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Energy and environment

Vietnam has a large reserve of fossil energy resources (coal, oil, natural gas) and high potential for renewable energy resources (biomass, wind, hydropower, etc.). The high economic growth, especially in manufacturing has led to high demand for energy and rapid growth of waste of all types.

Market size

Demand for electricity is expected to continue to grow by an average of 11% during 2016 – 2020. In 2014, industrial and residential accounted for 54 % and 36 % of power consumption by all sectors respectively. Vietnam is expected to be a net exporter of energy (coal, oil and gas, etc.) with the annual average growth at 9%.

Vietnam has made remarkable effort in expanding access to electricity. The number of households without electricity fell from 50% in 1995  to only 2% in 2014. In Vietnam, 500kVn transmission grid is the main high-voltage transmission of the national power system. According to the national master plan for power development in the 2011-2020 period, with considerations to 2030, the volume of transmission grid of 500 kV station during 2016 – 2020 will be 26 750 MVA, increasing from 17 100 MVA during 2011 – 2015.

Opportunities

In 2030, wind power is expected to contribute 6,200 MW of power, while biomass is expected to generate 2,000 MW annually. According to the development plan of biofuels from 2015 with vision for 2025, Vietnam aims to produce 1.8 million tons of biodiesel and vegetable oil annually to meet 5% of domestic gasoline and oil demand by 2025.

Waste to energy/fuel is an emerging concept in Vietnam. Both foreign and domestic companies are allowed to conduct waste to fuel/energy in Vietnam without any restriction on foreign ownership. The fuel that is produced from waste may be sold through regular distribution channels or alternatively the power may be sold to the national grid. In practice, the government has identified waste to energy/fuel as a key area with attractive incentives regarding investment, taxes and power purchase. However, a concrete framework to promote the sector is still absent.

Key players

The energy and environment sector is very regulated and dominated by state owned players. In the energy sector, Vietnam Electricity (EVN) and its subsidiaries generate 67% of Vietnam’s electricity including all transmission lines, all electricity operation systems, electricity distribution and electricity retail. It is followed by Vietnam Oil and Gas Group (PetroVietnam) with 12% and the Vietnam National Coal and Mineral Industries Group (Vinacomin) with 5%.

In the waste management sector, URENCO and CITENCO are the state-owned enterprises dominating the market, particularly the waste collection process. There are some local private companies involved in the collection and management of certain waste, however, these companies are usually small and unorganized.