From Zero to hero, the various case of Vietnam’s renewable energy

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From Zero to hero, the various case of Vietnam’s renewable energy

In January, a humble “S-shaped” country in South East Asia became the talk of the town. Having been “chasing the sun”, Vietnam saw a boom in rooftop solar installations at the end of 2020. It beat all forecasts, even that of Bloomberg, who made an entire podcast episode featuring Vietnam’s race to green energy.

Before we get to the real meat of what happened, let us first take a step back to look at the whole relationship between energy and climate, and why moving to green energy matters.

  • All living things on the planet contain carbon [insert Sir. David Attenborough‘s voiceover here]. When organisms died hundreds of millions of years ago, their remains got buried deep under layers of sediment and rock. Under high heat and pressure, they were slow-cooked into carbon-rich deposits we now call fossil fuels, i.e. coal, oil and natural gas.
  • Fast forward to the 18th century. The Industrial Revolution unlocked the huge potential of fossil fuels as an abundant source of energy. Since then, fossil fuels have rapidly established themselves as the major source of power, supplying about 84% of global energy in 2019.
  • Now back to Chemistry 101: when we burn fossil fuels for energy, the carbon atoms (C) that have been stored away for millennia meet with oxygen (O), releasing an enormous amount of CO2. Unsurprisingly, 81% of total CO2 emissions from 1959 to 2019 comes from burning oil, coal, and natural gas. This is bad news for our friend Earth, as CO2 is a long-lived greenhouse gas capable of trapping heat from sunlight, causing global warming.
  • The answer is no…if 1) we move away from fossil fuels and into low-carbon, renewable energy (RE) and 2) we reduce energy consumption and increase energy efficiency. In this issue, we’ll zoom in on the first solution.
  • From 1965 to 2019, the share of renewables (e.g. solar, wind, hydropower) in the energy mix almost doubled from 6% to 11%. This seems…puny compared to that of fossil fuels. On the bright side, the recent net-zero emission targets set by the world’s major economies as well as big corporates in an effort to slow climate change are expected to accelerate renewables’ growth.
  • Vietnam is also encouraging a shift from fossil fuel to renewables, in order to meet its CO2 emission mitigation target.

Vietnam – from zero to hero on the renewables

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If you have visited Vietnam a few times over the past decade, you might have been amazed to see how quickly the country has changed. Vietnam has seen remarkable growth through the rapid expansion of the industrial sector, owing much of this success to COAL.

With more factories popping up, electricity demand grew 252% between 2018 and 2010. Coal took the spotlight from hydro as a primary source of electricity generation and took up a 47% share in 2018, compared to 21% in 2010. The demand for coal is due to increase as demand for electricity is expected to grow at 8.5% per annum over the next 5 years.

Now, if you have seen even one piece of media coverage of Greta Thunberg, you’ll instinctively know more coal does not sound great. So, what about using clean renewable energy instead? Isn’t Vietnam blessed with tropical sunshine and a windy 3,260 km coastline? Yes and yes.

In 2017, the government realised the natural endowment on their footsteps along with a bunch of important stuff like:

As such, a significant shift in the power market happened when the government offered a generous feed-in tariff of 9.35 US cent/KWh for solar projects, along with some very important policies. This scheme pays producers under long-term contracts a set fee for each kilowatt-hour they generate using solar panels.

Imagine: someone offers you a fixed payment for 20 years for a business you haven’t even started, would you jump on the opportunity? I hope you would because all the solar developers did in Vietnam. That has led Vietnam from zero to hero in 2 years: by the end of 2020, total installed solar power exceeded 19,400 MWp, ~25% of total national installed electricity capacity. That is installing about 6 coal plants’ worth of solar in 2020, by the way. That is HUGE and it shows that there’s no lack of technology or talent ready for the renewable game.

All well and good, except when peak supply does not match peak demand

Solar developers have already overcome numerous challenges, such as navigating the nascent market and regulations (read: uncertainty), to deliver such an impressive outcome in barely 2 years. Unfortunately, the biggest challenges still await.

Unlike conventional power plants, RE doesn’t generate electricity on demand. When the sun works at its hardest at noon, it leads to an oversupply and an overload of the existing transmission lines. But there’s a lack of supply when the sun goes down. So what’s the point of having so much solar power but you can’t use it when you want?

Many experts are suggesting using batteries and pumped hydro to store excess energy. Currently, pumped storage at hydropower plants is the largest energy storage device we’ve got, but it’s limited by geography and water availability. Meanwhile, batteries are getting cheaper but it’s not yet cost-effective.

Source: ARENA

So the most long-term sustainable solution is updating the existing transmission and distribution infrastructure, along with using batteries. This combo will help us use renewable energy a lot more flexibly. If you have a brand new Ferrari, you’d want to build nice long roads to ride it whenever you want! The questions then remain: where’s the money – $130 billion to be exact – and more importantly, how soon can we fix this?

Vietnam as the leader in renewable energy – the make-or-break moment

The government will need to wait a while to reap the benefits from developing the renewable energy infrastructure. Meanwhile, securing enough on-demand power in the short-term for 96.46 million people and the growing industries proves to be a huge challenge. This could be the main reason we are still seeing news about new coal plants in development despite international scrutiny.

In the latest Draft Power Development Planning VIII, the government reconfirmed the need to build new coal plants but also explored many instruments to help develop Vietnam’s renewable energy market. Vietnam’s success in becoming a leader in energy transition will depend on the implementation of PDP VIII and many also argue, the commitment to stop developing new coal plants.

Source: Unsplash
At individual level, what could we do to support the energy transition from fossil fuels to renewables? 

If you live in Vietnam, you could consider installing, or advising your parents to install, solar panels on your rooftop. This will require some upfront investment but will save your family on electricity bills in the long run. GreenID’s “Triệu Ngôi Nhà Xanh” (Million Green Homes) project is offering financial support and technical advice for interested households. Learn more here.

Consider switching to a green energy provider if you have this option abroad. It takes 2 minutes and it’s very likely to save you money every month. Solar and wind energy are getting increasingly cheaper compared to fossil fuels. Just google “how to switch electricity suppliers”. We have also been campaigning for our offices to switch as well!

But don’t forget, whether our houses and offices are powered by renewable energy or not, saving electricity can go a long way. It’s cheaper, greener and the easiest climate action!

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