacity of over 7,000MW. Of which, most projects are concentrated in Binh Thuan province, and Ninh Thuan provice with nearly 40 projects. Although there are many registered projects but many projects have to stop due to obstacles. It is expected that by 2020 only about 10 feasible projects will be put into operation.

Particularly for wind power projects, Mr. Pham Trong Thuc, Director of the Department of New and Renewable Energy said that the wind power market in Vietnam is very active, it only needs the favorable factors to develop strongly. It is expected that this year, the Government will adjust the price of wind power to attract more investors; It is hoped that with new wind electricity prices, many businesses and investors will be involved in wind power projects in Vietnam.

Regarding other forms of renewable energy, although there are many registered projects, most of them are just at the level of project planning without any implementation. As industrial-scale solar power projects are prepared by some investors in Con Dao, Ninh Thuan, Binh Thuan, Dak Nong, Quang Ngai, Ha Tinh ... but only in the process of project planning. The design is less detailed and practical. Biomass energy in our country is plentiful and diversified, but nowadays it is mainly used for fuel or for rotting in the field, which is low value because there are no many ways to use it. Small hydropower projects have encountered difficulties during the implementation process as some investors have been working on some ineffective projects that have raised concerns about the small hydropower causing harmful to the environment. Thus, the projects are not supported by the people.

In general, the development of renewable energy in our country has many barriers. However, this is an urgent and important requirement, therefore, the government is making a lot of efforts to find solutions to support investors. Hopefully, with the efforts of the Government together with the cooperation and support of international organizations, domestic and foreign investors will exploit and use this kind of energy more and more effectively to ensure the sustainable development in the future.

By Hung


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Energy Conservation and Cleaner Production Center of Hai Phong City
Add: No. 104 Nguyen Duc Canh - Hai Phong
Tel: (84) 313 7340488 * Fax: (84) 313 630 626
Email: ecc-hpc@haiphong.gov.vn
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