title: Vietnamese energy sector: Challenges and opportunities
Creators: name: Nguyen, Luan T
Publisher: name: Griffith University
Year: 2022
Subjects: subject: Vietnamese energy sector
subject: energy poverty
subject: policy

description: The energy sector plays a vital role in helping developing countries to escape poverty, improve living standards, and narrow the economic gap with developed countries. However, in the developing world, the energy industry faces more challenges that prevent these countries from entirely using energy for economic development. This thesis examines the most vital issues related to the energy sector, including energy inefficiency, energy poverty, and the challenges and opportunities to develop renewable energy. The thesis examines data and context in Vietnam, one of the most resilient developing countries, but the findings could be related to most developing countries. This thesis is structured in the form of four empirical studies. The first study evaluates the impacts on energy inefficiency in the industrial energy sector under three broad aspects, which are (a) government involvement, (b) managerial behaviour, and (c) technology adoption. The study employs the Shephard energy distance function with firm-level panel data of eight major industries to suggest that energy is inefficiently used in all industries. Besides, it found that shared ownership between public and private sectors outperforms state ownership or sole private tenure in energy efficiency. Furthermore, larger firms, import activities, and investment to expand the production line negatively influence energy efficiency. Finally, policy implications are discussed with some highlights towards reducing state intervention in business ownership and energy market regulation. The second study proposes a new energy poverty measure by suggesting an extension for the Exact Affine Stone Index demand system (Lewbel and Pendakur, 2009) to include implied disutility of energy use.1 The disutility occurs from overconsuming dirty fuels or sacrificing other household demands to make clean energy more affordable. These considerations produce a more precise energy-poor indicator for household energy mix consisting of solid biomass and modern fuels. Applying the proposed method, this study found that energy poverty is possible even at income levels that are not financially poor. In addition, higher income levels may not motivate households to substitute traditional energy with cleaner resources entirely. Instead, these households still use solid biomass as a traditional habit and because of its abundance. However, consuming carbon-intensive energy sources does not necessarily mean energy poor. Finally, policy implications recommend that energy policies consider broader subjects rather than focusing solely on financially poor families. In addition, well-off families should be made aware of the health risk of using dirty energy and encouraged to pursue sustainable energy-consuming habits. The third and fourth studies found that solar energy has excellent opportunities to enable Vietnam to move to renewable energy and meet emission reduction targets, but also has challenges that must be addressed. The third study applies survival analyses with the household panel data and discovered that feed-in tariff policy dramatically boosted solar adoption. However, higher power tariffs, which are in regulated price schemes, discouraged solar energy adoption. In addition, the fourth study revealed that rooftop solar energy had a short-term rebound effect. In the long-term, the rebound effects decrease, but households tend to abandon the solar system because households were not instructed to install solar storage to store the outputs and were less attracted by the feed-in tariff to sell solar to the grid. These results signify that solar energy development could be motivated by supportive policies. However, to ensure the desired achievement, policies should be directed to more encouraging feed-in tariff structures and to removing the regulated and subsidised price scheme. Overall, this thesis contributes to the literature by identifying the challenges and opportunities faced by Vietnam and potentially other developing countries. The thesis contributes to policy implications by quantifying the impact factors, suggesting plausible solutions for policymakers to alleviate the obstacles and leverage the chances. Furthermore, this thesis makes significant contributions to the methodological literature. The second study proposed a new method to measure energy poverty. All other studies employ the most recent methods or novel approaches, such as the long-term dynamics of the solar rebound effect.