GE: Gas and renewables offer shortest route to sustainability

The energy sector plays a key role in addressing climate change, but the accelerated deployment of renewable and gas power together is a viable path to combating climate change. Narendra Asnani, general manager of Contractual Services Asia, GE Gas Power talked with VIR’s Thanh Van about the future of energy and how GE can support Vietnam’s energy transition.

How do you think the world can best accelerate energy transition across the board?

Climate change is a global priority which needs urgent action over the next decade. The global energy industry is trying to solve the energy trilemma, balancing sustainability, reliability and affordability. This is because power generation makes up 41 per cent of emissions globally. However, there is not enough zero-carbon energy to meet the demand today. Energy demand will continue to rise, especially if we are to administer improvements in the lives of the one billion people who currently have no reliable access to power.

It is essential for the energy industry to reduce total emissions while increasing generation efficiency. In 2019, carbon emissions in Asia Pacific reached about 16.5 billion metric tons, half of which (8.4 billion metric tons) came from electricity and heat producers. This prompted Asian nations to put in place stringent decarbonization strategies.

We believe that the simultaneous accelerated and strategic deployment of renewable energy and gas power can yield substantial progress in combatting climate change in the near-term, while opening a path to a lower-carbon emitting world in the time beyond. Currently, neither gas nor renewables are sufficiently effective alone at the pace and scale needed. In fact, gas plays a critical role in achieving ambitious emission reduction goals. Gas is a force multiplier for expanding renewables by providing constant baseload energy.

Addressing climate change requires global action, national commitments, as well as consistent policy and regulatory frameworks. We need to do more to move the needle and make the next ten years a Decade of Action to De-Carbonize Power.

What challenges are facing the countries that are new to the energy transition, like Vietnam?

Electricity demand in Vietnam is forecast to rise 8.8 per cent per annum in 2021-2025, and 6.7 per cent in the next five years. Meanwhile, the country targets to reduce its greenhouse gas emissions by 9 per cent by 2030 and reduce carbon emissions by 83.9 million tons, instead of the earlier 62.7 million tons through indigenous efforts. In addition, at the COP26 World Leaders' Summit, Vietnam committed to achieving net zero by 2050.

To achieve these targets, the country is now moving from traditional energy sources to renewables and lower-emission sources including wind, solar and gas power. Specifically, wind power will be developed substantially, from the capacity of about 600 MW in 2020 to 11-12 GW in 2025 and over 17.3 GW in 2030, including 1 GW of offshore wind power.

Meanwhile, gas power generation will be increased from 7 GW in 2020 to 37 GW in 2030, with gas-to-power sources accounting for 9.49 per cent.

Creating the right energy mix is essential and with the right strategy and the right technology, countries like Vietnam can chart a path to a greener economy with sustainable, reliable, and affordable power.

However, with the region’s energy demand set to increase by at least 3 per cent a year until 2030, it has been challenging for markets to provide ongoing sustainable energy ventures with affordable pricing structures. This has slowed down the scaling of cleaner alternatives, while the need for reliable baseload power keeps growing to prevent intermittency issues.

Going forward, the energy transition and diversifying the region’s energy mix rides to a great extent on our ability to find adequate solutions around the energy trilemma.

Energy transition will require the adoption of modern technologies and new breakthroughs. As a global leader, how does GE help Vietnam realize its energy transition ambitions?

GE has over 100 years of expertise in leading innovation and we have set all of our capabilities behind addressing energy transition issues. According to the latest McCoy Power Report, GE has more experience running gas turbines on hydrogen than any other original equipment manufacturer (OEM). In total, GE has 100+ gas turbines with 8 million operating hours, supporting power generation with hydrogen and associated fuels around the world.

The Sultan Ibrahim Combined-Cycle Track 4A Power Plant in Johor, Malaysia began operations in January 2021 with GE’s 9HA.02 gas turbines. The project was the first globally to use these turbines in commercial operation. The plant will have the capability to burn hydrogen levels up to 50 per cent in the future.

Another project is Tallawarra B, Australia’s first dual-fuel-capable natural gas/hydrogen power plant owned by Energy Australia. The project is powered by 9F.05 turbines and operates as an open-cycle peaker at 316 MW.

With our substantial international experiences, GE can support Vietnam in switching from coal to gas, charting the fastest, most practical and most affordable path to emission reduction. GE has recently joined the expansion of Nhon Trach power plant as an equipment supplier. Accordingly, 9HA gas turbines will be provided for the first liquefied natural gas (LNG) power plant in Vietnam. This will be GE’s first H-Class gas turbine order in Vietnam. Once in commercial operation in 2025, Nhon Trach 3 and 4 is expected to deliver over 1.6 GW of electricity and it will be the country’s first power plant fuelled by LNG.

This first-of-its-kind project will open a new chapter for gas power generation in Vietnam. We are proud to begin deploying the first HA project in the country to support national energy goals and facilitate more sustainable economic growth.

What policies do you think are necessary for Vietnam to advance energy transition and drive decarbonization across the power sector?

There are many pathways to a cleaner energy future and the mix of fuels and technologies needed to achieve net zero carbon goals vary from country to country.

A multi-stakeholder approach involving industry associations, governments, and the academia is essential to drive concrete actions. GE Gas Power is committed to be working with local partners such as utilities and independent power producers and support them with cleaner energy solutions and our newest, most advanced gas turbine fleet. At the same time, we continuously look for ways to collaborate with government agencies such as the Electricity and Renewable Energy Authority (EREA), Electricity of Vietnam (EVN), as well as the Ministry of Industry and Trade to integrate and scale new technologies so that we can better serve customers in the region.

We believe that a combination of gas and renewables is key to addressing climate change and will enable the fastest practical and affordable path to decarbonization. In terms of policy reforms, we would be happy to see the government measure and incentivize reductions in carbon intensity in the power sector. Transparency and predictability are also crucial, allowing lifecycle economics to drive investment decisions factoring in a cost of carbon in some forms.

Another solution is to establish market structures that value energy, flexibility, and dependable capacity separately to encourage the optimum mix of technologies in an affordable and practical way.

Vietnam should also encourage the free flow of goods and ideas, consistent with the principles of the World Trade Organization. Efforts should also be made to reward research and development, innovation, and private risk taking. On top of that, the country should set realistic timelines for its emissions reduction efforts.