Search

4.50. Viet Nam aims to achieve higher energy efficiency and conservation, in line with the Law on Energy Saving and Efficiency. Prime Minister's Decision No. 280/QD-TTg, issued on 13 March 2019, approved the National Energy Program on Efficiency (VNEEP3) for the period 2019 30, with energy saving targets of 5%-7% for 2025 and 8%-10% for 2030. Prime Minister's Decision No. 04/2017/QD-TTg, issued on 9 March 2017, updated the list of devices and equipment subject to energy labelling, the application of the minimum energy efficiency requirements, and the relevant implementation roadmap until 2020. The VNEEP3 specifies savings potentials for different industries, such as beverages, plastics, paper, chemicals, and heavy industry products. The authorities indicate that the VNEEP for the period 2011-15 contributed to savings of 5.65% of the total energy demand during that period. Similarly, Prime Minister's Directive No. 20/CT-TTg (on strengthening electricity saving for the period 2020-25), issued on 7 May 2020, seeks to save at least 2% of the total power consumption annually. In 2019-20, the Government approved VND 10 billion for the VNEEP3 for policies and communication on economical and efficient use of energy. Prime Minister's Directive No. 30/CT-TTg, issued on 27 November 2015, urged several ministries to enhance control on investment projects that intensively use energy and resources and potentially cause environmental pollution. These ministries were requested to prepare technical regulations and energy-use norms applicable to each manufacturing industry. Moreover, the National Action Plan for Green Growth in the period 2014-20 promoted the reduction of greenhouse gas emissions and the use of clean and renewable sources of energy in a wide range of activities in agriculture and industry.

4.51. (...) Prime Minister's Decision No. 11/2017/QD-TTg (on the mechanism for the promotion and development of solar-power projects in Viet Nam), issued on 4 April 2017, established favourable conditions for the development of solar-power projects; Prime Minister's Decision No. 37/2011/QD-TTg (on the mechanism supporting the development of wind-power projects in Viet Nam), issued on 29 June 2011, as amended by Prime Minister's Decision No. 39/2018/QD-TTg, issued on 10 September 2018, does the same for wind-power projects. Besides tax and import incentives (Section 3.3.1), these Decisions aim to ensure a higher price than the average retail price for electricity produced by these projects. The authorities note a substantial uptake of solar- and wind-power projects, mainly by private investors.

4.54. In 2018, the electricity generation capacity was 49,410 MW, mainly from coal-fired power plants and hydropower generation, which accounted for 38% and 34%, respectively. The remainder of the installed capacity consisted of gas and oil-fired turbines (18.0%), renewable energy (8.0%), and imports (1.2%). In 2016, the majority of the electricity supply was delivered by hydropower and coal-fired plants, which accounted for 42.1% and 34.0% of total electricity output, respectively; (...).

4.55. (...) Recently, severe climate conditions also worsened the production capacity of hydropower generation, and increased the risk of power shortages.

4.59. The state owned Viet Nam Electricity (EVN) plays an important role in the electricity market, as it intervenes, through its dependent units and subsidiaries , in all segments (generation, transmission, wholesale, and retail distribution). In 2019, the EVN's generation corporations (its hydropower plants, EVN Genco 1, EVN Genco 2, and EVN Genco 3) [62] accounted for 53% of electricity production. (...) independent power producers (IPPs) accounted for the remaining 27% in the same year. [63] (...)

[62] In total, 55 power-generation plants are under the management of the EVN. Eleven strategic hydropower plants are dependent units of the EVN, while all other generation plants (hydropower, coal-fired, gas-fired, and oil fired) were redistributed among the three independent EVN Gencos initially operating as one member liability companies.
[63] Currently, the largest IPP and the largest foreign-invested power project is the Mong Duong 2 Power Plant in Quang Ninh province. An investment of USD 2.1 billion was needed for the construction of this coal-fired power plant, which has a capacity of 1,240 MW. Another 79 power plants (hydro, thermal, gas, and renewables) operate in Viet Nam, 74 of which have a production capacity greater than 30 MW.

4.62. Regarding wholesale, the EVN's National Load Dispatch Centre is responsible for the system and market operations. (...) IPPs with a production capacity of at least 30 MW can also sell directly to wholesaler purchasers, while BOT projects and renewable generation plants (other than hydropower) participate indirectly in the market.

4.67. In 2016, the Prime Minister approved a revised version of the seventh Power Development Plan (PDPVII), which covers the period 2011-20. (...) The revised PDPVII also provided for the increase of renewable energy resources from 3.5% of total electricity production in 2010 to 4.5% in 2020 and 6.0% in 2030. Public interviews and press articles in early 2020 suggest a boost on targets for solar and wind generation, and a lowering of coal capacity in the long-term. The Electricity and Renewable Energy Authority (EREA), another agency under the MOIT, was established in 2017 to be in charge of the infrastructure planning, development, and promotion of the renewable energies. The authorities note that renewable power is expected to represent about 35%-40% of the installed capacity and 25%-30% of the output by 2030. Wind, solar, and biomass power are expected to account for 15%-20% of the installed capacity and 10%-15% of the output by the same period. These objectives are expected to be reflected in the ongoing drafting of the new Power Development Plan VIII (PDPVIII). [78]

[78] In addition, the development of a power grid with neighbouring countries, the adaptation to climate change, the reliability of the power supply, and the promotion of investment in electricity development are considerations for the drafting of the PDPVIII.

4.83. MOIT and MOF Joint Circular No. 39/2014/TTLT-BCT-BTC, (...) issued on 24 June 2016, provides further details on the calculation of the base price considering elements such as cost-insurance-freight (c.i.f.) price, import duty, special consumption tax, (...) environmental protection tax, other taxes, and deductions according to current law provisions. The price is calculated based on the average over 15 days.

4.85. As at January 2019, the environmental protection tax levied on items that can cause a negative environmental impact was adjusted for petroleum products. The current tax consists of specific rates ranging from VND 1,000 per litre (fuel) to VND 4,000 per litre (gasoline, except ethanol) set from a specific tax frame.

4.91. Prime Minister's Decision No. 879/QD-TTg, issued on 9 June 2014, approved the Industrial Development Strategy to 2025, Vision to 2035. Industries whose development is prioritized by the Strategy include (...) renewable energy industries. (...).