Developing renewable energy in Vietnam

Posted at: MONday - 24/11/2014 13:48 - post name: Cộng tác viên

Developing renewable energy in Vietnam

As estimated by the Organisation of Oil Exporting Countries (OPEC), the global demand for energy will increase by 60 percent in 2040 compared with 2010 and fossil fuels being the main source.

In the context of complicated climate change, which was partly caused by the use of fossil fuels, it is of critical necessity to seek for alternative sources of energy, especially when people are overexploiting fossil fuels for their socio-economic development. It is predicted that fossil fuels will become exhausted in 50-70 years and renewable energy is one of the alternatives for them.

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Renewable energy is the kind of unlimited energy resource, including solar and biomass energy. Such kind of clean energy do not pollute the air and cause global warming or greenhouse effect. They are also cheap resources of energy. However, initial investment for instalment of the equipment is usually large.

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With rapid economic growth in recent decades, Vietnam has huge demand for energy, especially in 20-30 years. In the context of the exhaustion of fossil fuels in the country and the country’s dependence on the imported energy, it is a must to develop renewable energy to ensure energy security, protect the environment, adapt to climate change and create jobs.

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With its favourable geographical position, Vietnam has huge potential for the development of renewable energy. Vietnam may produce as much as 10 billion cubic meter of biogas (equivalent to 10 million tons of oil) every year. In addition, solar energy, hydro power and wind power are other potential sources of energy of the country.

However, Vietnam has failed to tap the potential. The exploitation and use of renewable energy has proved ineffective. Le Duong Quang, Deputy Minister of Industry and Trade said the renewable energy accounts for only 6.3percent of the total energy of Vietnam. This inadequate development of renewable energy are attributed to unfavourable policies and low development of technology which leads to large initial investment.

It is expected that in 2015 Vietnam will have to import coal to meet its demand for economic development.

Being aware of the importance of renewable energy, the government has issued various policies to encourage the development of renewable energy, set a target for using renewable energy and develop a competitive market for energy.

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Accordingly, on December 12, 2007, the Prime Minister issued the Decision No. No. 1855/QD-TTg approving Vietnam’s National Energy Development Strategy up to 2020, with 2050 vision to encourage the development and use of renewable energy. The strategy is aimed at increasing renewable energy’s market share from 3 percent to 5 percent in 2020 and 11 percent in 2050.

In order to meet the target, the government has had favourable tax policies for investors. Accordingly, investors will enjoy exemption of import and land-use taxes.

However, it is not attractive enough for investors to implement projects to develop renewable energy and commercialised it in Vietnam. Inadequate financial mechanism and management of such projects are also hindering the development of renewable energy.

Therefore, it is necessary to issue more favourable policies for those enterprises investing in renewable energy and approve the Law on Energy to facilitate the development of such energy.

Nguyet Minh

Translated by Dic

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