EGNRET46, Taichung, Chinese Taipei
13 April 2016

PRLCE Phase 3 -VIET NAM(EWG 01 2014A)

Presented by TRAN Thi Lien Phuong
APERC researcher

Asia Pacific Energy Research Centre

Presentation outline❑ APEC PRLCE phase 3 project feature• Objectives of APEC PRLCE project• PRLCE phase 3 project: scope, participants & schedule❑ APEC PRLCE phase 3 preliminary findings• Overview of Viet Nam RE policy and development prior to 2015
• New Renewable energy development strategy (REDS) for 2015-2030✓ Goals, targets✓ Supporting policies

APERC Asia Pacific Energy Research Centre2PRLCE phase 3 project features

Hanoi, Viet Nam, Jan 2016

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APEC PRLCE objectives➢ Initiated by APEC Energy Ministers’ 2010 Fukui Declaration :① Share information on low carbon energy performance as well as on policies and measures
for improving and promoting low carbon energy in APEC respective economies;② Provide opportunities for learning from the experiences of other economies and forbroadening the network among low carbon policy experts;③ Explore how low carbon goals on an overall and/or sectoral basis and action plans could
be effectively formulated in each economy under review, taking into account the range ofpossible strategies that could be used, according to the circumstance of each economy;④ Monitor progress on attaining low carbon energy goals on an overall and/or sectoral basis
and implementing action plans, if such goal and action plans have been alreadyformulated at the time of the review; and⑤ Provide recommendations for voluntary implementation on how implementation ofaction plans could be improved with a view to achieving low carbon energy goals.

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PRLCE phase 3 project - Scope & Participants••Project code: EWG 01 2014A (The 5th APECPRLCE)
Budget: 334 350 USD (APEC funding 20%)

Peer-review contents
1 Institutional Context
Low Carbon Energy Goals, Targets and2Strategy
3 Regulation and Infrastructure
4 Bioenergy
Biofuels

Biomass
5 Wind energy
6 Solar PV, Small-Hydro, Geothermal energy
7 Power Supply System
Fit-in-Tariff, Smart Grid
Private participation
8 Greenhouse Gas Management
APERC Asia Pacific Energy Research Centre••Host Economy: Viet Nam
Review Team leader: Mr. Takato Ojimi(APERC President)
Leading review experts-Dr. Kazutomo Irie (APERC)-Ms. Elizabeth Yeaman (NZ)
-Dr. Iain MacGill (AUS)-Dr. Karnnalin Theerarattananoon(THA)-Dr. Steven Hou-Peng Wan (CTP)-Dr. Seokwoo Kim (ROK)-Mr. Mario C. Marasigan (PHL)-Dr. Iain MacGill (AUS)-Ms. Elizabeth Yeaman (NZ)
-Dr. Naoki Matsuo (JPN)5PRLCE phase 3 - Schedule
January 1822, 2016

February March 2016

April 2016

May-June2016• PRLCE phase 3 workshop held in Hanoi, Viet Nam (postpone from July 2015)• The expert team drafts the PRLCE Phase 3 Final Report, including Viet Nam’s
background information (Part 1) and Peer-review report (Part 2)• APERC submits the 1st Draft PRLCE Phase 3 Report to Viet Nam for comments• Present PRLCE phase 3 preliminary findings at EGNRET46 meeting• The expert team finalizes the Final Draft Report• Viet Nam signs off the Final Draft Report• Viet Nam and APERC circulates to EWG members for discussion and endorsement.

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PRLCE phase 3 – Viet Nam⚫ Viet Nam PRLCE workshop in Hanoi (18-22January 2016)– 8 focus areas of peer-review– 10 discussion sessions– 1-day site visit to Hoa Binh hydropower (1920 MW)– 39 Vietnamese participants from 10 organizations(DOST-MOIT, GDE-MOIT, ERAV, PMO, IE, MOT, MOF,MONRE, MOST, EVN- Hoa Binh Hydro power)– 90% positive feedback on the workshop/project
impacts from participants⚫ PRLCE phase 3- First draft report:– 56 recommendations
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First Draft Peer Review ReportPeer-review contents
1 Institutional ContextLow Carbon Energy Goals, Targets andStrategy
3 Regulation and Infrastructure
4 Bioenergy
Biofuels
Biomass
5 Wind energy
Solar PV, Small-Hydro, Geothermal
6energy
7 Power Supply System
Fit-in-Tariff, Smart Grid
Private participation
8 Greenhouse Gas Management
2APERC Asia Pacific Energy Research Centre

Number ofRecommendations
4
76+36
6
5
4+2+2
4+3
138

PRLCE phase 3 preliminary findings(Please do not cite prior to release of theendorsed version)

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9Institutional Organization for RE development
Prime Minister

Prime Minister’s Office (PMO)

Electricity Regulatory Authority of Viet Nam (ERAV)Ministry of Finance (MOF)

Oil trading Co.s
Biofuels producers
PetroVietnam (PVN)
Vinacomin

BOTs
Power Co.s

PowerDistributionCo.s

Other IPPs

GENCOsNational Power
Transmission Corp.
(NPT)

National Load Dispatch
Centre (NLDC)

Provincial Dept. ofIndustry and Trade (DOIT)
People's Committee ofCities/Provinces

Ministry of Natural Resources & Environment (MONRE)
Ministry of Sciences & Technology (MOST)
Ministry of Construction (MOC)
Ministry of Agriculture and Rural Development (MARD), …

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EVN

Dept. of O&G
processing &distribution
Dept. of power
grid & rural
electrification
Dept. of New &Renewable
EnergyDept. ofHydropower
Dept. ofPlanning

Dept. of Sciences & Technology
General Directorate of Energy (GDE)

Ministry of Planning and Investment (MPI)

Ministry of Industry and Trade (MOIT)

Policy framework for RE development in Viet Nam
Sustainable andinclusive growth

Green growth

Responses toClimate change

Renewableenergydevelopment

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RE is a field of government’s
investment incentives

RE development strategy in Viet Nam prior to 2015
❑ Period up to 2015:•Implement RE development in integration with broader objectives of general socialeconomic development, industrial and sectoral deployment✓✓

with focus on poverty reduction, modernization & new rural development, fueldiversification, and implementation of pledge to mitigate GHG emission increase
Tight link to national major goals, targets, policies and tasks for socio-economicdevelopment•

Rural electrification is a first priority in implementation agenda, recognised as aprecondition infrastructure for rural development and modernisation•Encourage the deployment of all resources from all economic sectors for RE
development; Proactively explore opportunities for international supports✓•

Strongly devolve and decentralize decisions to local government for rural
independent (off-grid) RE projects;✓•

EVN’s rural grid-connected project: State budget & ODA support maximum 85% total
investment

Central state budget & ODA support covers 100% equipment purchasing and installation
expenses of qualified rural RE projects

Encourage biofuel research works, pilot projects; special investment incentives forbiofuel production projects.

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Accelerated strategy of RE development and use(PMVN Decision No.2068/QD-TTg, Nov 2015 - REDS)

Total primary energy supply
2013 = 58.8 Mtoe
Noncommercial
biomass, 13.7,23%

Coal, 17.2,29%

Hydropower& import, 4.7,8%
Natural Gas,
8.5, 15%

Crude Oil, 6.9,12%
Oil products,
7.8, 13%(Capacity: 21.5 / 31.2 / 34.5 GW)

RE power targets in 2030

RE power targets in 2020

120

Generation - TWh

Generation - TWh

10080
60
4020010080
60
40
200

Hydro (all)
PDP7 (All RE 24%)

Wind

Other REREDS (All RE 38%)

Hydro (all)
PDP7 (All RE 15%)

Wind

Other REREDS (All RE 32%)

Sources: VNEEP (2015), REDS (2015), MOIT (1/2016), IE (2016)

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Accelerated strategy of RE development and use(PMVN Decision No.2068/QD-TTg, Nov 2015 - REDS)❑ RE energy to increase 2.5 folds (25 Mtoe in 2015 → 62 Mtoe in 2030)
Biofuel targets
RE share in Total power generation:
2015: 35% (58 TWh)
2020: 38% (101 TWh)
2030: 32% (186 TWh)1210

10.5 25%

Biofuels supply -Mtoe

25%

share of total transport fuel demand

820%

615%

3.7 13%42010%5%

0.8 5%

0.150%1%
2015

2020

2030

2050

RE development is expected to mitigate:➢ 5% of GHG emissions in energy activities in 2020, 25% by 2030 vs BAU➢ Import need in long term for coal (40 Mt in 2030) and oil products (3.7 Mt in 2030)
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30%

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Accelerated strategy of RE development and use(PMVN Decision No.2068/QD-TTg, Nov 2015 - REDS)❑ Biomass supply and use

Agricultural andforestry waste45%
used for energy
Livestock waste
treatment for5%biogas
City waste
treatment for
Negligibleenergy
Volume of biogas
systems
43(million m )

2020

2030

2050

50%

60%

70%

Biomass targets
3530

10%

50%

Most
treated

25

Mtoe

2015

2015
1030%

8

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70%

60

Most
used
100

502015For heat production

2020
For power generation

2030
For biofuel production

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Supporting mechanisms and policies(PMVN Decision No.2068/QD-TTg, Nov 2015 - REDS)❖ Prioritize investment and use of renewable energy in the development of theenergy industry with a focus on building Viet Nam’s renewable energy market,❖ Support new models of ownership to participate in the development and use ofrenewable energy,❖ Various tax incentives within import, corporate income and land taxes and fees
(as in law applicable to special preferential/preferential investment projects)❖ Approved electricity prices for on-grid renewable energy consistent with thedifferent locations and features of potential renewable energy projects toprovide appropriate investment returns to investors,

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Supporting mechanisms and policies(PMVN Decision No.2068/QD-TTg, Nov 2015 - REDS)❑ RE electricity tariff regulations
RE power project

Small hydroAvoided-cost tariff

FiT (UScent/kWh)Yearly approval & varied levels by season;
about 5 US cents/kWhWind power

7.8

Biomass - CHP

5.8

Biomass power

Yearly approval, based on generation cost ofthermal coal power plants using imported-coal

MSW power - landfill gas

7.28

MSW power- Directcombustion

10.05

Solar farm

11.2 (draft)

Solar PV - Rooftop

14 (draft)

Biogas power
RPS excludes large hydropower

Geothermal

APERC Asia Pacific Energy Research CentreNANA17Supporting mechanisms and policies(PMVN Decision No.2068/QD-TTg, Nov 2015 - REDS)❖ Standardized PPA (20 years) and an obligation for EVN to prioritize
renewable energy in grid connection, dispatch and purchase electricity,❖ Project specific arrangements for off-grid electricity systems,❖ Net-metering for electricity consumers with simplified connection
arrangements,❖ Environmental fees for organizations utilizing fossil fuels for energy
production.

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Accelerated strategy of RE development and use(PMVN Decision No.2068/QD-TTg, Nov 2015 - REDS)❑ Renewable Portfolio Standard (RPS) obligation upon major electricity
generators and traders

RPS obligation

2020

2030

2050

Electricity generation companies greaterthan 1,000 MW (excluding BOT projects)

RE not lower RE not lower RE not lessthan 3%than 10%than 20%

Electricity distribution companies

RE not lower RE not lower RE not lessthan 5%than 10%than 20%

RPS excludes large hydropower

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Thank you for your kind attention!
Mrs. Tran Thi Lien Phuongtran.tlp@aperc.ieej.org.jp

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