Many foreign investment business associations suggested that Vietnam should consider diversifying energy resources to power economic development, at the Vietnam Business Forum 2020 (VBF) taking place on December 22 in Hanoi.

Many foreign investment business associations suggested that Vietnam should consider diversify energy resources to power economic development. Photo: Nhat Minh

Looking ahead to 2021, Mr. David John Whitehead, Vice President of the Australian Chamber of Commerce Vietnam (Auscham) expected that, by mid-2021, the business performance would make strong progress as international markets would open up and trading activities to be restored. Due to the increase in power demand associated with economic growth, ensuring power supply through rapid development of power generation and electricity grid has become an urgent issue. 

Sharing this opinion, a representative from the Japanese Chamber of Commerce & Industry in Vietnam (JCCI) also suggested that the government should consider diversifying energy sources taking into account the unique conditions of Vietnam, as well as environmental aspects.

According to the JCCI, stable policy regime is an important factor for foreign investors to easily map out their medium and long-term investment plans, especially for renewable energy. 

The JCCI proposed the government to consider maintaining and expanding a more appropriate feed-in-tariff mechanism, completing a more bankable electricity purchase contract; speeding up and simplifying procedures for adding projects to the Power Development Plan (PDP); granting incentives to companies, factories and industrial zones introducing renewable energies; and the further relaxation of regulations on the introduction of off-grid power sources.

The JCCI recommended that the government needs to accelerate the completion of energy infrastructure based on the Gas Industry Master Plan (issued in 2017).

In term of nuclear power, the representative of the Indian Business Chamber in Vietnam (IBC) emphasized that Vietnam is expected not to reconsider nuclear power but that the effective use of nuclear technology for civilian purposes should be taken into account, as nuclear power is an extremely low-cost green energy source that no other power generation option can provide. Nuclear power development can also be seen as a strategic movement by the country to maintain the security of its energy-generating investments in the region. 

On the sidelines of the forum, Mr. Hong Sun, Vice Chairman of the Korean Business Association in Vietnam also agreed with the IBC’s opinion.

Noting Vietnam has been focusing on renewable energy in recent time, according to the VBF Infrastructure Working Group, renewable energy has met a part of Vietnam’s needs. More electricity is needed to fuel the country’s fast-growing economy. If not from coal, it will have to come from gas or nuclear fuel. These projects can cost between U$5 – 50 billion.

The VBF Infrastructure Working Group said that in order to attract these sorts of flows, these projects should be viewed separately from other smaller infrastructure projects.

In terms of policy, the VBF Power and Energy Working Group said that a favorable and legal environment should be built up to attract private investment in clean energy production and efficient energy use, removing the generation burden from EVN and sharing it with many power consumers and power producers in a distributed generation model.

The group suggested that such favorable legal framework would lead to reduced greenhouse gas emissions and air pollution and the other costs relative to a coal-focused energy plan and in alignment with Vietnam’s Nationally Determined Contributions commitments.