In the wake of the Paris agreement, Vietnam has announced a review of all it's new coal plants in the planning pipeline and under construction. Vietnam is currently the third largest builder of coal plants in the world.
In a statement (vn) released on 19th January, Vietnam Prime Minister Nguyen Tan Dung stated the government’s intention to “review development plans of all new coal plants and halt any new coal power development”.
In addition, the Premier stated that Vietnam needs to “responsibly implement all international commitments in cutting down greenhouse gas emissions; and to accelerate investment in renewable energy.” an implied reference to the Paris Agreement from the UN Climate Change Conference in December 2015.
Under the Power Development Plan VII 44 gigawatts of new coal power generation was planned (the equivalent of 70 large coal plants) on top of 17 gigawatts presently under construction. At least some of the planned and in-construction coal projects will be converted to gas but some are also likely to go ahead.
Measures will also be taken to create better investment conditions for wind and solar, under the Prime Minister's announcement.
Early indications of this change came from Pham Van Tan, deputy head of the Meteorology, Hydrology and Climate Change Department and deputy head of the Vietnamese delegation of the COP21. In an interview with Viet Nam News reporter Nguyen Hang, about the historic Paris Agreement he gave some clue to Vietnam's sustainable direction. He said that there were development opportunities with acting on climate change in replacing old manufacturing technologies with advanced manufacturing technologies and moving towards a low-carbon economy, and a chance to improve health and build resilience to natural disasters. But there would also be substantial challenges especially around financing the transition.
Pham Van Tan specified three areas where Vietnam would concentrate on cutting greenhouse gas emissions: energy, agriculture and waste. In particular, he used the example of the electricity sector: "The electricity industry has to cut down their usage of coal to generate electricity. They should replace coal with other fuel categories having low-carbon emissions. Reducing the usage of coal brings two benefits. First, it will save coal when our national coal reserves are declining. Second, when an enterprise uses clean fuel with low-carbon emissions, it is easy to lure investments from both the domestic and international community."
Vietnam, in it's Intended Nationally Determined Contribution (INDC) (PDF) submitted to the UNFCCC, committed to reducing emissions by 8 per cent by 2030, and conditionally with international support, increasing this to as much as 25 per cent cut in emissions.
A possible scenario shows that 40 percent of the Mekong Delta’s land will flood if sea levels rise by 1m, and about 2 million ha of farming land will be deemed unusable if salinity encroaches another 100m. By some reports, over 70 percent of Mekong Delta firms already hit by climate change.
NGO Activists endorse reduction in coal and more sustainable development
Activists were quick to endorse the change in moving Vietnam to a more sustainable development path, and a path that will limit health pollution impacts.
A Press release dated 22 January by GreenID, a Hanoi-based non-profit group promoting sustainable energy in Vietnam, first alerted me to this bold news.
"We welcome the Primer Minister’s commitment to move the country away from coal. However we understand that the revised Power Development Planning VII, due to be released in the coming days, will still have a significant percentage of new coal plants,” said Ms. Nguy Thi Khanh, Executive Director of GreenID, a Hanoi-based NGO working to promote sustainable energy in Vietnam in a media statement.
"If the Prime Minister is serious about moving away from coal, we hope that the government will comprehensively reassess all proposed coal plants and put in place policies to rapidly accelerate the development of renewable energy and energy efficiency. In addition, all existing and new coal plants should be fitted with pollution controls and higher efficiency standards in line with international best practice,” said Ms Khanh.
Currently, the electricity production is still dominated by hydropower with a share of 41% in electricity generation, followed by natural gas with 31% and coal with 26%.
Greenpeace also commented with Arif Fiyanto, Greenpeace Southeast Asia Coal Campaigner, saying:
"This huge win follows tireless work from environmental advocates highlighting the health and environmental impacts of the country’s coal expansion plans. This is one of the biggest victories for environmental and climate advocates in Vietnam, and a crucial step for Southeast Asia where development plans have tended to rely heavily on coal,” said Arif. “Vietnam’s decision is the Paris Agreement in action, and with a clear steer towards renewable energy it sets the benchmark for countries across the region to follow.”
Vietnam had one of the largest programs for coal-fired power station development in Southeast Asia. It now seems like this may be drastically scaled back under the new review announced by the Prime Minister.
"Vietnam is playing its part in kicking our global addiction to coal. With Indian coal imports falling and China implementing a three-year ban on new coal mines, there is a definite sense that change is in the air in Asia,” said Arif. "Driven by concerns from people more aware than ever of the health and environmental impacts of fossil fuels, we are on the cusp of an energy revolution. But it needs to move faster and policy announcement such as this are just the first step."
Greenpeace Southeast Asia last year worked with environmental groups, such as the Vietnam Sustainable Energy Alliance (VSEA), and researchers from Harvard University, to highlight the health impacts of the planned coal expansion. The groundbreaking study used modelling to show how existing coal plants in Vietnam cause an estimated 4,300 premature deaths every year, which would have risen to 25,000 premature deaths per year if the coal expansion plans were approved.
Financial analyst Tim Buckley commented, "It is encouraging to see the Vietnamese government’s intention to transition its electricity markets consistent with the strategies currently being implemented by China and India. Energy security is one of the most pressing needs of any country and adding wind, solar and energy efficiency builds domestic energy security,”
Tim Buckley is Director of Energy Finance Studies, Australasia, at the Institute for Energy Economics and Financial Analysis.
“The structural decline of the seaborne thermal coal market is increasingly evident from the trends in China and India. The indication that one of the leading coal developers in Southeast Asia is going to retreat from new coal plants further signals the terminal decline of the global coal industry,” Mr. Buckley concluded.
Now what would be the implications for this reduced market for Australia's coal producers?
Maybe it is time Federal and state Government's stopped approving new mines and paid more attention to international trends, climate policy and our international treaty commitments on greenhouse gas emissions.
- Ed King, Climate Home, 25 January 2016 - Vietnam to phase out coal, invest in gas and renewables
- Bob Burton, Renew Economy, 27 January 2016 - Vietnam shifts stance on new coal
- Image by Garycycles/flickr - coal stockpiled at a river wharf, Viet Nam, Nghệ An, Hoàng Mai - Creative Commons licensed (CC BY 2.0)