Transitioning the energy sector to achieve the 2030 Agenda for Sustainable Development and the objectives of the Paris Agreement presents a complex and difficult task for policymakers. It needs to ensure sustained economic growth as well as respond to increasing energy demand, reduce emissions and consider and capitalize on the interlinkages between Sustainable Development Goal 7 (SDG 7) and other SDGs. To address this challenge, ESCAP has developed the National Expert SDG Tool for Energy Planning (NEXSTEP).This tool enables policymakers to make informed policy decisions to support the achievement of the SDG 7 targets as well as emission reduction targets (NDCs). The initiative has been undertaken in response to the Ministerial Declaration of the Second Asian and Pacific Energy Forum (April 2018, Bangkok) and Commission Resolution 74/9, which endorsed its outcome. NEXSTEP also garnered the support of the Committee on Energy in its Second Session, with recommendations to expand the number of countries being supported by this tool.
The key objective of this SDG 7 roadmap is to assist the Government of Viet Nam to develop enabling policy measures to achieve the SDG 7 targets. This roadmap contains a matrix of technological options and enabling policy measures for the Government to consider. It presents three key scenarios, current policy, sustainable development goal and coal phase out scenarios, that have been developed using national data, and which consider existing energy policies and strategies, and reflect on other development plans. These scenarios are expected to enable the Government to make an informed decision to develop and implement a set of policies to achieve SDG 7 by 2030, together with the NDC.
The key objective of this SDG 7 roadmap is to assist the Government of Viet Nam to develop enabling policy measures to achieve the SDG 7 targets. This roadmap contains a matrix of technological options and enabling policy measures for the Government to consider. It presents three key scenarios, current policy, sustainable development goal and coal phase out scenarios, that have been developed using national data, and which consider existing energy policies and strategies, and reflect on other development plans. These scenarios are expected to enable the Government to make an informed decision to develop and implement a set of policies to achieve SDG 7 by 2030, together with the NDC.
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Section 1
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A. Highlight of the Road Map
Content
Viet Nam’s access to electricity was 99.0 per cent in 2019 and it is assumed that the universal access has already been achieved by 2021. Universal access to clean cooking technology and fuel, however, has been and remains a challenge as more than a quarter of the population is still relying on polluting cooking fuels and technology. Well-planned and concerted efforts will need to be made to achieve universal access to clean cooking by 2030. Energy efficiency improvement needs to be boosted across different sectors in order to achieve a 2.1 per cent annual improvement, reducing energy intensity to 3.73 megajoules per US$ by 2030.
Viet Nam has abundant energy resources, both fossil fuel and renewables, however, it relies on substantial amount of petroleum products to meet the national demand, particularly in the transport sector. The country’s power sector is heavily reliant on fossil fuel and the consumption of fossil fuel is expected to grow substantially in the future. The NEXSTEP analysis has examined the potential for reduction in fossil fuel use in the country by diversifying its energy sources, such as by increasing renewable energy technologies both in the demand and supply sides.
Viet Nam has abundant energy resources, both fossil fuel and renewables, however, it relies on substantial amount of petroleum products to meet the national demand, particularly in the transport sector. The country’s power sector is heavily reliant on fossil fuel and the consumption of fossil fuel is expected to grow substantially in the future. The NEXSTEP analysis has examined the potential for reduction in fossil fuel use in the country by diversifying its energy sources, such as by increasing renewable energy technologies both in the demand and supply sides.
Section 2
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B. Achieving Viet Nam’s SDG 7 and NDC targets by 2030
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Universal access to electricity
In the absence of more recent information, based on the 2019 rate of 99.0 per cent the roadmap assumes that the access to electricity has already been achieved by now.
Universal access to clean cooking
More than a quarter of the population in Viet Nam still relied on polluting cooking fuel and technology in 2019, exposing themselves to negative health impacts. In the absence of any policy measure, it is expected that the clean cooking access will increase from the current 73.1 per cent to 93 per cent in 2030 through the current policy settings, based on the linear forecast using access rates from International Energy Agency (IEA) and the Asia Pacific Energy Portal (APEP). This will result in about 2 million households (or 7.2 million people) still relying on unclean cooking fuels and technologies, primarily by the traditional use of biomass. NEXSTEP analysis suggests that a combination of electric cooking stoves (mostly for urban areas) and LPG cookstoves (for rural remote areas) may be the most suitable long-term solutions for closing the remaining gap.
In the absence of more recent information, based on the 2019 rate of 99.0 per cent the roadmap assumes that the access to electricity has already been achieved by now.
Universal access to clean cooking
More than a quarter of the population in Viet Nam still relied on polluting cooking fuel and technology in 2019, exposing themselves to negative health impacts. In the absence of any policy measure, it is expected that the clean cooking access will increase from the current 73.1 per cent to 93 per cent in 2030 through the current policy settings, based on the linear forecast using access rates from International Energy Agency (IEA) and the Asia Pacific Energy Portal (APEP). This will result in about 2 million households (or 7.2 million people) still relying on unclean cooking fuels and technologies, primarily by the traditional use of biomass. NEXSTEP analysis suggests that a combination of electric cooking stoves (mostly for urban areas) and LPG cookstoves (for rural remote areas) may be the most suitable long-term solutions for closing the remaining gap.
Renewable Energy
The share of renewable energy in the total final energy consumption (TFEC) was 16.7 per cent in 2019. Based on current policies, the share of renewable energy is projected to increase to 18.8 per cent by 2030. The increase is due to the projected increase in both renewable electricity and other renewable energy (excluding traditional use of biomass) consumption, while TFEC increases at a slower rate. In the SDG scenario, the share of renewable energy is further improved to 21.9 percent of TFEC in 2030. This improvement is principally due to the increased renewable energy mix in power generation along with adoption of electric cookstoves and phasing out of traditional biomass usage.
Energy Efficiency
Viet Nam’s energy intensity in 2018 is estimated at 4.8 MJ/USD2011. Energy intensity in Viet Nam has declined with an average annual rate of 0.9 per cent between 1990 and 2010. A doubling of the 1990-2010 improvement rate is required to achieve the SDG 7.3 target, corresponding to an average annual energy intensity decline of 1.8 per cent between 2018 and 2030. Correspondingly, to achieve the SDG 7 target the energy intensity in 2030 should be 3.73 MJ/USD2011SDG 7.
Under the current policy settings, the energy intensity is projected to drop to 4.4 MJ//USD2011 by 2030. The energy efficiency target is exceeded in the SDG scenario with an energy intensity of 3.51 MJ//USD2011, compared with the target of 3.73 MJ//USD2011. This is achieved through improving energy efficiency across all sectors e.g. through minimum energy efficiency standards (MEPS) for household appliances, increased electrification of the transport sector and mandating 20 per cent energy efficiency improvement in the industry sector. Adoption of clean cooking technologies and phasing out inefficient biomass-based cooking technologies will also further increase energy efficiency in the residential sector. There are ample energy savings opportunities for Viet Nam, as explored in the SDG scenario. These opportunities are discussed in later sections.
Nationally Determined Contribution (NDC)
Viet Nam’s NDC was updated in 2020 and it commits to reduce GHG emission for the entire economy by 9 per cent by 2030 compared to the business-as-usual (BAU) scenario using domestic resources (unconditional target). Under this target, emissions are expected to be reduced by 83.9 MtCO2-e by 2030. Of this, the reduction from the energy sector would be 51.5 MtCO2-e, equivalent to a 5.5 per cent reduction compared to the BAU scenario. With international support, Viet Nam aims to achieve a 27 per cent reduction, compared to the BAU scenario (conditional target). The contribution of the energy sector in this target would be 16.7 per cent or 155.8 MtCO2-e.
Nationally Determined Contribution (NDC)
Viet Nam’s NDC was updated in 2020 and it commits to reduce GHG emission for the entire economy by 9 per cent by 2030 compared to the business-as-usual (BAU) scenario using domestic resources (unconditional target). Under this target, emissions are expected to be reduced by 83.9 MtCO2-e by 2030. Of this, the reduction from the energy sector would be 51.5 MtCO2-e, equivalent to a 5.5 per cent reduction compared to the BAU scenario. With international support, Viet Nam aims to achieve a 27 per cent reduction, compared to the BAU scenario (conditional target). The contribution of the energy sector in this target would be 16.7 per cent or 155.8 MtCO2-e.
Scenario analysis of NDC targets suggests that in the current policy scenario Viet Nam will not be able to achieve the NDC unconditional target. In the SDG scenario, this target would be comfortably achieved, additionally will offer the Viet Nam Government to enhance its NDC unconditional target for the energy sector to 25 per cent. Furthermore, if the coal phase out scenario described in this report were implemented, Viet Nam would be able to increase its NDC conditional target to 40 per cent.
Section 3
Title
C. Important policy directions
Content
The Roadmap sets out five key policy recommendations to help Viet Nam achieve the SDG 7 and NDC targets, as well as reduce reliance on imported energy sources:
- A combination of electric cooking stoves and LPG cooking stoves should be deployed to achieve the universal access to clean cooking fuels and technologies. Further efforts are required through government policies to close the clean cooking gap. NEXSTEP analysis suggests that induction type electric cooking stoves should be the primary focus while LPG cooking stoves can provide access for households located in rural remote areas. The choice of these technologies has been based on health benefits as well as cost effectiveness, as suggested by the annualized cost of technologies.
- Transport electrification strategies should be pursued to provide multi-fold benefits. Increasing the share of electric vehicles reduces the demand for oil products, hence reducing Viet Nam’s reliance on imported petroleum fuels. At the same time, it can enhance energy efficiency and increase the contribution of renewable energy to the transport sector, contributing to climate mitigation and helping to achieve NDC target.
- Energy efficiency measures should be encouraged with a whole-of-economy approach. Substantial energy savings can be achieved through sustainable heating technologies in the residential and commercial sectors, while utilisation of efficient household appliances reduces electricity demand. Significant energy reduction can be achieved through industry sector best practices.
- Viet Nam needs to reduce the expansion of coal-fired power generation to leverage multiple socio-economic and environmental benefits. With the decreased costs of renewable energy technologies, electricity generation from coal-based power plants is already more expensive than that of renewables, and this gap is likely to widen in the next decade. Continued expansion of the coal-fired generation sector will lock in emissions over the long term. The impact of coal burning on public health is severe – widely known to cause various diseases, including premature deaths.
- Viet Nam should focus on phasing out coal from the power sector by 2040. On the basis of economic, environmental and social benefits and the country’s vast, relatively untapped renewable energy resources, phasing out coal would be a key element choice of Viet Nam’s energy transition. While there are challenges, experiences and lessons learned from other countries suggest that an early start in planning, detailed consultations with stakeholders and developing a well-thought long-term ‘just’ transition plan will minimize socio-economic risks.