ENERGY EFFICIENCY IN INDUSTRY IN VIETNAM

Transcription

1 Expert Group Meeting Using Energy Management Standards to stimulate persistent application of Energy Efficiency in Industry March 2007, UNIDO, Vienna ENERGY EFFICIENCY IN INDUSTRY IN VIETNAM By: Nguyen Manh Hung Deputy general director of Energy&Petro Dept. Ministry of Industry - Vietnam

2 CONTENT Introduction of Vietnam Vietnam s energy: production and consumption Current energy conservation and efficiency use in Vietnam (EE&C) Energy efficiency in industry: barriers and solutions

3 Introduction of Vietnam Main features: Location: on Eastern Sea of the Indochina Peninsula Area: 331,000 km2 Population: 84 million (as of 2006) Capital: Hanoi Climate: tropical country Main religion: Buddhism GDP: 55.5 bill. USD (as of 2006)

4 Vietnam s energy: Production and Consumption (1) - Overview Vietnam is now known as a country of reform and integration with remarkable initial successes in socioeconomic development, Energy demand also grows rapidly to meet the development of the national economy, Total commercial energy exploitation increased from 7,1 MTOE in 1990 to 46,604 MTOE in 2005 (13.5% annual average growth), Final energy consumption increased from 4,21 MTOE in 1990 to 21 MTOE in 2005 (12% annual average growth). Energy intensity (energy consumption per GDP) of Vietnam is ~ 500: 1.5 times as much as of Thailand and twice as much as the average level of the world.

5 Vietnam s energy: Production and Consumption (2) Energy production in 2005: Electricity generation: bil.kwh Oil production: 18.6 mil.tons Gas production: 6,890 mil.cub.m Coal production: 32.4 mil. tons

6 Vietnam s energy: Production and Consumption (3) Energy consumption by sector in 2005: Industry: 8.5 MTOE Transport: 6.5 MTOE Service: 1.76 MTOE Agriculture: 0.54 MTOE Residential use: 3.3 MTOE Industry sector is the largest energy consumer. Industry Transport Service Agriculture Residential use

7 Vietnam s energy: Production and Consumption (4) - Forecast Year 2010: Final commercial energy consumption is forecasted at MTOE (Annual average growth in period of is projected at %). Year 2020: Final commercial energy consumption is forecasted at MTOE (Annual average growth in period of is projected at %). MTOE % 80% Energy consumption forecast until Energy consumption mix by sector Base scenario High scenario Residential use Industry sector will remain the largest energy consumer until % 40% 20% Service Transport Agriculture Industry 0%

8 Vietnam s energy: Production and Consumption (5) Issues to be addressed How to ensure national energy security? Restructuring the energy sector structure and opening up the market for energy Finding investment capital for energy development Energy price control Developing renewable energies Advancing energy science and technology International cooperation on import and export of energy and fuel; Effective and efficient use of energy, esp. in industry sector, is the most sustainable solution for the country s continuing economic growth and the environment protection.

9 Current energy conservation and energy efficiency in Vietnam (1) Setting of legal framework Establishment of EE&C Office EE&C Activities EE&C Projects

10 Current energy conservation and efficiency use in Vietnam (2) Legal framework Law of Electricity enacted in 2005 In September 2003 the Government of Viet Nam (GOV) had issued Decree No. 102/ND-CP on Efficient Utilization of Energy and Energy Conservation. Subsequently in 2004 the Ministry of Industry (MOI) issued a Circular providing guidance for implementing energy conservation in all enterprises. The Decree regulated EE&C in production, building, and equipment, power intensive machines and residential use; addressing various issues such as measures to reduce import tariff on selected EE equipment, to support its implementation. In 2005 MOI prepared a National Targeted Program on Energy Efficiency and Conservation (EEC) for the Period ", approved and enforced on 14 April 2006 by Prime Minister. The National Program calls for a concerted efforts in improving energy efficiency and cutting down energy losses and stronger measures for conservation of energy. These are very important legal basis to implement new EE&C programs and projects in Vietnam.

11 Current energy conservation and efficiency use in Vietnam (3) EE&C Office - In the Decision No. 79/2006/QD-TTG dated April 14, 2006, the Prime Minister entrusted Minister of Industry to establish the Board and the EE & C Office and to be a Chairman of the Board. - Under the MOI s Ministerial Decision No.919/QD-BCN dated April 7, 2006, the EE & C Office under MOI was established.

12 Organization Structure of the EE&C Office (Proposed to exist until 2008) Minister of Industry Minister of Industry General Director of General Director of S&T Department S&T Department Advisors Advisors (2 (2 persons) persons) General Manager General Manager (Deputy General Director of (Deputy General Director of S&T Department) S&T Department) Assistant General Assistant General Manager Manager EE&C Development Group EE&C Development Group (06 persons) (06 persons) EE&C Implementation Group EE&C Implementation Group (5 persons) (5 persons) Standard Standard Labeling & Labeling Alternative Alternative RE & RE Training Training Public Public Relation Relation Policy Policy & Planning Planning Information Information & & Data Management nt International International Cooperation Cooperation EE&C in EE&C in Industry Industry EE&C in EE&C in Building & Residence EE&C in EE&C in Transportatio Transportation n Efficiecy of Efficiecy of Energy Energy Instruments Finance, Accounting Finance, Accounting

13 Current energy conservation and efficiency use in Vietnam (4) Activities Residential EE&C activities: promoting sales of 1 mil. Compact fluorescent lamps (CFLs) to households in the areas of high load Surveys of Energy Consumption in 65 Buildings and Hotels for benchmarking 20 Buildings and Hotels in Ho Chi MinhCity 36 Buildings and Hotels in Hanoi City Energy audit at 2 companies: - Rang Dong (Dawn) Lamp and Thermos Flash Company - Hanoi Industrial Canvas Textile Company Tiềm năng tiết kiệm năng lượng Energy saving potential in Vietnam N ăm Potential for energy conservation in several industrial factories can be as high as 20% of the current consumption level

14 Energy conservation and efficiency use in Vietnam (5) Projects SDC Project on EE & Environment Management in Brick Making Industry (USD 1 mil.) The Netherlands supported project to the Biogas Program for Animal Husbandry Sector in selective provinces in Vietnam ( , USD 2 mil.) The WB/GEF/EVN DSM Phase 2 (USD mil. ) Commercial EE Pilot Program (USD 2-4mil. from GEF + 5mil. from Private Sector) The WB/GEF/MOI: Vietnam System Efficiency Improvement, Equitization and Renewables (SEIER) ( , USD 220 mill. UNDP/GEF/MOST Project on Promoting Energy Conservation in SMEsVIE/01/G41 Aug 2002-March 2005) USD 384,000 UNDP/GEF VIE/00/G43 Energy Efficient Public Lighting March Aug ,900 USD. UNDP/GEF public lighting projects under implementation: 5 mil. USD

15 Energy efficiency in industry: Barriers and Solutions (1) Barriers: High losses and low efficiency due to obsolete technologies and equipment require an initial huge capital amount to replace; Lack of demand side management practices; Unawareness of the public of social benefits of energy conservation; Lack of technical expertise by end-users, manufacturers/suppliers and potential service providers on modern efficient technologies and practices, efficiency potentials, energy audits and inspections, actual performance of EE measures, etc.

16 Energy efficiency in industry: Barriers and Solutions (2) Barriers (cont.): Economic instruments to imporve energy efficiency in industry are still limited and government fuel subsidies encourage industry to use more energy; Policy for promoting energy efficiency and energy conservation is voluntary rather than mandatory; Inadequate information on potential EE improvements, costs and benefits of EE equipment, potential low-cost measures, and new technologies/practices;

17 Energy efficiency in industry: Barriers and Solutions (3) Solutions: Improve the effectiveness of legislative instruments to improve EE. Increase the use of economic instruments to improve EE and remove barriers, for e.g. removing fuel subsidies, tax breaks for investing in EE technologies, providing incentives to decision makers to promote EE&C, etc. Capacity building activities for company leaders to promote energy efficiency, Marketing of EE, conducting research and information disseminating about the benefits of EE implementation to end-users,

18 Energy efficiency in industry: Barriers and Solutions (4) Solutions (cont.): Investment grants to encourage high EE products, Lessons learned from other countries: Canada (Industrial Building Incentive Program, Canadian Industry Program for Energy), China tax breaks offered for the manufacture of energy-efficient products by industrial enterprises, e.g. producing energy-efficient wall materials for buildings; a 50 percent reduction of value-added tax on energy-efficient products sold, Malaysia sales tax exemption on all equipment, Chinese Taipei investment tax credits of 5 percent to 20 percent of the cost of equipment against the industrial firm s income International cooperation: support of the world community for the new EE technologies is crucial for developing countries in generally and Vietnam in particular. We welcome all opportunities to improve EE&C in Vietnam!

19 References information EE&C office under MOI National Targeted Program on Energy Efficiency and Conservation in period Brief of existing EE&C projects and programs in Vietnam

20 Roles of the EE&C Office 1. Propose the Mechanisms, Policies and Measures for promoting EE&C activities to submit Prime Minister for approval and enforcement 2. Set up the short term, medium term and long term EE&C programs to submit Prime Minister for approval and enforcement 3. Work as a Focal Point to organize and develop EE&C Management System from Ministries to the localities levels for effectively implementing EE&C Program at all local levels. 4. Cooperate with other Governmental Organizations to monitor and treat the problems arose during implementing the program. 5. Organize the EE&C Awareness and Propagation Program for the enterprises and community. 6. Establish the energy consumption database for management 7. Cooperate with International Organizations to push up the cooperation in EE&C.

21 National Targeted Program on Energy Efficiency and Conservation in period I. The program s objectives II. In period : Reduction of national energy consumption 3%-5% in comparison with energy demand forecast (BAU cases) In period : Reduction of national energy consumption 5%-8% in comparison with energy demand forecast (BAU cases) The implementation plan 1) Institution establishment on EE&C: Energy Management System from the State Management to the economic-social activities, establishment of 8 EE&C Centers in 3 regions of the country. Enforcement of legal document on EE&C in period , issuance of 10 MEPS for 10 types of equipment, carrying out the EE&C Labeling

22 National Targeted Program on Energy Efficiency and Conservation in period Compulsory Application of Buildings Code for new Buildings from Completion of energy pricing to promote EE&C activities Application of energy management system in 40% of designated enterprises in period and 100% in period ) Introduction of high energy efficiency equipment, replacement of low energy efficiency equipment, reduction of energy intensity 3) Efficient utilization of transportation system to reduce energy consumption, fuel shifting from gasoline to LPG in the cities.

23 National Targeted Program on Energy Efficiency and Conservation in period III. The Projects under EE&C Program The program comprises of 11 projects: 1) The first projec: Completing legal framework on EE&C in all activities. 2) The second project: Propagandizing to raise community s awareness of energy saving and effective use. 3) The third project: Put education of energy saving and effective use into national education system. 4) The fourth project: campaign on establishment of model named Energy saving in each household. 5) The fifth project: developing standards and putting energy-saving label on some targeted products. 6) The sixth project: Providing technical assistant to domestic manufacturers who meet the standards on energy efficiency.

24 National Targeted Program on Energy Efficiency and Conservation in period ) The seventh project: Establishing Energy Management System in enterprises. 8) The eighth project: Assisting manufactories to upgrade, improve and rationalize production line for energy saving and effective utilization. 9) The ninth project: capability building and implementing activities of EE&C activities in designing and managing buildings. 10) The tenth project: Construct Pilot Buildings and put the EE&C activities in Buildings into discipline. 11) The eleventh project: Optimally exploit capacity of means of transportation, minimizing fuel consumption and reducing emission.

25 Brief of existing EE&C projects and programs in Vietnam 1. World Bank/Sida DSM Phase 1 Project ( ) DSM Policy Framework and Pilot DSM Programs (MOI) Draft DSM policy framework, completed DSM pilot programs in design phase Preliminary load research program design, completed Review of load management options, ongoing Introduction to Appliance Labeling and Lighting and Motor Standards (MOSTE) Building Code Development (MOC) enforced in December 2005

26 Brief of existing EE&C projects and programs in Vietnam 2. Utility DSM GFE/WB 2.25 mill USD EVN Phase 2 DSM Program (ongoing) Capacity Building for EVN DSM Cell, It will be upgraded to form the DSM Center under EVN Phase 2 Load Research Program: Design and implementation Implement load management program to reduce EVN peak load over 120 MW by 2006 and reduce GHGs emission by 70,000 tons per year by 2006: o Pilot Load Management Program Development and implementation: TOU program design o Energy audits o Institutional strengthening and technology transfer Design and implement 5 pilot DSM programs are being designed by International

27 Brief of existing EE&C projects and programs in Vietnam 3. The Commercial EE Pilot Program (MOI) GFE/WB 3.25 mill USD Objectives Catalyze commercial EE market Develop a small, sustainable commercial EE service industry and enhance their capability Demonstrate EE project benefits Components Marketing: Promoting the program and energy efficiency retrofit projects to project agents and project proponents Training: Increasing the skills of project agents and financial service providers Sub-grants: Meeting part of feasibility study (investment grade audit) costs and Incentives for investment in energy efficiency retrofit projects

28 Brief of existing EE&C projects and programs in Vietnam 4. EE&C promotion in SMEs of Vietnam conducted by MOST, funded by UNDP/GEF, Vietnamese Government ( ) General objectives Reduction of GHGs of 5 industrial sub-sectors (brick production, paper and pulp, textile and food processing) by implementing EE&C programs Concrete Objectives - Remove the barriers - Improve the institution, policies, technology, information and finance to promote technology and experiences on EE&C

29 4. EE&C promotion in SMEs of Vietnam conducted by MOST, funded by UNDP/GEF, Vietnamese Government The expected results Capacity building for Central to Local Government Organizations in establishment and implementation of policies related to EE&C in SMEs Improve awareness of SMEs by implementation of propaganda program Provide information on EE&C to SMEs 5 years EE&C training programs for SMEs Set up the ESCOs Network to support SMEs on EE&C Facilitate SMEs in loans for EE&C projects from commercial financial sources and funds Implement 10 Pilot projects on technology, financing and multiply to 500 projects in 5 industrial sub sectors. Formulate the EE&C markets (technical supply and services)

30 4. EE&C promotion in SMEs of Vietnam conducted by MOST, funded by UNDP/GEF, Vietnamese Government Reduction of 950,000 tons of GHGs Energy saving of 140,000 TOE Energy cost reduction: 10% to 15% Increase competitiveness of industrial products Environmental pollution reduction in brick and ceramic production; avoidance of factories movement

31 Thank you for attention and look forward to seeing you in Viet Nam the land of hidden charm