Vietnam urges private sector to play a greater role in national energy development

Resolution 55 emphasizes the fast and sustainable energy development, while encouraging all economic sectors, particularly the private sector, to participate in energy development.

Following are the principal contents of the Resolution.

Souce: Internet

Situation and causes

 Over the past 15 years’ implementing Conclusion 26-KL/TW of October 24th, 2003, of the Political Bureau of the Central Committee of the IXth National Party Congress on the Strategy and planning for development of the Vietnam’s electricity industry and 10 years’ implementing Resolution 18-NQ/TW of October 25th, 2007, of the Political Bureau, the 10th term, on the orientation of the Strategy for the development of Vietnam’s national energy to 2020, with a vision toward 2050, the energy sector in general and the electricity industry in particular have undergone fast and fairly synchronous development, closely following the orientation and attaining many specific objectives already set.

The energy supply, especially electricity supply, has substantially met the socio-economic development requirements with constantly improved quality. The petroleum exploitation and petrochemical refinery industry has developed vigorously; the petroleum output has greatly increased and a number of large-scale oil refineries have been put into operation. Investment has been made in the construction of many high-capacity coal mines; the commercial coal output has increased; hydropower has quickly developed; recently, wind and solar energy have developed at high rates. Investment in the construction of electricity supply infrastructures has seen a vigorous growth, being an important condition to ensure electricity supply security.

National power grids have expanded to almost all areas nationwide, including deep-lying, far-flung, frontier and island regions. Energy consumption has considerably risen, the energy consumption structure has changed towards industrialization. Attention has been always attached to the energy conservation.

The energy industry has been proactively restructured to operate under the market mechanism; large resources have been utilized for development investment with the participation of many economic sectors, of which state enterprises play the key role. The energy industry has developed dynamically, playing a very important part in the socio-economic development as well as defense and security maintenance in many localities and the country.

However, the country’s energy industry remains hamstrung with numerous limitations and weaknesses. The national energy security target is confronted with many challenges; domestic supply sources are not enough to meet requirements, thus prompting greater and greater import of energy; many power projects are delayed; a number of energy security indicators have shown unfavorable signs. The management and exploitation of energy resources still see a number of limitations. The energy exploitation and use efficiency remains low. The energy infrastructures are inadequate and asynchronous. The technological level in some domains of the energy industry is slow to improve, the localization of mechanical commodities and energy projects’ market support for locally manufactured mechanical commodities remain limited. The human resource quality and labor productivity in some domains remain low. The competitive energy market has developed incomprehensively without linkage between sub-sectors and between electricity generation and electricity transmission; the energy price policy remains problematic and not fully conformable to the market mechanism and not definitely separated from the social security policy. A number of energy projects invested by state enterprises still suffer losses; some overseas-invested energy projects face the potential risk of capital loss. Environmental protection requirements in the energy industry have not yet received due attention in some places and at some times, thus sparking social anxiety.

The above-mentioned limitations and weaknesses are attributed to various causes, but mainly the subjective causes. The awareness of and attention to the role, position and importance of the energy industry as well as of the national energy security is not adequate; a number of issues related to energy development are slow to be theoretically and practically reviewed; a number of problems related to the orientations for development of various energy sources and concretization of the socialist-oriented market mechanism in the energy sector are slow to be tackled. Regulations of the energy industry in general and each sub-sector in particular still reveal many limitations and inconsistencies as well as incompatibilities with international law. A number of mechanisms and policies are not yet suitable to the market mechanism, failing to promote the establishment of a competitive energy market. Policies on development investment and energy resource management remain incomplete and asynchronous. Science and technology policies related to the energy industry are slow to be renewed. Some energy strategies and master plans are slow to be adjusted to truly reflect the practical situation and available resources for implementation and are not closely connected with socio-economic development plans of localities and some other industries. The state management apparatus in charge of the energy industry in general and the electricity industry in particular is unstable, the assignment of tasks and coordination among ministries, ministerial-level agencies and localities in some cases are yet to be clearly defined. Research and forecast capabilities remain poor, and the direction and organization of implementation of energy policies and laws are not resolute.

Guiding viewpoints, objectives and vision

Guiding viewpoints

- To firmly ensure the national energy security as the foundation and concurrently as an important prerequisite for socio-economic development. To give priority to the fast and sustainable energy development one step ahead, in association with environment protection, defense and security maintenance, achievement of social progress and justice, which is of especially important significance and the central task throughout the process of national industrialization and modernization.

- To develop the national energy in conformity with the socialist- oriented market economy institutions and international integration trend; to quickly build a synchronous, competitive and transparent energy market, diversifying ownership forms and business modes; to apply market prices to all types of energy. To encourage and create favorable conditions for various economic sectors, especially the private economic sector, to participate in energy development; to resolutely abolish all manifestations of subsidy, monopoly, unfair competition and lack of transparency in the energy industry.

- To develop synchronously and rationally and diversify types of energy; to prioritize the exploitation as well as thorough and efficient use of different sources of renewable energy, new energy and clean energy; to rationally exploit and use various domestic fossil energies, attaching importance to the national energy stability and regulation objectives and reserve requirements; to prioritize the development of gas-generated electricity, formulating a roadmap to rationally reduce the proportion of coal-generated electricity; to proactively import fuels from overseas for power plants. To optimally distribute the national energy system based on the comparative advantages of each region and locality.

- To attach importance to the research and application of achievements of the fourth industrial revolution in all energy sub-sectors; to step up the digital conversion in the energy industry; to incrementally master modern technologies, proceeding to manufacture most of energy equipment at home.

- The thrifty, efficient and environment-friendly use of energy is to be considered an important national policy and a responsibility of the entire society. To enhance energy audit; to formulate synchronous mechanisms and policies, strict and feasible measures to encourage investment and use of energy-efficient and environment-friendly technologies and equipment, contributing to increasing labor productivity and renewing the growth model.


General objectives

To firmly ensure the national energy security; to stably supply sufficient high-quality energy at reasonable prices for fast and sustainable socio-economic development, defense and security maintenance and improvement of people’s life, contributing to the environmental protection. The energy industry will be developed harmoniously in all sub-sectors with synchronous and smart infrastructure reaching the advanced level of the ASEAN region. To build a competitive, transparent and efficient energy market suitable to the socialist-oriented market economy institutions. To efficiently tap and use the domestic energy resources in combination with rational energy export and import; to thoroughly practice thrift and efficient use of energy. To proactively manufacture a number of principal equipment in energy sub-sectors; to upgrade and build advanced and modern electricity distribution and transmission grids.

Specific targets

- To adequately supply energy to satisfy the domestic demand, achieving the targets of the ten-year (2021-2030) socio-economic development strategy, in which the primary energy will approximate 175-195 million tons of oil equivalent (TOE) by 2030, and 320-350 million TOE by 2045; the total electricity capacity of all electricity sources will reach about 125-130 GW by 2030 and the electricity output will approximate 550-600 billion KWh.

- The ratio of renewable energies in the total primary energy supply will reach about 15-20 percent by 2030 and 25-30 percent by 2045.

- The total final energy consumption will reach 105-115 million TOE by 2030 and 160-190 million TOE by 2045. The primary energy intensity will reach 420-489 kgOE/1,000 USD GDP by 2030 and 375-410 kgOE/1,000 USD GDP by 2045.

- To build systems of smart and efficient electricity grids, capable of regional connection; to ensure secure electricity supply, meeting N-1 criteria for important load zones and N-2 for especially important load zones. By 2030, the electricity supply reliability will rank among the top four ASEAN countries and the electricity access index will be among the top three ASEAN countries.

- The oil refineries will satisfy at least 70 percent of the domestic demand; to ensure the strategic petroleum reserve of at least 90 days of net imports. To be fully capable of importing about 8 billion m3 of liquefied natural gas (LNG) in 2030 and about 15 billion m3 in 2045.

- The ratio of energy efficiency on total final energy consumption compared to the business-as-usual scenario will reach some 7 percent by 2030 and about 14 percent by 2045.

- To reduce glasshouse gas emissions from energy activities compared to the business-as-usual scenario by 15 percent by 2030, then 20 percent by 2045.
Vision towards 2045:

To firmly ensure the national energy security; to synchronously form the elements of a competitive and transparent energy market in conformity with the socialist-oriented market economy institutions; to sustainably develop energy sub-sectors, efficiently using resources, protecting the environment and adapting to climate change; to develop a system of synchronous and modern energy infrastructures with greater regional and international connectivity; the human resource quality, the scientific-technological level and the energy industry governance capability  will reach the advanced level of a number of modern industrialized countries.

Major tasks and solutions

To develop the primary energy supply sources towards higher self-reliance and diversification and assured efficiency, reliability and sustainability.

- For petroleum: To step up search and exploration activities with a view to increasing the petroleum deposits and exploitation output in potential, deep-water and offshore areas in association with the defense of national sovereignty on the sea; to raise the recovery rate and promote the utmost exploitation at small wells and of marginal deposits. To review and formulate strategies for proactive and efficient cooperation in petroleum search, exploration and exploitation overseas. To develop the gas industry; to prioritize investment in technical infrastructures to serve LNG import and consumption. To continue attracting investment in petro-chemical refinery towards deep processing and raising the quality of petroleum products, proactively meeting to the utmost the domestic demand and proceeding to export. For rock petroleum and gas hydrates, to take the initiative in conducting more intensive geological research and evaluation and apply scientific-technical advances for expanding the scope of exploration; to early make an overall assessment and speed up the trial exploitation when conditions permit.

- For coal: To formulate a new strategy on development of the coal industry in association with the efficient investment overseas and long-term coal import. To keep a proper coal reserve, meeting the requirements of production activities, especially electricity generation. To expand search and exploration activities and raise the quality of assessment of deposit grades and resources. To step up the domestic coal mining on the principle of ensuring safety, efficiency and resource saving; to expeditiously study technologies so as to be able to tap the Red River coal basin; to raise the coefficient of clean coal recovery in pit mining. To speed up the construction of large coal ports, storehouses and entrepots; to promote the mechanization and modernization of coal screening, sorting and mining equipment. To review and evaluate the demand for, formulate plans and optimize solutions to ensuring the stable coal supply for electricity generation suitable to the market mechanism.

- For renewable energy: To formulate breakthrough mechanisms and policies to encourage and promote the vigorous development of renewable energy sources for maximum replacement of fossil energy sources. To prioritize the use of wind and solar energy for electricity generation; to encourage the investment in the construction of power plants using urban garbage, biomass and solid waste in couple with environmental protection and circular economic development. To form and develop a number of renewable energy centers in regions and localities with favorable conditions. To early study and make an overall assessment of the potentials and formulate orientations for development of geothermal, ocean wave, tide and current energies; to begin some application models and conduct trial exploitation for efficiency evaluation. To conduct technological research, formulate a number of schemes on pilot production and encourage the use of hydrogen energy in conformity with the global trend.

- For other types of energy sources: To promptly grasp relevant information for research and development of other types of energy sources in conformity with the conditions of scientific-technical advances, human resources, financial capability and other necessary factors.

To quickly and sustainably develop the electricity industry, meeting the requirements of national industrialization and modernization.

- To formulate and implement a strategy for development of Vietnam’s electricity industry in the new period. To quickly and sustainably develop electricity-generating sources with a rational structure and distribution, ensuring the safety, reliability and stability toward diversification, attaching importance to raising the capacity coefficient and having a rational capacity reserve; to meet the eco-environment protection requirements.

- For hydropower electricity: To mobilize to the utmost the existing hydropower sources. To selectively develop and add a number of small and medium hydropower plants and pumped-storage hydroelectricity. To adopt a strategy for cooperation in hydropower development in association with the long-term electricity import from overseas.

- For wind- and solar-power electricity: To prioritize the development suitable to the system safety-ensuring capability at reasonable electricity prices. To encourage the development of rooftop and water surface solar power. To formulate supporting policies and breakthrough mechanisms for the development of wind power offshore in association with the implementation of Vietnam’s sea strategy.

- For thermal power: To encourage thermal power projects from fuel supply, storage to plant construction, based on electricity price bidding. To develop gas-fired thermos power along the line of prioritizing the use of domestic gas sources. To attach importance to the fast development of LNG-fired thermal power, making gas-fired electricity an important power supply source supporting the system regulation.

To rationally develop coal-fired thermal power toward prioritizing the large-capacity and high-efficiency generating units using advanced and modern technologies such as ultra-supercritical or higher technology; to fully observe the law on eco-environment safety in conformity with international standards. To make an overall review and work out a plan for early technological upgrading of the existing coal-fired power plants in order to meet the requirements of environmental protection; to resolutely shut down power plants which fail to upgrade their technologies as required.

For biomass, garbage and solid waste-fired power: To maximize the exploitation of biomass-generated electricity; to intensify the development of electric sources from municipal garbage, solid waste and biomass.

- To invest in the modernization of the power industry from generation, transmission to distribution, meeting the development requirements of the electricity market, being capable of absorbing large renewable energy sources, heightening the capability to ensure the power grid network security and power service quality. To actively implement electricity demand management and load regulation programs; to manage more strictly the electricity consumption intensity; to minimize the loss of electricity; to improve mechanisms and policies to encourage and promote the storage of electricity. To modernize the electricity-regulating system, step by step applying automatic and smart technical supervision technologies; to study the application of super-high voltage transmission and one-way transmission in the power industry.

- To study and improve the special financial and capital-raising mechanisms for investment in the electricity industry development. To scrutinize and adjust regulations on control and coordination of the electricity market. To work out mechanisms permitting the development of on-the-spot self-sufficiency power plants in industrial parks and clusters, export processing zones, ect.

- To speed up the launch of a competitive electricity market, the mechanism for electricity trade contracts between generators and consumers, the appropriate mechanism for energy supply price bidding or auction, especially in renewable energy or new energy investment projects; to transparentize electricity trading prices. To work out a mechanism to encourage the attraction of non-state capital for investment in the construction of the national electricity transmission system. To operate the national electricity transmission system independently under the State’s control.

To restructure the energy-consuming industries and sectors in couple with the application of policies on the thrifty and efficient use of clean energy.

- To restructure the energy-consuming industries, especially the foreign investment sector, in order to minimize the energy intensity. To apply policies to encourage the development of industries consuming less energy and with high socio-economic efficiency.- To scrutinize and flexibly adjust the distribution of energy-consuming sources toward scattering them and restricting the excessive concentration in a number of localities, in close combination with re-distribution of industrial and urban development spaces nationwide, in each region and each locality.

- To review and finalize the 2020-2030 national program on energy conservation. To apply compulsory standards associated with penalties for energy conservation to energy-intensive sectors, industries and products. To adopt policies to encourage households to use clean, renewable energy, particularly in industrial manufacturing and transport; to boost the development of electric vehicles in line with the common global trend.

To sustainably develop energy infrastructures connected with the region; to increase the internal strength of manufacturing industry and services serving the energy industry

- To adopt the policy prioritizing investment in the sustainable development of energy infrastructures; to attach importance to the construction of energy export and import infrastructures connected with the region. To draw up a list of energy infrastructures for common use and develop a common-use mechanism suitable to the market mechanism. To abolish all monopolies and irrational barriers to the use of physical foundations and infrastructure services in the energy sector; to adopt mechanisms and policies on investment in the construction of electricity transmission systems separated from the state monopoly over electricity transmission. To effect maximum socialization in the investment, exploitation and use of the energy sector’s physical foundations and services, including the national electricity transmission system, on the basis of defense and security assurance.

- To accelerate the digital conversion in the energy industry; to formulate and implement a national program on development of smart energy infrastructures; to improve mechanisms, build databases and conduct national energy inventories to ensure effective management and administration of the energy industry.

- To formulate mechanisms and policies to encourage and support the development of manufacturing industry and services serving the energy industry in the direction of promoting the internal strength and aiming at export; to prioritize the development of industries manufacturing electric and petroleum machinery and equipment, and petroleum services. To improve the legal framework, encouraging and launching the application of the model of energy service companies. To expeditiously formulate and enforce mechanisms and policies to encourage higher localization rates in the energy industry, properly satisfying the requirements and specific targets on localization rates for power plants in particular and energy projects in general. To improve the policy on the State’s placement of production orders to encourage domestic businesses to execute hi-tech, complicated works and projects in the energy industry, which meet the international quality standards.

To restructure, renew, and raise the operational efficiency of, state enterprises in the energy industry; to encourage the private economic sector to participate in the socialization of energy development.

- To comprehensively restructure state enterprises in the energy industry along the line of concentrating on core and advantaged businesses; separating the business function from the state management function; applying advanced administration models and practices, raising their international credit rankings, ensuring publicity and transparency in their operation; to attach importance to raising the efficiency of national energy infrastructure exploitation and use. To revise regulations on resource and asset valuation in conformity with international practices and reality; to deal with and restructure inefficient projects and state enterprises operating at a loss in the energy industry. To research and experimentally apply the mechanism on definite-term sale or long-term lease of power plants, fuel storages, oil refineries, ect., owned by state enterprises.- To review, add or adjust special mechanisms and policies applicable to a number of important energy projects, especially investment projects on urgent electricity sources; to supply adequate capital for state-run energy enterprises to achieve the strategic objectives and tasks linked with defense and security assurance.

- To create a favorable and transparent environment; to publicize investment plans and lists of investment projects, remove all barriers in order to attract and encourage private investors to develop energy projects at home and abroad, attaching importance to electricity generation projects and electricity retail and wholesale activities under the market mechanism. To further encourage and attract large, quality and efficient foreign investment in the energy industry. To speed up the equitization of state enterprises in the power industry; to build open investment mechanisms and reform the administrative procedures in order to ensure the progress of electricity works.

To renew mechanisms and policies developing the synchronous, connected, modern and efficient energy market in line with the socialist orientation.

- To develop a synchronous energy market connected between electricity, coal, petroleum and renewable energy sub-sectors and with regional and world markets. To abolish all barriers in order to ensure market-driven transparent energy prices; to stop electricity price cross-subsidization among different groups of customers, different regions and areas. The State will reasonably regulate prices through market instruments (taxes, charges, funds, ect.) and appropriate social security policies. To improve mechanisms, policies and market instruments so as to promote energy conservation.

- To review, adjust and complete policies on land, ground clearance, water surface use, fighting speculation, self-seeking and group interests in the energy sector. To renew financial policies toward encouraging and vigorously attracting non-state investment capital sources; to encourage energy investment projects in the form of public-private partnership (PPP). To apply flexible and effective credit policies, creating favorable conditions for energy enterprises to access capital sources, especially enterprises with green energy projects. To improve tax policies toward encouraging the production and use of clean, renewal energy. To build legal foundations for the formation and efficient operation of funds for sustainable energy development, promoting the energy conservation in the direction of socialization, financial independence, non-overlapping with state budget revenue and spending tasks, restricting the increase of operation, production and business expenses for enterprises and production and business establishments. To improve the mechanism and implement the policy on renewal energy ratio criteria in the investment structure and energy supply.

- To revise specialized laws on petroleum, electricity, energy conservation and other laws related to the energy industry, which serve as the basis for more effective implementation of the market mechanism. To study and legislate the electricity price administration and a number of incentives for encouraged investment projects in the energy sector. To improve the legal framework for electricity control and regulation. To study, formulate and promulgate a law on renewal energy.

- To heighten the quality of elaboration of energy development strategies and master plans, especially in the electricity sub-sector, ensuring the stability, synchrony and flexibility, connection with socio-economic development strategies and plans of localities and other related sectors. To review, adjust and early promulgate master plans related to energy development under the Planning Law.

To develop sciences and technologies and train high-quality human resources for the energy industry.

- To formulate mechanisms for alignment between scientific-technological research and development and innovation forces and enterprises as well as training institutions in the energy sector through scientific and technological programs; to incorporate research and development activities into energy development strategies, master plans and plans. To create a mechanism encouraging energy enterprises to intensify investment in research and development; to set up innovation centers in the energy sector. To continue implementing the key national target scientific and technological program on energy research, application and development of energy technology in the 2021-2030 period, focusing on the research and manufacture of energy equipment and the application of types of new energy, renewal energy and smart energy, ensuring energy conservation.

- To scrutinize, modify and add national standards and regulations in the energy sector in conformity with international regulations and standards, taking into account national standards and regulations related to the recycling and use of wastes from the energy production process. To step by step apply measures to encourage and enforce the renewal of technology and equipment in the energy industry as well as energy-intensive sectors and industries.

- To formulate a general policy on human resource development and training programs for key stages of the energy industry. To increase the training of technical workers and operational employees to meet the domestic employment demands and for export. To efficiently employ human resources already trained in nuclear energy in along with providing advanced training for them.

To step up international cooperation; to actively and proactively establish strategic partners in order to materialize the target of long-term energy import and energy investment overseas.

- To implement the flexible, efficient, equal and mutual-benefit energy diplomacy policy. To further expand and deepen energy cooperation with strategic partners and important partners. To enhance international relations in all energy sub-sectors and fields in line with the integration trend, making full use of opportunities from trade agreements as well as favorable political and diplomatic relations for energy development.

- To expeditiously formulate a long-term energy import strategy in couple with the encouragement of investment in and exploitation of energy resources overseas so as to contribute to assuring the national energy security; to apply mechanisms to support Vietnamese enterprises with energy investment projects overseas, primarily electricity source projects in some neighboring countries so as to initiatively import electricity into Vietnam. To expand the partnership relations with energy investment corporations to develop advanced energy technologies.

- To actively participate in energy cooperation in the expanded Mekong sub-region (GMS) and Southeast Asian region (ASEAN); to connect electricity grids and improve the electricity trading mechanisms with China, Laos and Cambodia. To further study the connection of the gas systems in the region and deploy it when conditions permit.

To implement the policy of protecting the energy industry environment in association with the targets of reducing glasshouse gas emissions and promoting the circular economy and sustainable development.

- To study and formulate a proper carbon tax policy applicable to the use of fossil fuels. To adopt mechanisms and policies on recovery and use of CO2 gas. To assess the efficiency of the use and recycling of generated ashes and slag on the basis of balancing the demand and consumption as building materials, particularly in the southern region.

- To improve the policy framework, establish and supplement the systems of national standards and regulations on gas emissions and wastes in the energy industry toward approaching the standards of developed countries. To supplement regulations on screening investment projects based on environmental risks.  To formulate financial regulations on the environment, ensuring the full accounting of social and environmental costs into investment and product costs. To intensify the prevention and control of potential environmental polluters; to severely handle violations of environmental safety laws.

- To formulate and implement a scheme on integrating the circular economy model into the strategy on development of energy enterprises. To develop systems of management and treatment of wastes in energy production with advanced technologies, suitable to the country’s conditions; to ensure energy enterprises’ capability of self-treatment of waste sources. To adopt mechanisms and policies to encourage the development of the environmental industry associated with the energy sector.

- To scrutinize, adjust and supplement the contents related to the energy industry in the national strategy on climate change, the national strategy on green growth, the strategy on national sustainable development, the sea strategy and other relevant strategies.

To enhance the Party leadership; to heighten the effectiveness and efficiency of the state management; to promote the mastery of the people and the role of the Vietnam Fatherland Front, socio-political organizations in the energy industry development.

- To heighten the awareness of all Party committees and the entire political system as well as people of the role, position and importance of the energy industry. The Party Committees and administrations from the central to local levels must regard the national energy development as an important and constant task that needs serious leadership, direction and organization of performance. To formulate mechanisms and legal frameworks to ensure the observance of the national energy development planning. To severely handle delayed investment projects affecting the national energy security.

- To review and improve the state management model in the energy sector. To clearly define responsibilities, powers and mechanism of coordination between the central government and localities and among state management agencies in energy development.

- To bring into play the people’s mastery; to broaden the participation of Vietnam Fatherland Front, socio-political organizations, socio-professional organizations and stakeholders in the process of formulating, and supervising the implementation of, national energy development strategies, master plans and policies./.


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