Vietnam aims to become a low-carbon economy. However, the country is a fast-growing economy with significant growth in energy demand and double-digit growth rates for electricity consumption.
In 2013, Vietnam and Denmark therefore entered into a long-term cooperation to strengthen Vietnam’s energy transition. The Danish Energy Agency cooperates with the Ministry of Industry and Trade (MOIT) in Vietnam through the joint Danish-Vietnamese Energy Partnership Programme. Based on the results achieved during previous programmes (2013-2020), the following focus areas were identified for continued cooperation under the Danish-Vietnamese Energy Partnership Programme III (2020-2025):
- Long-term energy planning
- Integrating renewable energy in the energy system
- Energy efficiency in the industrial sector
- Offshore wind power development
Through these four components, Denmark assists the implementation of Vietnam’s efffforts to become a low-carbon economy. As the first component, Denmark has helped develop capacity in the field of energy sector planning, using Danish tools, models and approaches to develop long-term energy scenarios showing effective integration of large amounts of renewable energy from a least-cost perspective.
In 2017, the Vietnamese Ministry of Industry and Trade and the Danish Energy Agency jointly published the first Vietnamese energy outlook in 2017 and a second energy outlook in 2019 based on a range of energy scenarios. A new energy outlook is expected to be published in the fourth quarter of 2021.
The energy outlooks indicate that it is possible to operate the Vietnamese energy system with very high levels of renewable energy without incurring curtailment of renewable energy generation from wind and solar. Moreover, the energy efficiency options and the fuel substitution opportunities in the demand sectors can offer enormous economic gains while reducing greenhouse gas emissions and improving national energy security.
The second component of the Danish-Vietnamese programme focuses on supporting the Vietnamese electricity regulatory authorities in implementing the 2013 Prime Ministerial decision on a power market reform, ensuring an efficient and well-regulated power system.
The objective is further to support Vietnamese authorities in preparation of a new grid operation paradigm that efficiently integrates a larger share of variable renewable energy into the electricity grid.
The focus of the third programme component is to strengthen compliance of the policy on energy efficiency in the industrial sector in order to exploit the vast potential for improving energy efficiency. The emphasis is on making necessary adjustments of the legal basis and the implementation of the Law on Energy Efficiency and Conservation.
The fourth and last component is the improvement of regulatory conditions for offshore wind. With a coastline of 3,260 km and strong wind resources, Vietnam holds great potential for offshore wind. A cooperation between The Danish Energy Agency and The World Bank has illustrated how Vietnam, with the right regulatory framework, can achieve 10 gigawatt of offshore wind already by 2030. For comparison, Denmark currently has a little more than 2 gigawattoffshore wind in operation.
The Danish Energy Partnership Programme III (2020-2025) is funded through the Danish Climate Envelope. To strengthen bilateral cooperation further, a Danish long-term energy advisor is posted at the Ministry of Industry and Trade in Hanoi, Vietnam.