Coal power development: Does Vietnam need to go against the global trends?

Pha Lai Thermal Power

Although still affirming to promote the development of renewable energy and gradually reduce the proportion of coal-fired power according to the general trend of the world, the draft of the power sector development planning for the 2021-2045 period of Vietnam’s Ministry of Industry and Trade still proposes further development of nearly 17 GW of coal power in the period 2021-2030, an increase of nearly 83% compared to current capacity and coal-fired thermal power still accounts for up to 41% of total electricity production in 2030. Why is there this paradox?

On February 22, 2021, a draft of the “Power Industry Development Plan 2021-2045“, also known as Power Planning 8 (QHD 8) or Master Plan 8 (TSD8), was posted on the ministry’s website for collecting feedbacks from agencies and departments. This move has been highly appreciated for the first time the full text of a draft Vietnamese electricity planning has been publicly available and consulted. Although there are many points evaluated for progress, this draft has also been criticized a lot, especially in the issue of coal-fired thermal power planning.

Coal thermal power: Cheap or expensive?

The recommendations of the Vietnam Sustainable Energy Alliance (VSEA), the Vietnam Alliance for Non-Infectious Diseases (NCDs-VN), and the Vietnam Rivers and Rivers Network (VRN) maybe some of the most important contributors for the QHD8. Sent to the Ministry of Industry and Trade on March 2, 2021, which means that eight days after the draft is announced, the recommendations of the three coalitions state: The draft shows that Vietnam is still prioritized the development of coal-fired power in the next 10 years (2021-2030) because nearly 17 GW of new coal power has been added to the system, increasing Vietnam’s coal power capacity from 20.4 GW in 2021 to 37.3 GW in 2030. It is recommended that the continued development of coal-fired power in Vietnam is contrary to the trend of closing down coal power plants of the world to protect the environment and people’s health. Therefore, these three coalitions have petitioned the Ministry of Industry and Trade to “not develop new coal power projects, especially in the next 10 years period.”

Explaining this recommendation, in an online forum over the weekend, Ms. Nguyen Thi Hang, VSEA coordinator, said that the coal-fired power development plan of QHD8 has many concerns. The first thing she mentioned is that she has not seen concrete calculations of environmental and social impacts, while these impacts are often the cause many countries deciding to break up with coal-fired power as well.

In the strategic environmental assessment published on the website of the Ministry of Industry and Trade, we are startled because chapter 3, the most important chapter assessing the social environment of different types of energy is blank. We do not know why there is no information available on the socio-environmental assessment and the quantification of the monetary funding of these impacts,” Ms. Hang said.

She said that the Clean Energy and Clean Air Research Center (CREA) recently conducted a study to assess the impact of coal-fired power plants in 10 localities that plan to add new projects as planned QHD8 and this study has given very alarming numbers. Specifically, when built and operated, 16 new coal power projects with a total capacity of about 22GW of QHD8 will cause nearly 1,000 premature deaths in Vietnam and cause economic loss to society (due to spending medical fees, reduced productivity, and life expectancy) is estimated at $270 million annually.

With the life cycle of a coal-fired project at least 30 years, accumulation is a very large number, very remarkable. Within 30 years there will be 46,000 premature deaths and the economic cost will reach $8 billion,” she continued, adding that these costs will make the real costs of using coal-fired power not cheap as we used to think.

In 2017 we have a quick quantification of how much of the environmental and social impacts are included in the electricity price. Specifically, if you do not take into account the environmental and social impacts, coal electricity costs $7.3 cents/kWh, but if you do, it is over $12.4 cents/kWh and becomes the most expensive type of electricity at the time,” said Ms. Hang.

Dr. Ngo Duc Lam, an independent expert, said that coal-fired power has the advantage of creating a stable power source, helping to compensate for the instability of wind and solar power due to heavy dependence on weather and only focus on generation electricity at certain times of the day. However, in addition to the negative environmental and social impacts, the promotion of coal-fired thermal power development as in the QHD8 also brings many other risks, including the ability to mobilize capital and coal resources. fuel.

He said that the capital investment is very large, so Vietnam often has to borrow foreign capital to develop this type of energy. However, the reality in recent years shows that it is very difficult to get loans to investors because, since the UN Conference on Climate Change (COP 21) in 2015, the world has tended to turn to renewable energy and limit coal power development to reduce greenhouse gas emissions.

The world currently has technical barriers not lending money to make coal-fired thermal power. Not only World Bank, ADB, other investors also withdraw and stop building coal-fired power plants, so since 2018, but coal-fired thermal power in Vietnam has also been almost undeveloped and has to quickly switch to renewable energy,” Mr. Lam said.

Looking at the coal material issue, he said that according to the QHD8, it is expected that Vietnam will have to import up to 55 million tons of coal by 2030 and 80-100 million tons by 2045 while the coal price is estimated to increase 5% on average. According to him, with this plan, Vietnam will depend heavily on external supply, while the ability to import from the sources identified in the draft forecast faces many difficulties. He said that in the context of domestic renewable energy developing strongly, even in surplus and large gas resources from the Ken Bau field are forecasted to be feasible from 2028, Vietnam needs to consider whether to import coal and develop coal thermal power as much as the draft proposed or not.

The lessons of coal-fired thermal power development in the previous period (2016-2020) show that this type has many difficulties in capital mobilization, local people and authorities do not support, … leading to only about 57,6% of the plan according to the adjusted QHD7. In the past 5-year period, only about 7 GW of coal power was put into operation, of which only one unit (0.6 GW) was put into operation by 2020. These difficulties will continue in the future, leading to the danger of continuing to slow progress of coal power projects.”- Extracted from recommendations of the three coalitions of VSEA, NCDs-VN and VRN sent to the Ministry of Industry and Trade on March 2, 2021.

Setback” viewed from the perspective of the Mekong Delta development

Dr. Tran Huu Hiep, advisor of the Partnership Group for Sustainable Energy Transition in the Mekong Delta (SMEP), said that from the perspective of the development of the Mekong Delta, the draft QHD8 currently has many shortcomings, even can be considered as a “setback” compared to the Mekong Delta Master Plan for the period 2021-2030, which was consulted by the Ministry of Planning and Investment from the end of 2020 and even, some points in the QHD8 are even more outdated or contradictory to Decision 120/NQ-CP which was issued 4 years ago.

He took for example Resolution 120/NQ-CP, which asked “to minimize the addition of new coal power plants,” and even proposed “to stop licensing investment in coal power plants in the Mekong Delta” and ” focus on promoting development potential of renewable energy,” QHD8 is going to slow down or in the opposite direction. Specifically, while the Mekong Delta Development Plan proposed in the period 2021-2030 with only developing 3,600MW coal power plants, QHD8 has “added” more than 5,000MW of coal power plants by proposing to build 3 new factories: Song Hau 2 (2,000 MW), Long Phu 2, and Long Phu 3 (3,000MW). Meanwhile, for renewable energy, the Mekong Delta Development Plan up to 2030 proposes to develop 9,400 MW, QHD8 is only slightly proposed at 6,700 MW.

QHD8 is conflicting with the integrated planning of the Mekong Delta and Resolution 120 / NQ-CP on sustainable development of the Mekong Delta while adding coal-fired power to the planning after 2030 in the high scenario,” said Dr. Tran Huu Hiep, an advisor of the Mekong Delta Sustainable Energy Transition Partnership Group.

Why do we turn to another direction, why are we creating new factories and not continuing to promote the potential of renewable energy in this region, which is considered to have good results, with great potential?” – Mr. Hiep questioned at a forum to contribute ideas to QHD8 organized by VSEA on 4/3/2021. He also said that from the 10-year implementation of the Long Phu 1 project (Soc Trang), the development of coal power plants is not easy and poses many environmental problems and raw materials import. Meanwhile, in the region, there are many renewable energy projects such as wind power, solar power, biomass power… are being surveyed. Therefore, he said that, if the current draft QHD8 is approved, it will most likely become a “bottleneck” for the development of the Mekong Delta.

Need a new mindset

The Ministry of Industry and Trade often explains that Vietnam still needs to develop coal power plants because this is a highly stable energy source, helping to ensure energy security in the context that hydropower in Vietnam is difficult to develop while wind and solar energy have many potentials but their capacity is not stable, if it is strongly developed, the cost for transmission and storage of electricity is very high … According to Dr. Ngo Duc Lam, facing this energy problem and avoiding new coal power plants, the Ministry of Industry and Trade needs to have more researches on the use of LNG liquefied gas because this is a highly stable energy source that can replace coal power plant without causing pollution. This is also a new direction that many countries in the world and some countries in the region are stepping up.

According to a report submitted to the Ministry of Industry and Trade in March 2021 on the development of wind power in Vietnam, Vietnam Electricity (EVN) said that it may have to cut the wind and solar power capacity in Vietnam many times in 2021 due to excess power and high reductions in the rainy season and the end of 2021. This reduction could reach 350-400 million kWh per month in the period October-December 2021 because this is the time of the main flood season in the Central and South crops and also the time when many new wind energy projects are completed.

Using LNG is much better than using coal. It has no pollution like coal, no slag, no dust, high efficiency, easy transportation. China, Malaysia, and Indonesia have already done so,” he said, saying that the QHD8 drafting committee needs to update on this development trend, not continue to admit that it is too expensive to do.

The updating of information on the world situation of the last Master Map 8 in my opinion is not complete. TSD8 brought to LNG but the explanation was not satisfactory. There has not been a thorough investigation, so they still have the same opinion, meaning that LNG is very expensive, very complicated,” he said, saying that it is no coincidence that many countries are rushing to make LNG, so Vietnam needs to conduct surveys to see how the world is doing, avoiding the situation just in general without specific proof of calculation. Because LNG liquefied gas will be used in many civil and transportation sectors, he also suggested that, in order to achieve good economic efficiency, the electricity industry should discuss with relevant industries on the use and import of this material.

According to statistics, since the Conference of the Parties on Climate Change (COP 21), the world demand for liquefied gas (LNG) has increased significantly, reaching an average rate of 6.3%/year, LNG capacity in the world, increasing from 340 million tons/year (2017) to expected to reach 453 million tons/year by 2022. Qatar, Australia, the USA, Malaysia, and Russia are the leading LNG exporters in the world. In the world’s major LNG importing countries such as Japan, South Korea, and China, LNG is mainly used in electricity generation and trade.

Mr. Lam also raised the issue of energy export. From the fact that Vietnam has started to have excess energy, especially with great potential for solar and wind power, he thinks that QHD8 should start discussing the issue of energy export but cannot be left blank at present.

Until now, Vietnam has always lacked energy, so when it comes to future [planning], it is often about how to import energy. In my opinion, we must now discuss how to export energy. It is time for Vietnam to have excess energy, to discuss the matter of proposing now, then 10 years from now to be able to export,” Mr. Lam said. He added in the short term, Vietnam could study wind and solar energy export to other countries in the region that need to import electricity such as Thailand and Myanmar. (Translated)


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