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[email protected] USAID VIETNAM LOW EMISSION ENERGY PROGRAM (V-LEEP) REC Support to EESD – Deliverable 1: REC Stocktaking and Mapping Report (FINAL) April 23, 2021 This report is made possible by the support of the American people through the United States Agency for International Development (USAID). The contents are the sole responsibility of Vietnam Low Emission Energy Program and do not necessarily reflect the views of USAID or the United States Government 1 USAID VIETNAM LOW EMISSION ENERGY PROGRAM (V-LEEP) REC Support to EESD – Deliverable 1: REC Stocktaking and Mapping Report (FINAL) Prepared for: USAID/Vietnam, Environment and Social Development Office Prepared by: Contract No. AID-440-TO-15-00003 April 23, 2021 The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. 2 Disclosure: During the preparation of these REC reports, one of the independent contractors was also contracted with the I-REC Standard. While the timing of these overlapped, recommendations included in these RECs reports are without bias toward any particular international REC organization. 3 Table of Contents Acronyms ............................................................................................................................ 8 Executive Summary .......................................................................................................... 10 Introduction ....................................................................................................................... 11 W1.1 Review of International Experiences in REC Tracking and Management Systems and the Role of REC Mechanism NDCs Implementation ................................ 12 1. Background ................................................................................................................ 12 1.1 From national SDG commitments to corporation sustainable initiatives ............... 12 1.2 Overview of corporate clean energy procurement options ................................... 18 2. REC Systems .............................................................................................................. 19 2.1 How RECs Work .................................................................................................. 19 3. Role of RECs in the implementation of NDCs .......................................................... 26 4. Pre-conditions for successful application of REC mechanisms in Vietnam based on international leading practices ........................................................................ 29 4.1 Legal and institutional review of other jurisdictions for tracking generation and consumption of RE in key markets including Singapore, China, and US to meet reporting criteria .............................................................................................................. 30 4.2 Technical ability to record and track power deliveries .......................................... 33 W1.2 Review of current institutional and legal framework related to RECs in Vietnam .............................................................................................................................. 36 5. Review of the existing legal, regulatory, and institutional framework for RECs in Vietnam .............................................................................................................................. 36 5.1 Overview of climate change/green growth policies, laws, and regulations in Vietnam, with regard to energy sector and NDC implementation ..................................... 36 5.2 Institutional framework for carbon tracking/management: national MRV system, sector MRV systems, NDC/BUR reporting ...................................................................... 43 6. Current practices for GHG reduction certificates in Vietnam ................................. 53 6.1 Overview of the GHG reduction certificates market in Vietnam ............................ 53 6.2 Application of GHG reduction certificates in Vietnam: national focal points, registrars, transaction management ................................................................................ 56 7. Gap Analyses ............................................................................................................. 57 7.1 REC in different RE mechanisms: how ownership would be determined in FIT, auctioning, and DPPA ..................................................................................................... 57 7.2 Analyses of gaps, barriers, and risks with reference to international leading practices.......................................................................................................................... 59 W1.3 Assessment of Market Demand for RECs in Vietnam ........................................... 62 8. Overview of the current REC market in Vietnam ..................................................... 62 8.1 Advent of the RECs market in Vietnam ................................................................ 62 8.2 Size of current market .......................................................................................... 65 9. Potential for development of RECs market in Vietnam ........................................... 66 9.1 Potential market players ...................................................................................... 66 4 9.2 Size of the potential market, considering future RE projects in PDP, RPS, and other compulsory compliance metrics. ............................................................................ 68 10. Status of RECs Markets in Vietnam .......................................................................... 69 10.1 List of REC registrars active in Vietnam ............................................................... 69 10.2 Ownership and registration of RECs by operating RE GENCOs in Vietnam ........ 69 10.3 Review of RECs services currently provided in Vietnam ...................................... 73 10.4 Review of current gaps and barriers in current RECs operations in Vietnam ....... 75 Annex 1. Projects in Vietnam Registered with I-RECs ................................................... 76 Annex 2. REC tracking system fees schedules .............................................................. 79 Annex 3. List of Potential Wind REC Registrants ........................................................... 81 Annex 4. List of Potential Solar REC Registrants ........................................................... 83 Annex 5. List of Potential Hydro REC Registrants ......................................................... 88 Annex 6. List of Potential biomass, waste and biogas REC Registrants ...................... 93 Annex 7. Avoided Cost Tariff for small hydro power projects in year 2020 .................. 95 5 List of Figures Figure 1. Mission Workflow ......................................................................................................... 11 Figure 2: Carbon Taxes Around the World ................................................................................. 15 Figure 3. Progress to 100 percent Renewable Electricity versus Target Date for RE100 Companies in Vietnam ................................................................................................. 16 Figure 4. REC Tracking Systems in North America .................................................................... 31 Figure 5. GVN Organizational Setup for Preparing the Market Readiness Proposal ................. 44 Figure 6. Organizational Model of CDM Vietnam ....................................................................... 46 Figure 7. Illustrative data and incentive flow within a possible NAMA Structure ........................ 47 Figure 8. Proposal of reporting schedule .................................................................................... 48 Figure 9. Proposed MRV coordination process at three levels................................................... 49 Figure 10. Proposed MRV system for NAMAs in cement sector ................................................ 49 Figure 11. Responsibilities of the agencies in the energy information system of Vietnam ......... 50 Figure 12. Institutional Arrangement of National GHG Inventory System in Vietnam ................ 52 Figure 13. The institutional arrangements of the JCM in Vietnam .............................................. 55 Figure 14. Accounting of Units and Monitoring of Emissions ..................................................... 57 Figure 15. CER price in the compliance market in the recent two years .................................... 63 Figure 16. Share of power ownership in Vietnam ....................................................................... 67 Figure 17. Number of registered I-REC projects over years ....................................................... 72 List of Tables Table 1: Measuring Compliance with RE Commitments ............................................................ 17 Table 2: Credible RE Claim and Scope 2 Criteria ...................................................................... 20 Table 3: Attributes Tracked by System (U.S RPS example) ...................................................... 21 Table 4: Projects in Vietnam Registered with TIGR Registry ..................................................... 25 Table 5: Comparison of I-RECs and TIGR ................................................................................. 25 Table
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