June 2013

Vietnam update: Energy and Environment- Market opportunities for Norwegiancompanies

OVERVIEW ENERGY SECTOR

Vietnam energy sector is driven by the fastest – growingdemand in the region. Vietnam will shift from an energy-export country to an energy-import country by 2016. TheVietnam power sector is under restructuring to increaseinvestment from none - EVN investors.Vietnam total power installed capacity is 24,000 MW andwill be increased to 146,800 MW by 2030. Of those, the coalfired thermal power proportion will be increased from 11%to 48%-51.6% by 2030. Contrarily, the hydropowerproportion will be reduced from 23.1% to 11.8% by 2030. Gasturbine generation accounts for 42.65 % of the totalelectricity production and will reduced to 10.5% by 2030.Due to the high demand of coal for the electricitygeneration, Vietnam will be an energy importing country by

2016. LNG is probably an alternative to coal and natural gasfor power generation

RENEWABLE ENERGIES

Renewable energies, especially affordable renewableenergy are given priority by the Vietnam government.Renewable electricity production will account for 4.5% and6% of the national electricity production by 2020 and 2030respectively. By 2025, Vietnam plans to cover 100% thenational demand of petroleum productions by E5 and B5.The affordable renewable energy include small hydropower,biogas, biofuel, etc. At the moment, wind energyproduction cost is less competitive in comparison withsmall hydropower and conventional energies.

Possible donors• Nordic Climate fund (http://www.ndf.fi/index.php?id=22);• EEP Mekong (www.eep-mekong.org);• Vietnam Business Challenge Fund (http://www.vbcf.org.vn );• ADB (http://www.adb.org/projects/45406-001/main?ref=countries/viet-nam/projects).• WB (www.worldbank.org)

HydropowerVietnam has huge hydropower potential, which isestimated at 18-20 TW and 2.5-3 TW for large/mediumscale hydropower and small hydropower respectively.Opportunities are seen in• Dam safety calculation/optimization of hydropoweroperation/Extension of existing hydropower plant;• Invest in small hydropower project;• Produce hydropower equipment in Vietnam;• Utilize Vietnam factories/skilled technician and labor todevelop hydropower projects in other countries.

BiofuelVietnam has potential to produce biofuel from crops and

Ankroet hydropower plant – 4.4 MW (source: PECC 1)

ContactHai Anh TranPhone (+84) 903463318tran.hai.anh@innovationnorway.nowww.innovationnorway.no

Innovation Norway. Akersgata 13, P.O.Box 448 Sentrum, NO-0104 Oslo, Norway We give local ideas global opportunities

agriculture by-products. Vietnam targets to cover 100% ofnational petroleum demand with B5 and E5 by 2025The business opportunities within biofuel include:• Providing technology and equipment for blending/transportation/storage/distribution of biofuel;• Technology transfer in terms of biofuel production andbiofuel appliances;Vietnam potential partners: PetroVietnam, Petrolimex,Ministry of Agriculture and Rural Development, etc.

LNGVietnam has a potential of using LNG as an alternative tocoal and natural gas for power generation. The businessopportunities within LNG include:• Providing technology/investment to switching fromdiesel to LNG or from imported LPG to LNG.• Providing technology and equipment for transportingLNG to power plants;• Providing equipment and consultant service fordeveloping LNG terminal;• Cooperating on R&D projects relating to LNG.

Vietnam potential partners: Petrolimex, Vietnam RailwayCorporation, Electricity of Vietnam, PV Power, PV Gas, IPPsfuelled by DO/FO.

WASTE TO MONEY

Aquaculture processing by- productsVietnam is the world’s 3rd largest aquaculture nation with4.5% GDP contribution by Aquaculture. In 2012, totalVietnam aquaculture products are 3.2 million tones, whichalso produce an approx. amount of 4 million tonnes ofaquaculture processing by-products. Opportunities areseen in providing technologies to produce higher qualityfishmeal,fish oil, collagen, etc. Potential partners are privatecompanies under Vietnam Association of SeafoodProcessing (www.vasep.com.vn).

Animal husbandry waste Vietnam has 145,880 animal farms and approx. 9 millionanimal husbandry households, which discharges an amountof 73 million tons of solid waste and 23-30 million m3 ofliquid waste p.a. Opportunities for biogas technology fromanimal manures are seen such as technology to develop

large scale biogas digester for farms; utilization of biogasslurry as organic fertilizer; promote biogas appliances suchas biogas-generator; biogas cooking stove, etc. Potentialpartners are Vinamilk, TH milk, CP Vietnam, etc.

Agriculture wastesVietnam agriculture wastes are estimated at 39 milliontonnes of rice husk and straw, 4.5 million tonnes of sugarbaggases; 75,000 tonnes of coffee skins, 0.8 million tonnesof wood by products, etc. Opportunities are seen inproviding fermentation technology to product biogas fromagriculture waste; providing technology to produce fuelfrom agriculture waste; and providing combustiontechnology to produce electricity from agriculture waste.

Other wastesVietnamese produces approx. 13,100 tonnes of industrialwaste, 35,100 tonnes of domestic waste and 24,900tonnes of rural household wastes per day. Vietnam facesthe challenge of disposing the waste properly and still doesnot see the possibilities of turning these wastes into money.

WATER SUPPLY AND WASTE WATERTREATMENTVietnam government gives high priority to water supplyand waste water treatment. The business opportunitiesinclude:• Provides drinking water unit for resort, hotel, hospital,military base, vessels, etc.;• Provides water purifiers for households in shortage orwater pollution areas;• Provides relevant technology and equipment for watersupply projects/investors in Vietnam;• Provide technology for converting blackish water todrinking water;• Technology transfer for industrial waste water treatmentprojects;• Partnership with Vietnamese partners to bid forinternational funded projects;• Local productions of relevant equipment;• Provide technical control options for aqua-farming suchas aeration system, trickling filter, etc.

ENERGY EFFICIENCY/DEMAND SIDEMANAGEMENT

In recent years, the Vietnam government has encouragedsupply side efficiency and demand side management, toreduce the shortage of energy and the need for newinvestment in capacity. Vietnam targets a reduction of thepeak demand of 207 MW by 2012, and 450 MW by 2015 atday time peak load. Furthermore, the reduction of 6,000GWh per year of the consumption are considered possible.To promote reductions in the electricity demand, theefficiency program is expected to set efficiency demandstandards for electricity appliances and labelling. Tariffregulations which propose time of use (TOU) meteringcreates pricing signals to reduce peak demand and energyconsumption.

Cascade rice field in Sapa (photo: Do Anh Tuan, Innovation Norway Hanoi)

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