Increasing energy imports: Vietnam's growing dependence on other economies

Deputy Head of the Central Economic Commission, Nguyen Duc Hien, made these remarks at the seminar

At the seminar on technology trends and solutions for the development of Vietnam's energy industry in the industrialization and modernization strategy until 2030, vision to 2045, Hien stated that Resolution 29-NQ/TW dated November 17, 2022, by the Central Committee of the 13th tenure on "Continuing to promote industrialization and modernization of the country until 2030, vision to 2045" has identified the energy industry as one of the fundamental sectors. In which, the renewable energy industry and new energy industry were given priority for development.

Additionally, the Power Development Master Plan VIII has set the goal of supplying sufficient electricity for domestic demand and meeting the socio-economic development targets with an average GDP growth rate of about 7% per year in the period of 2021-2030, around 6.5 - 7.5% per year in the period of 2031-2050.

Simultaneously, renewable energy sources for power generation will be strongly developed, aiming to achieve a ratio of about 30.9 - 39.2% by 2030, and a target of 47% renewable energy with conditions that the commitments according to the Joint Energy Transition Partnership (JETP) with Vietnam by international partners are fully implemented in substance. The orientation by 2050 is to reach a ratio of renewable energy of 67.5 - 71.5%.

However, according to Hien, the related tasks and solutions set out in the Power Development Master Plan VIII are facing numerous challenges. The energy demand is growing rapidly, while Vietnam's energy industry is struggling due to insufficient domestic supply, with many power projects being behind schedule. The reserves and production of coal, crude oil, and gas are declining annually, leading to increasing reliance on energy imports and reducing energy self-sufficiency, thereby increasing dependence on other economies.

According to Hien, the recent development of the global energy industry indicates a structural shift in the energy sector with changes in policies, structures, and technologies. This shift involves a transition from the production and consumption of traditional fossil fuels (natural coal, oil, and gas) to sustainable renewable energy sources (wind, solar, and biomass).

The Power Development Plan VIII has set the requirement for Vietnam to establish renewable energy industrial centers and create a complete ecosystem for renewable energy, integrating production, manufacturing, and supporting services within concentrated industrial zones. Given this context, to achieve the objectives of the energy sector by 2030 and the vision for 2045, and to meet the needs of economic and social development, Hien believed that it is necessary to promptly establish mechanisms, prioritize policies, and make breakthroughs to promote the development of Vietnam's energy industry in the new context.

It is crucial to enhance the capacity of energy industry enterprises across all sectors of the economy, thereby creating energy self-reliance for Vietnam to meet the requirements of industrialization and modernization of the country.

Moreover, Vietnam should focus on developing the renewable energy equipment manufacturing industry, energy storage, carbon capture, absorption, storage, and utilization technologies within the country to harness its existing potential, enhance independence and reduce the cost of renewable energy production. Furthermore, it is important to encourage domestic enterprises to undertake complex and high-tech power projects, improve design capabilities, procurement, and project management of domestic enterprises capable of acting as general contractors for large-scale power projects.

Vietnam also needs to proactively manage its energy resources to meet the demands of industrialization and modernization, implement more robust measures to reduce greenhouse gas emissions using its own resources, along with the cooperation and support of the international community, both in terms of finance and technology transfer, to achieve "Net Zero" emissions by 2050.

"Particularly, it is essential to enhance the capacity for domestic design and manufacturing of equipment to increase the share of domestic equipment in power generation projects and the electricity grid; improve the capabilities for repair, maintenance, and testing of domestic electrical equipment," said Hien.