GE Power
New ideas and technologies to support Vietnam’s sustainable energy future plans
Developing new power plants to meet strong demand for reliable, sustainable, affordable energy, and sourcing capital to fund these, are some of the most pressing priorities for Vietnam in the near term future. While there are no clear-cut solutions to this challenge, we look at some of the innovative technologies, and flexible finance solutions available today that could make a difference in Vietnam.
Meeting demand
Based on projected economic and social growth between 2016-2020, state-owned electricity company, Electricity of Vietnam (EVN) estimates Vietnam needs an average electricity production growth rate of 11.6% (annually), peaking at 13%, to ensure sufficient electricity supply1 for the period. By 2020, Vietnam’s total electricity demand is expected to reach 234.6 TWh – double what it was in 20142.
Funding new energy projects
According to the World Bank, close to 40 billion USD3 in capital is required to build new energy generation facilities, and modernize infrastructure, to meet projected demand.
Of the financing, up to 67% will need to come from private sector investors. While many projects offer solid long-term investment opportunities, factors such as rising fuel costs, and taxes on water resources, and environmental resources, have to be considered by prospective investors.
For example, a 7% increase in coal prices will add an extra 4,692 billion VND to the cost of power generation based on 2017 prices4. Mr. Franz Genner, a World Bank energy expert based in Vietnam said the current price of 7.6 cent/KWh is too low to attract private investment4.
New energy mix
Vietnam also needs to diversify its energy balance to enhance energy security. At the international conference “New technologies for power supplies - power grids, renewable energy and energy storage systems” in Hanoi on March 14, Mr. Dang Huy Cuong, Director General of the Electricity Regulation Authority of Vietnam, said the hydropower opportunity in Vietnam is almost fully tapped5.
As new energy sources such as wind and solar are still in the development phase, thermal power will continue to play an important role in providing baseload supply to enhance energy stability and reliability. According to Vietnam Power Development Plan for the period 2011 – 2020, coal-fired plants will provide 49.3% of electricity supply in Vietnam until 20207.
Given the multiple challenges, Vietnam will require a holistic program to realize its sustainable energy ambitions – a program that puts equal attention on new technologies, new energy sources, financing, modernization of current assets, environmental best practices, and embracing digital solutions.
GE’s Energy Ecosystem offers a full portfolio of energy solutions
Around the world, many nations, like Vietnam, are in various stages of embracing change in the energy sector driven by major trends such as:
- Digitalization - increasing use of advanced software, low cost sensing converging with the Industrial Internet
- Decentralization - shifting from power generation towards generation closer to the point of consumption
- Decarbonization - prioritizing renewable energy, upgrading traditional infrastructure and applying lower or non-emitting CO2 energy producing technologies
Drawing on experience and expertise developed over more than 100 years globally, the GE Energy Ecosystem portfolio offers a full-range of solutions for customers to maximize opportunities offered by these trends in industry-critical areas such as electrical generation, transmission, distribution, storage, and more. For a developing market like Vietnam, GE can also secure access to third party equity capital and debt financing from export credit agencies, development financing institutions and other equity providers and commercial banks.
GE’s energy reach is deep and wide – GE’s innovative energy solutions support 33% of electricity capacity world wide, and 20% of renewable energy. In the Oil & Gas sector, GE customers experience 36% less unplanned downtime using a data-based “predictive maintenance approach” that has resulted in $34 million in savings per operator.
Coming to Vietnam
GE’s Energy Ecosystem portfolio will be revealed for the first time ever, in the upcoming “Powering Vietnam” conference on April 27. Current challenges, opportunities, along with innovative solutions for Vietnam’s energy sector will be discussed by GE business leaders, and experts from the Vietnam Institute of Energy, Department of Science, Education, Natural Resources and Environment, the World Bank, Baker & McKenzie,...
Look out for stories, and videos, on some of the key sessions and talking points from the event in GE Reports Vietnam in the few weeks ahead!
[1] http://news.zing.vn/pho-thu-tuong-yeu-cau-khong-de-mien-nam-thieu-dien-post680085.html
[2] https://www.adb.org/sites/default/files/institutional-document/178616/vie-energy-road-map.pdf