Vietnam’s renewable energy strategy

Vietnam went to COP21 last year with CO2 emission reduction targets of “8% in 2030 by using its national resources, and 25% if receiving more international support.”  In support of this target, a Renewable Energy Development Strategy was published in November 2015.  This strategy sets out renewable energy targets and associated green house gas emission reduction targets up to 2030, and gives an indication of the intended outlook to 2050.

The targets include the reduction of greenhouse gas emissions in various energy activities as compared with business as usual scenario by approx. 5% in 2020; approx. 25% in 2030 and around 45% in 2050.  This is clearly their aspirational target, requiring external funding assistance.

After meeting with people in Vietnam, I have been told that this Strategy was published a) in Vietnamese only (the copy that I have is an unofficial translation), and b) without any consultation with those working in the sector.  This indicates that it is a document prepared in a bit of a hurry to have something to take with them to COP21.  The lack of stakeholder engagement also leads to questions about the suitability of the targets, and whether they are realistic or if there will be real political support in driving the sector forward.

What I have also been told is that external funding agencies, such as the World Bank, have tried their hand at influencing the Vietnamese government towards clean energy.  Loans for other projects (such as coal infrastructure) have been issued with conditions attached (this is not unusual; South Africa’s access to World Bank finance for their two new coal facilities, Medupi and Kusile, had renewable energy conditions).  What does seem to have happened is that these agencies have made the conditions in Vietnam pretty loose and toothless.

I have heard criticism that funding conditions have called for documentation like this strategy to be developed by the government, but that the requirements are not particularly onerous.  So, for instance, if one condition were for the development of a renewable energy strategy, there may be nothing requiring that it be a particularly good strategy.  By developing and issuing a strategy document, they would be fulfilling the letter of the law, if not its intention.

It’s good to have targets written down and for government to have commitments in place, but it’s vitally important that these targets are realistic.  One of the major successes of South Africa’s Integrated Resource Plan (IRP) development process was the extensive stakeholder engagement that took place.  Members from various sectors, industries and agencies were able to submit comment, or present their case in a series of calls for comment and government organised workshops.  Through this consultation process the solar PV industry was able to lobby for the inclusion of PV contributing nearly half of the total renewable energy capacity by 2030.  There was no PV included beforehand.  This engagement has also led the Department of Energy to include models which totally exclude nuclear (in response to concerns about the cost assumptions) and the learning curves and associated pricing assumptions of various renewables technologies were challenged.

Releasing a strategy without consultation, just before going to be heard at an international climate change conference indicates that the document was rushed, and was perhaps developed in order to tick a box.  Rather than being a well thought out and realistic indication of the challenges and opportunities present in the local renewable energy sector.

Energy planning and the decisions that result have implications that echo for decades.  Targets require considered thought to how they will be financed, who needs to be involved in realising the targets (industry bodies/investors/research institutes), how they need to be involved, what policies and incentive mechanisms need to be developed in parallel, what kind of procurement and contracting strategies will be appropriate and who will develop and implement these (who has this mandate?).  Strong planning, with solid buy in by those who will be responsible for the achievement of the dream, needs to happen.  Good, resilient infrastructure is not something that happens by accident.

What happens by accident is that governments keep building coal power stations, chewing up natural resources, and indebting themselves to foreign investors with weak sustainability targets.  It is my hope that this Strategy is now used as a starting point, and that government uses it as a basis for engaging with industry, utilities, civil societies and others around its suitability.

You can read a bit about what the Strategy’s targets are here.