INCOMING THE ADMINISTRATION OF THE REQUIRED STANDARDS PAIRING WITH SANCTION ON EFFICIENT ELECTRICAL USE APPLY TO ENTERPRISES IN INDUSTRY AND REGIONS WITH HIGH POWER CONSUMPTION

On May 15, 2023, the Prime Minister signed Decision No. 500/QD-TTg approving the National Electricity Development Plan for the period of 2021 - 2030, with a vision to 2050 (“Power Plan VIII”). Power Plan VIII sets the goal of firmly ensuring national energy security, meeting the requirements of socio-economic development, successfully implementing a fair energy transition, in line with the trend of green transition, reduce emissions and form an overall energy industry ecosystem based on renewable energy, new energy.

ATA would like to provide updates on key contents in Power Plan VIII as follows:

1. Prioritize the development of renewable energy

Power planning VIII focuses on developing and increasing the proportion of renewable energy (wind power, solar power, hydropower, etc.) in the power source structure. This power source will reach a rate of about 30.9 - 39.2% by 2030, with a vision to 2050, the rate of renewable energy will reach 67.5 - 71.5%.

In addition, according to the plan, coal-fired power plants will not be prioritized for expansion, only continue to implement coal-fired power projects already included in Power Master Plan VII and stop operating plants with a lifespan of over 40 years if fuel conversion is not possible. The raw material source of coal-fired power is oriented to convert to biomass and aminoac. Power planning VIII also sets out the orientation for the development and promulgation of the Law on Renewable Energy, creating a legal corridor for the development of renewable energy in Vietnam.

2. Create a premise to encourage private investment in transmission projects

There is a practice in Vietnam recently that "excess power but still lack of electricity". The main reason is that the transmission network system is not adequate. Therefore, in Power Planning VIII, orientations and solutions are also given to solve and create a legal corridor for transmission projects, specifically:

1. Focus on developing 500 kV and 220 kV transmission grids to ensure the capacity to release the capacity of power plants and improve the reliability of power supply;
2. Orientation to reduce power transmission to long distances, to minimize the construction of new inter-regional transmission lines before 2030;
3. Research and concretize policies on socialization of investment in transmission grid.

3. Diversification of investment capital sources for power projects

One of the development perspectives stated in the Power Plan VIII is to encourage all economic sectors to rapidly develop the electricity industry on the principle of healthy competition and to implement the market mechanism on electricity selling prices. Some of the main solutions mentioned are:

1. Diversifying capital sources, capital mobilization forms, effectively attracting domestic and foreign capital sources into electricity development, ensuring national defense, security and competition in the electricity market. Strengthen calling for and effective use of international support commitments (JETP, AZEC, etc.), green credit sources, climate credit, green bonds, etc.;
2. Diversify investment forms (public, private, public-private partnership, etc.) for power projects. Promote the role of state-owned enterprises, strongly attract domestic and foreign private sectors to participate in electricity development investment. Continue to negotiate, effectively use funding sources, support capital arrangement of international partners in the process of energy transition and towards "zero" net emissions of Vietnam;
3. Implement flexible and effective credit policies, creating favorable conditions for businesses to access capital sources to develop power projects.

4. Strengthening solutions to encourage and compel businesses to use electricity economically and efficiently

Many of the solutions to increase energy efficiency and savings are targeted at businesses such as:

1. Encourage investment in and use of energy-saving technologies and equipment;
2. Strengthening energy audit;
3. Promote the deployment of the model of energy service companies;
4. Apply mandatory standards and regulations together with sanctions on efficient use of electricity to fields and industries with high electricity consumption.