Challenges include affordable energy, the need for additional transmission capacity, fuel import dependence, overreliance on fuel imports, higher import costs and air pollution. ‘air. The report contains eight findings and recommendations for the country to reach net zero by 2050.
First, it is possible to achieve a net-zero energy system in 2050 at only 10% more cost than the reference scenario. Early action is needed to reach peak emissions no later than 2035 to avoid paying excessive costs, the report says.
Vietnam’s future energy demand is expected to increase, which will require rapid development of the energy system and pose new challenges, which are covered by the themes of the Vietnam Energy Outlook 2021 (EOR21) report released by the Danish Energy Agency. energy, electricity and renewable energies in Vietnam. Energy Authority and the Danish Embassy in Vietnam recently.
Second, to achieve net zero emissions by 2050 at the lowest cost, renewable electricity (RE) should be the main substitute for fossil fuels, either directly or indirectly through the production of electrofuels. The electricity system should satisfy 70% of the total energy demand in 2050. The main sources of energy production based on renewable energies are solar energy (75%) and wind energy (21%).
Third, the green transition of the power system will be capital intensive and could require annual investments of up to $167 billion in 2050 in the net zero scenario, which corresponds to about 11% of projected national gross domestic product in 2050.
Electric system costs will shift to less fuel costs and much more capital investment costs. Capital investment costs will represent about half of total power system costs in 2030 in all scenarios, while towards net zero in 2050 they will increase to 90% of total power system costs. Therefore, access to cheap financing options is crucial, the report suggests.
Fourth, Vietnam should stop planning new coal-fired power plants and renovate existing ones to become more flexible to better integrate renewable energy. It is also recommended to limit the expansion of gas and LNG power plants, as the current planned capacity of 25 GW is more than enough to achieve net zero emissions in 2050, Vietnamese media report.
Fifth, storage systems should play a central role, but batteries will only be needed after 2030. Batteries are expensive today and useless in the short term because balancing can be provided by existing hydroelectric and thermal power plants.
In the next 10 years, the reinforcement of transmission capacities is urgent, in particular to connect the best renewable resource of the South to the demand of the North.
Sixth, nuclear energy is only profitable if the implementation of renewable energies, especially solar energy, is severely limited.
The analysis shows that current nuclear technologies are not cost competitive with the combination of solar, wind, storage and transmission. Only when these technologies cannot be fully utilized can nuclear power be competitive towards net zero in 2050.
Seventh, rapid action is needed to decarbonize the transport sector. The added benefits are much less air pollution and less reliance on imported fuel.
Direct electrification is essential: about 80% and 50% respectively of passenger and freight demand are expected to be electrified by 2050. Vietnam is expected to start phasing out fossil fuel vehicles from 2025, switch to public transport and moving freight transport to the railway. from 2030 and electrify all ground transportation, the report recommends.
Eighth, reaching net zero will make the country independent of fuel imports. Vietnam’s dependence on imports is expected to increase significantly over the next decade and by 2050 the share of imported fuels could reach 70% in the baseline scenario, with imported fuel costs amounting to $53 billion. Lower fuel imports will reduce the risks associated with fuel price fluctuations.
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