© giz in Viet Nam, 2016

Renewable Energy and Energy Efficiency Project (4E)The Energy Sector in Viet Nam

Viet Nam’s fast-growing economy is the main driver for the rapidly increasing electricity demand throughout the country over the past years. Viet Nam’s annual electricity production increased more than tenfold, from 8.6 TWh in 1990 to 164 TWh in 2015. The annual increase in this period was between 12-15%, almost twice as high as the GDP growth rate.

Viet Nam’s overall installed electricity generation capacity was 39 GW in 2015. Hydropower, coal and natural gas are still the dominant energy sources for power production.

2015: 39 GW2015: 164 TWh* Including small hydro power

RE*5.4%

Import1.4%

Hydro37.3%

Hydro30.4%

Coal33.5%

Coal34.4%

Gas22.5%Gas

30.0%

RE*3.7%

Import1.5%

According to the National Power Development Plan (PDP VII revised, March 2016), Viet Nam aims to increase its renewable energy share in power production substantially. The overall percentage figures for 2020 and 2030 include small hydro power.

Source: Reviesd PDP VII (calculated on the basis of projected electricity production in 2020/2030)

500MW 2,000MW

6,000MW

12,000MW

800MW 850MW

Biomass Wind Solar Biomass Wind Solar

203021%

20209.9%

Plan

ned

Inst

alle

d Ca

paci

ty

With regards to energy consumption, industry, transportation and residential areas are the three biggest electricity consuming sectors.

Source: Energy Consumption by Sector, Institute of Energy

Industry46.4%

Others8.5%

Residentialareas15.3%

Transportation29.8%

Bioenergy and Energy Efficiency in Viet Nam

While the project does include small activities on Solar PV, the focus in the sub-sector of renewable energy lies on bioenergy.

The importance of agriculture to the country’s economy provides a large potential for the development of power production from bioenergy in Viet Nam. Biomass from the agriculture and forestry sectors can generate the equivalent of 10 million tons of oil per year. Annual potential for energy from biogas, which can be collected from landfills, animal excrements and agriculture residues, is approximately 10 billion m3. In its PDP VII revised of March 2016, the Government of Viet Nam has set out the targets for the production of electricity from biomass to be 1% of the total power generation by 2020 and 2.1% by 2030 respectively. With regard to energy efficiency, the PDP VII revised identifies an energy saving potential of 10% of total electricity consumption by 2020.

MOIT/GIZ Energy Support Programme Since 2009, GIZ has been supporting the Government of Viet Nam to achieve its political targets on the promotion of renewable energy and energy efficiency by proposing measures to overcome the barriers to private investment in the country. A number of projects have been implemented or are currently ongoing:

• Wind Energy: 2009-2012• Bioenergy: 2012-2015• Support to the Up-scaling of Wind Power: 2014-2018• Renewable Energy and Energy Efficiency: 2015-2018• Smart Grids for RE & EE: 2017-2021

Implemented by

Ministry of Industry and Trade

Funding AgencyGerman Federal Ministry for Economic Cooperation and Development (BMZ) Implementation of a component on Climate Finance Readiness (CF Ready) on behalf of GIZ HQ (co-funded by USAID and Czech Government)

Budget EUR 3mil (plus EUR 0.9mil for CF Ready)

Timeframe 03/2015 – 02/2018

Political Partner Ministry of Industry and Trade

Implementing Agency General Directorate of Energy

The two fields of cooperation under the 4E project, “Renewable Energy” and “Energy Efficiency”, are equally important and both incorporate the need for a switch towards a cleaner energy supply and a more efficient use of energy resource. Each field of cooperation consists of three action areas, each geared towards the development of the sub-sectors and the facilitation of (in particular private sector) investment.

Renewable Energy (RE)

1. Action Area 1: Legal and Regulatory Framework Conditions Activities include support to national and provincial solid biomass planning, a macro-economic cost-benefit analysis of RE sources, investment guidelines for biomass and waste to energy, as well as the development of a potential financing mechanism for bioenergy projects.

2. Action Area 2: Capacity Development Capacity needs assessments as well as various short term formal and on-the-job trainings for policy makers, project developers and investors, as well as local consulting companies are designed and implemented for the promotion of a sustainable bioenergy sector development.

3. Technology Cooperation The action area on technology cooperation is based on the notion that adequate technology transfer and the involvement of the private sector lead to locally adapted and most suitable technical solutions and business models for RE production. As a result, project activities include a wide range of market information dissemination activities – such as stakeholder dialogues, information fora and workshops on PV and biomass

– support to the establishment of match-making events and business partnerships, as well as through sub-sector analyses and the development of a concrete pipeline by way of Pre F/S development for a selection of CHP biomass energy projects.

Energy Efficiency (EE)

1. Action Area 1: Legal and Regulatory Framework Conditions The improvement of energy audit procedures as well as energy management and monitoring for increased energy savings is the main focus of this action area. Activities include a review of the current EE regulatory framework and existing energy audits for gaps identification and better energy audit quality; the development of an EE database for better monitoring and management.

2. Action Area 2: Capacity Development Activities in the area of capacity development include e.g.: a capacity (needs) assessment of energy service providers and, on the basis of the assessment, the development of a respective capacity development programme; training on systematical stocktaking and data-analysis as well as on the monitoring of the effectiveness of EE support mechanisms; training on the application of best practices and proven standards for successful energy audit services to businesses who wish to invest in EE measures.

3. Action Area 3: Technology Cooperation Technology cooperation is being facilitated notably through the organization of study tours and – where feasible – match-making of research organizations as well as private sector companies to reinforce collaboration between Vietnamese and German actors.

Imprint Published by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

Registered offices Bonn and Eschborn, Germany

Energy Support Programme Unit 042A, 4th Floor, Coco Building, 14 Thuy Khue str., Tay Ho District, Hanoi, Vietnam T + 84 4 39 41 26 05 F + 84 4 39 41 26 06 office.energy@giz.de www.giz.de/viet-nam

As at May, 2016

Printed by Incamedia Alley 1, lane 1/5, house 38, Au Co str., Tay Ho dist., Hanoi, Vietnam

Design and layout Incamedia Alley 1, lane 1/5, house 38, Au Co str., Tay Ho dist., Hanoi, Vietnam

Text Ingmar Stelter

GIZ is responsible for the content of this publication.

On behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ)

The Renewable Energy and Energy Efficiency (4E) Project