Vietnam - Be realistic about renewable energy

Peter Droege, EuroSolar president and professor of urban sustainability at the University of Liechtenstein, told The Saigon Times Daily about how to develop renewable energy in Vietnam when he was in HCMC last week to speak at the GreenBiz Conference and Exhibition on European Green Business Solutions (GreenBiz 2011). Excerpts:

The Saigon Times Daily: How can the Government and companies of Vietnam invest in renewable energy when they still have limited capital?

- Peter Droege: It’s not true that their capital is limited. I understand that they have a lot of funds spent on conventional projects for coal, natural gas and nuclear energy. So, the question is how they adjust that capital planning for renewable energy projects. There is no economic difference if they spend money on the new conventional or renewable systems. The only difference is the country will benefit from having free natural resources with renewable systems. If they continue to invest in the systems operated by coal and natural gas, they will have to cope with ever-rising energy costs in the future. So, the money is there and the question is what they will spend it on.

Investment in renewable energy is about a saving fact. You have to think of the money you are saving in the future. So, you can capitalize that value saving and use this to fund the renewable energy systems established by companies or government organizations. This has been done everywhere.

But investors argue it is easy and less expensive to build conventional energy plants than renewable energy systems because of abundant supply of technology and equipment? Do you agree with them?

- No, I do not think so. What we need to do here is to establish interest in renewable energy, and this requires a combination of effective regulations as well as viable pricing policies or the feed-in-tariff support for wind power that enables investors to build wind farms. Government agencies can calculate what is going to cost investors when they develop wind farms and help them find good locations, and what is going to take for them to recover the investment costs in six, seven or eight years as normal expectations. When investors have recovered their investment and had profit after a certain time, they and the Government share the profit of wind power projects afterwards.

As I said attractive pricing policies help create corporate interest and attract much investment in renewable sources. We have to be realistic about renewable energy development, and therefore I do not think that the delivery wind power price of 7.8 U.S. cents per kWh (applicable in Vietnam currently) is supportive enough. Government agencies and investors need to sit down together to make calculations for wind power developments in this country and adjust the wind power charge to ensure profitability for the investor. This can be done the same for solar energy and other forms of renewable electricity generation. Of course, it takes time to figure out the right prices for wind and solar power and the investment costs are different depending on what the Government can support.

So, does the success of renewable energy projects depend much on responsibility and profit sharing of the Government and investors?

- This will contribute to development of infrastructure systems that use wind power for electricity generation. You could have said that gas-fueled projects are safe but the problem is that these projects need natural gas that is limited and the wind power projects need wind that is not fossil fuel.

I think that the Government can provide support for solar energy generation at buildings and wind farms in appropriate locations. You should place large solar spheres in the areas where you do not have agricultural production. It’s crazy to cut trees to make room for solar spheres. Wave power and other forms of renewable energy can be developed in Vietnam because the country has a very long beach and there are enormous resources just off the coast. I have no doubt that Vietnam could in 20 or 30 years depend much on renewable energy.

Are you too optimistic about the future of renewable energy in Vietnam, which still relies heavily on conventional power sources and faces electricity shortages?

- Vietnam has better conditions than many other countries in developing renewable energy thanks to much wind exposure, geothermal, biomass and solar energy. This kind of energy is not new in the world. If you study you will find that it is easy and possible, quite normal as it has been generated in 20 or 30 years. So, Vietnam tries to convert those natural resources into energy to meet its needs rather than the needs of donors and lending institutions who provide loans for conventional energy projects. I think it’s not about being green but being intelligent about the future. Fossil and nuclear energy costs more and poses risks for the environment and health of people.

Developing countries in Asia and Africa as well as developed countries worldwide like Japan have a very strong push in solar and wind power generation, particularly after the Fukushima disaster earlier this year. Bhutan is a very small nation but is trying to go that direction. Fundamentally, most countries still think of old developments and dream about yesterday and do not want changes. But I’m optimistic about Vietnam which has young and dynamic generations and the people who are open to the needs of their nations to ensure energy security and diversify energy sources for sustainable development.

Reported by Mong Binh

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