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Representative image. Source: Vietnamnet

Amidst rising energy deficit and warnings that dwindling natural resources would lead to electricity shortages, Vietnam should reconsider the shelved nuclear power programme, experts have suggested.

Nuclear energy is one of the recommendations made by experts as the Industry and Trade Ministry (MoIT) gathers public inputs for its National Energy Master Plan for the 2021-2030 period, with a vision towards 2050.

Electricians work on the poles in southern Bac Lieu Province, May 9, 2020. Photo: VnExpress

Tran Xuan Hoa, Chairman of the Vietnam Mining Technology Association, said that as Vietnam’s net energy imports continue to rise, it is getting harder and harder to find sources that would allow the country to access stable energy sources to meet its socio-economic development goals.

A restart of the nuclear development program should be included in the national master plan, he was quoted by VnExpress as saying. Compared to other types of energy currently available, nuclear energy was "still relatively safer and low-priced," he added.

This is the first time that Vietnam is working on a comprehensive national energy master plan. Prior to this, energy plans were made on a piecemeal basis, that is, for each individual energy sector.

"We have halted nuclear production for many reasons, but a restart should now be considered. Unfortunately, in the short term, the national energy plan has not mentioned anything about nuclear development," Hoa said.

Nguyen Anh Duc of the MoIT’s Institute of Petroleum said tapping alternative sources of energy should be a key consideration as coal, oil and gas reserves get depleted.

In addition, the government needs to find ways to ease bottlenecks for investment in gas exploitation.

"Procedures, legal corridors, and policy mechanisms for the oil and gas sub-sector need to be set out in detail in this comprehensive energy plan to attract investment in exploration in deep and remote waters," Duc said.

A market price mechanism is needed

Representative image. Source: Vietnamnet

Hoa said that two years ago, the solar power feed-in-tariff (FIT) was very attractive at a fixed 9.35 cents a kWh. Now, it has decreased to 7.09-8.38 cents per kWh, depending on the type of investment. Given falling renewable energy prices, the national master plan should promote the development of this type of energy over others, he added.

Data released by national utility Vietnam Electricity (EVN) shows that as of June-end this year, 5,482 MW of solar power capacity had been installed, accounting for 9.5 percent of the country’s power sources. By mid-August, there were nearly 45,300 rooftop solar power projects operating with a total capacity of 1,029 MWp, an output of about 500,692 MWh.

According to Tai Anh, Deputy General Director of EVN, as long as renewable energy accounts for less than 20 percent of national capacity, the power grid will not need additional investment.

But if it does, then the system will require many new solutions such as additional storage batteries to maintain balance, and money would have to be set aside to deal with environmental impacts when renewable energy machinery expires, inflating costs, he said.

"If Vietnam wants to raise its renewable energy capacity, how much we can afford to subsidize and how much the economy can withstand are factors needed to be considered carefully before making an appropriate choice," he said.

Vietnam has recently become a net coal importer. Photo: AFP

Dr. Nguyen Ngoc Hung of the MoIT’s Institute of Energy said Vietnam’s new comprehensive national energy plan also needs to set up clear incentivizing mechanisms, especially in terms of energy prices, if the country wants to attract private sector investment.

"Most businesses dare not invest in coal mines, deeming the risks too great," he said.

Nguyen Thuong Lang of the MoIT’s Institute of Commerce said energy prices are set by the Ministry of Finance, and unless businesses are allowed to set prices according to market forces, it would be very difficult to make effective feasibility appraisals of potential energy projects.

So far, no market price mechanism has been mentioned in the MoIT’s draft energy master plan, he noted.

Lang said that the roles of the state and the private sector will have to be redefined and the market allowed to decide prices, which will be more efficient. As Vietnam’s economy transforms rapidly, prices should be allowed to match changes in the country’s economic structure, he added.

Pointing to the fact that no truly large-scale energy project has been started in the last five years, Hoa said that the reason why businesses do not dare to invest is the lack of a market mechanism, with many energy sectors still having prices set by the Ministry of Finance.

"Therefore, it is necessary to get the energy sub-sectors to coordinate with the Government, localities and enterprises to resolve this issue," Hoa said.

Deputy Prime Minister Trinh Dinh Dung had said at the Vietnam Energy Summit 2020 in July that Vietnam needs another 5,000 MW in power plant capacity by 2025, which will cost it around US$7-10 billion each year.

Vietnam currently relies largely on hydropower and thermal power for its electricity needs, but its hydropower potential is almost fully exploited and oil and gas reserves are running low.

Coal-powered plants accounted for 36.1 percent of electricity supply last year, followed by hydropower at 30.8 percent, according to the Vietnam Energy Association.

The MoIT plans to incorporate feedback on the draft National Energy Master Plan and submit its final version to the Government by the end of this year./.

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