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Research Report GREEN TECHNOLOGY RESEARCH REPORT This project is funded by the European Union Useful contacts EU-Vietnam Business Network (EVBN) 15th Floor, 5B Ton Duc Thang, District 1 Ho Chi Minh City, Vietnam TUseful : +84 (0) 8 contacts38 23 95 15 (Ext:105) www.evbn.org Further reading: Electricity Regulatory Authority of Vietnam (ERAV) www.erav.vn Overview of energy in Vietnam, Vietnam Institute of Energy www.ievn.com.vn The General Directorate of Energy of Vietnam www.renewables.gov.vn Vietnam Academy of Science and Technology www.vast.ac.vn Vietnam energy overview 2013, Asia Pacific Energy Research Centre (APERC) www.aperc.ieej.or.jp The Landmark, 15th floor, 5B Ton Duc Thang St., District 1, Ho Chi Minh City, Vietnam This publication has been produced with the assistance of the European Union. Tel. +84 (0)8 3823 9515 Fax +84 (0)8 3823 9514 The content of this publication are the sole responsibility of EVBN and can in no way be www.evbn.org taken to reflect the views of the European Union TABLE OF CONTENT 0. INTRODUCTION 4 1. VIETNAM’S ENERGY SECTOR 6 1.1. Power consumption and production 6 1.2. Power development 10 1.2.1 The challenge in energy use 10 1.2.2 Renewable energy development 11 1.2.3 Supporting legal framework 13 2. VIETNAM’S WASTE SECTOR 16 2.1. Waste management 16 2.2. Waste recycling 18 2.3. Management issues 19 3. VIETNAM’S WATER SECTOR 21 3.1. Water resources 21 3.2. Wastewater treatment 24 4. OTHER MARKETS 25 4.1. Sustainable buildings and infrastructure 25 4.2. Smart Grid 27 5. THE KEY GROWTH DRIVERS AND CHALLENGES 28 5.1. Key growth drivers 28 5.2. Challenges 33 3 EVBN IT Sector 00 INTRODUCTION The term “Green technology”, also known as “Clean technology” refers to all forms of technology that make products or processes more environmentally friendly. The OECD defines the term “Green technology” as “Clean Technology” encompassing all technical measures taken at various industries to reduce or even eliminate at source the production of any nuisance, pollution, or waste, and to help save raw materials, naturel resources, and energy. (OECD, 1989 The Promotion and Diffusion of Clean Technologies in Industry, Paris.)The term “green technology” will also be used in this report. Green technology helps to reduce adverse effects on the environment as well as improving productivity, efficiency and operational performance of the technology itself. The purpose of this paper is to provide an overview of green technology in Vietnam: the current situation, the long term and immediate issues as well as growth potential for green technology as a new industry. The three following chapters refer to the power sector, the water sector and the waste sector as the three main categories play the most important role in green technology in Vietnam. The descriptions are closely linked to the usage of renewable energy which the Vietnamese government supports through different measures. The field of renewable energy also attracts quite a number of foreign investors. The report also highlights opportunities and barriers in the green technology sector and sheds light on some major development. To put Vietnam’s strategic approach for green technology into perspective, main features of three neighboring countries are briefly outlined as well. 4 EVBN IT Sector Malaysia's approach towards green growth is centered around the concept of sustainable consumption and production, which puts the emphasis on green technological innovation as a way to achieve green growth (Adham et al., 2013). In 2010, the country established a Green Technology Financing Scheme amounting to RM1.5 billion (about USD 350 million) (Malaysia Ministry of Energy, Green Technology and Water, 2012). The scheme issues credit guarantees of 60% for companies developing or using green technology. The Green Lane Policy for Innovative Malaysian Small and Medium Enterprises provides loans with subsidized interest rates, tax exemption and preferential government procurement to companies providing green products and services. Malaysia is also developing environmental certification and labeling schemes that match international standards. Thailand plans to support private green research and development using loans and tax incentives and intends to create centers to encourage the application of agricultural technologies with high productivity but low natural resource intensity (Thailand National Economic and Social Development Board, 2011). In both Thailand, and Malaysia innovative technologies have been developed and used to reduce, re-use and recycle wastewater and solid waste in urban areas (Thailand National Economic and Social Development Board. 2011). Further green technology development is promoted through investment in R&D and international knowledge sharing platforms. The Philippines National Development Plan 2011-2016 provides support for the development of environmentally-friendly and resource-efficient technologies along the agricultural value chain, in partnership with selected higher education institutions, local government units and businesses. Both countries are investing in R&D for non-food feedstock biofuels. Innovative technologies for sustainable development have also been used elsewhere in the economy. 5 EVBN IT Sector 01 VIETNAM’S ENERGY SECTOR 1.1 Power Consumption and Production Power Consumption Vietnam’s energy sector has been growing constantly in recent years in production, distribution and imports mirroring the country’s economic development. The three main resources of Vietnam’s energy are crude oil, coal and electricity while hydroelectric electricity has played the most important role for a long time. Regarding energy consumption, the total consumption of primary energy in Vietnam grew by the average of 6.54% annually from 2000 to 2009 and reached a total of 57 million TOE (Tonne of Oil Equivalent) at the end of 2009. Regarding the consumption structure, heavy industry continued to take the biggest share and even increased its stake from 47.4 % to 52 % in total consumption in 2006 and 2010, respectively. Household consumption accounted for the second largest share but decreased relative to other sectors from 42.9% in 2006 to 38.2% in 2010 due to the fast-paced industrialization in Vietnam. The remaining part is shared between services, agriculture and other sectors with approximately 10% of electricity consumption. Electricity consumption by sectors during 2006-2010 2006 2007 2008 2009 2010 Item (%) (%) (%) (%) (%) Agriculture 1.1 1.0 1.0 0.9 1.1 Industry 47.4 50 50.7 50.6 52.5 Services (Commerce, Hotels and Restaurant) 4.8 4.8 4.8 4.6 4.5 Household consumption 42.9 40.6 40.1 40.1 38.2 Others 3.8 3.7 3.5 3.7 3.7 Source: Summarized from information given in the Master Plan VII 6 EVBN IT Sector It is worth noticing that the growth rate of power consumption exceeds the GDP growth rate in the same period significantly. For example, during 1995-2005 the annual growth rate of power consumption was over 14.9% while GDP growth rate was only 7.2%. The highest growth of power demand was found in the industrial sector (16.1%) then followed by the residential sector (14%). In the future, according to the National Power Development Master Plan VII, the electricity demand of the country will continue to grow by 14-16% per year in the period 2011-2015 and then slow down to 11.15% per year in the period 2016-2020 and 7.4–8.4% per year in 2021-2030. Power Production The below tables illustrates that Vietnam’s capacity to produce electricity ranked third after Indonesia and Malaysia. Electricity consumption /person Country Capacity (MW) (kWh/person) Cambodia 104 635 Indonesia 507 43,528 Laos 339 2,556 Malaysia 3,221 24,500 Philippines 524 16,223 Singapore 7,696 10,477 Thailand 1,962 31,451 Vietnam 1,104 26,475 Source: Indexmundi, IE, 2011 7 EVBN IT Sector In term of production capacity, the estimation for Vietnam’s total energy capacity until 2050 is as follows: Coal (from 95 to 100 million tons a year); Crude oil (approximately 21 million tons a year, mainly for domestic oil and gas companies); Gas (16.5 billion m3 per year); Hydroelectric (60 billion kWh a year) and recycle energy (from 3500 to 4000 MW per year). Thus, recycle energy still accounts for a very small portion of energy capacity in Vietnam. (Vietnam Academy of science and technology, 2011, http://www.vast.ac.vn) Structure of power sources by capacity and yield for the period 2010-2020 with outlook to 2030 2020 2030 Share in Share in Power source total Share in total Installed installed total Installed installed Share in total Capacity capacity electricity Capacity capacity electricity (MW) (%) yield (%) (MW) (%) yield (%) Coal thermal power plants 36,000 48.0 46.8 75,000 51.6 56.4 Gas turbine thermal power plants 10,400 13.9 20.0 11,300 7.7 10.5 LNG turbine thermal power plants 2,000 2.6 4.0 6,000 4.1 3.9 Integrated hydropower plants 17,400 23.1 19.6 N/A 11.8 9.3 Pumped-storage hydropower plants 1,800 2.4 5,700 3.8 Biomass power plants 500 2,000 5.6 4.5 9.4 6.0 Wind power plants 1,000 6,200 Nuclear power plants N/A N/A 2.1 10,700 6.6 10.1 Import 2,200 3.1 3.0 7,000 4.9 3.8 Total 75,000 100 100 146,800 100 100 Source: Summarized from information given in the Master Plan VII 8 EVBN IT Sector Structure of power sources by 2020 Source: Overview of energy in Vietnam, 2011, http://ievn.com.vn Total CO2 emissions calculated for the energy sector in 2010 were: 56 024 kt-C (Measured by emissions standard of APEC and 2006 IPCC).
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