In Vietnam, Challenging the Dominance of Dams and Fossil Fuels

Zachary Hurwitz

Like many other developing countries, Vietnam’s energy matrix has been powered by hydropower dams and fossil fuels, while other energy options have gone underdeveloped. The government has taken to saying that if it doesn’t build dams, the only other feasible options are coal and natural gas.

Indeed, In 2013, the government decided that 338 remaining hydropower sites are not environmentally nor economically feasible, at least for now. Instead, it's decided to increase by a factor of 17 the amount of electricity produced by coal-fired power plants in the energy matrix, in effect eschewing the idea of a low-carbon economy. In response, Vietnamese civil society is challenging the dominance of both dams and fossil fuels by advocating to the government that there are better, less-destructive energy options available, and they’re doing it with technically-sound arguments.

I was in Hanoi last week facilitating a training on power planning for our partner organization Green Innovation and Development Centre (GreenID). GreenID is leading Vietnamese civil society efforts to advocate for sustainable energy development in Vietnam.

The training built the capacity of GreenID to use Integrated Resource Planning, or IRP, in their efforts regarding energy advocacy. IRP is a powerful tool that is used to create a more equitable and dynamic mix of energy options. It promotes strong gains in energy efficiency by considering demand-side management measures as equal to new generation options such as building a new dam or coal-fired power plant.

IRP also questions the assumptions that power planners make. Because of political pressure, or simply poor technical capacity, planners tend to forecast that energy demand will always rise in parallel to rising GDP.

An Unfeasible Forecast

In its 7th Power Development Plan, the Government of Vietnam forecasted a growth in generating capacity from the current level of about 25,000 MW to 75,000 MW by the year 2020. By 2030, the figure jumps again to a massive 146,800 MW. But is a 200% increase in power generation every ten years accurate, or even feasible? Energy experts working in the country aren’t so sure. 

For one thing, while industry and the residential sector continue to provide brisk economic activity and demand for power in Vietnam, growth won’t realistically continue at the same rate each year. Even if it did, the government’s forecasted demand would require an estimated $10 billion investment per year, which is not likely to easily materialize.

Indeed, a representative of the country’s energy research arm, the Institute of Energy, admitted to us in Hanoi that Vietnam’s electricity goals may be revised down by as much as 24,000 MW in the 8th Power Plan. 

Energy in Numbers

Renewable energy increases in Vietnam, but at the cost of an increase in coal, in the 7th Power Development Plan.
Renewable energy will grow in Vietnam, but at the cost of an increase in coal.
Graph by International Rivers

Still, Vietnam will need to meet its growing power demand. How can the country do so while breaking its habit of relying on dams and fossil fuels? The government’s 7th Power Plan is not all that promising. Let’s take a look at some numbers.

Around the year 2000, both hydropower and natural gas dominated Vietnam’s power sector at about 40% each, while coal-fired plants represented about 18%. Other energy options – wind, solar, biomass, energy efficiency – didn’t even figure into the picture.

By the year 2030, Vietnam’s 7th Power Plan foresees renewable technologies having made inroads at about 6% of the matrix, and energy efficiency having reached levels up to 8-10%. However, coal is forecast to jump to a staggering 56.4% of the energy matrix, while natural gas drops to 14% and hydro to 9%. Indeed, the government plans to expand coal-fired power plant capacity to 36,000 MW by 2020 and 75,000 MW by 2030, three times as much total electricity as the country currently consumes. The play for coal is so high that the 7th Plan even calls for importing coal for the first time in 2015.

Coal on the Rise

The chimney of Line 1 of the Phả Lại Power Station looms in the background. Line 1 doesn't have flue-gas desulfurization installed to capture sulfur emissions, causing major health issues for workers.
The chimney of Line 1 of the Phả Lại Power Station looms in the background. Line 1 doesn't have flue-gas desulfurization installed to capture sulfur emissions, causing major health issues for workers.
Photo by International Rivers

Currently, Vietnam has more than ten coal-fired power plants. Some of the largest include the Phả Lại Power Station (1040 MW), and two coming online soon: the Duyên Hải Power Station (4400 MW) and the Mông Dương power project 1 (1000 MW).  I visited the Phả Lại Power Station on a hot and dusty Wednesday. Line 1 of Phả Lại was built by the USSR in 1986, while Line 2 of the plant was built by Mitsubishi with Japanese investment in 2001. I must admit, as I ran my hand over the coal dust-covered stairwell rails of Line 1, I shuddered when I considered that so many of the world’s power grids are still fueled by dirty coal. There are so many plants that could be cleaned up or simply taken down. 

What's more, I found that there is often an intimate relationship between coal and dams. The head engineer at Phả Lại described how residue from the incineration process was turned into concrete that was used to build the 2,400 MW Sơn La Dam, the largest in Vietnam. Sơn La’s reservoir and impact area displaced 91,000 ethnic minority people, initiating the largest and most costly resettlement plan in the country’s history. 

An Integrated Resource Planning approach would argue for equally considering all of the costs to society of each energy type in order to settle on the "least cost" option. For example, the large resettlement of the people displaced by the Sơn La Dam – and the continued sulfur pollution at Line 1 of Phả Lại, which has caused cancers and respiratory disease each year for workers – consitute environmental and social costs as well as economic and legal costs which harm both people and the value of the investments in the long run. It turns out that investing in energy efficiency first, before embarking on high cost greenfield energy projects, can provide a win-win for the investor and the community.

Hydropower on the Wane …Sort Of

Though the government decided to leave 338 sites undammed, hydropower won’t disappear from the country’s power plans. On the contrary, the government wants to increase hydropower potential in all regions of the country from an estimated 9,200 MW to 17,400 MW by 2020, including building the Hoi Xuan Dam, the Dak Pla Dam, and dams on the Ya Soup River, among others. 

Vietnam already has over 260 dams fragmenting its rivers. Similar to the Sơn La Dam mentioned above, the country’s second largest dam, the giant 1,900 MW Hòa Bình Dam on the Sông Đà River (Black River), has caused large environmental and social impacts – it is often referred to as the “Aswan Dam of Southeast Asia," in reference to the destructive dam in Egypt. Built with Soviet support but only completed in 1994, Sơn La Dam's large storage reservoir flooded 13,000 hectares, forcing 89,720 people to be relocated. 168 people died during construction of the huge dam.

In addition to traditional hydropower, the government is also planning to build pumped storage hydropower plants for the first time, with an eye towards increasing the construction of multipurpose hydropower as well. The 7th Plan calls for an increase in the capacity of pumped storage from 1800 MW in 2020 to 5,700 MW by 2030.

The continued hydropower investment will necessarily clash head on with trans-boundary river management issues, as hydropower dams continue to be built on rivers in China, Laos, Thailand, and CambodiaVietnam’s neighbors in the Mekong basin. Conflicting interests both upstream and downstream in the watershed will most likely decrease the reliability of hydropower storage sites in Vietnam, while climate change, too, will leave Vietnam’s hydropower capacity less reliable, as rainfall becomes more erratic. 

Better Energy Options Available

Members of GreenID undergo a training in Integrated Resources Planning.
Members of GreenID undergo a training in Integrated Resources Planning.
Photo by International Rivers

So, how can the government break its dependence on fossil fuels and hydropower? With the right investments in renewable energy and energy efficiency, the government could achieve a low-carbon energy matrix while avoiding new coal and hydropower plants.

According to the 7th Power Plan, potential wind power sits at 6,200 MW, compared with an installed capacity of a mere 52 MW as of 2011. Solar has a potential of 2,500 MW, compared with a piddly 2 MW installed today. Biomass has a capacity of 2,000 MW and only 88.5 MW installed today. In addition, Vietnam will also soon embark on nuclear energy, adding thousands of megawatts to the mix.

Yet, studies from the Asian Development Bank show numbers that dwarf the renewable energy estimates of the 7th Power Plan. According to a strategic environmental assessment of the power sector in the Greater Mekong Subregion that the ADB published in 2013, Vietnam has a potential of at least 39,789 MW in renewable energy, including 20,500 MW in solar alone, 10,000 MW in wind, and 472 MW in geothermal, an energy type which has yet to be introduced in the country.

Meanwhile, demand-side energy efficiency measures could meet a significantly large amount of estimated demand. Through a World Bank project, Vietnam already increased its market for compact fluorescent lamps to 10 million by 2007, while Vietnam Electricity (EVN) has reported savings of up to 91 MW in peak demand. Yet, other measures, such as retrofitting existing hydropower dams, improving the efficiency rating of transmission lines, phasing in cogeneration, promoting energy efficient appliances, and installing smart meters in every city building, could provide even more electricity than the government may be willing to admit. 

The 7th Power Plan foresees a limited scaling up of wind, solar, biomass, and energy efficiency, among other options. But while the Vietnamese energy picture is set to become more diverse, it is to do so only on the coattails of the dirtiest options.

This is why the energy advocacy of civil society groups like GreenID is so important. Integrated Resource Planning  could help set the country on a truly low-carbon path, away from the fossil fuels and hydropower that have dominated the country for decades. If the government listens, it might find that civil society participation in energy planning, and a greater attention to the full costs and benefits of all energy options, could provide a win-win for Vietnamese society as a whole.

Monday, August 4, 2014