HCMC's efforts to turn power potential into reality
15/10/2012
The Ho Chi Minh City People's Committee recently approved the Green Energy Program for the 2011-2015 period, which emphasized the goal of clean power development, with new renewable energies accounting for more than one percent of the whole city's power consumption, equivalent to 48MW. However, to make this a reality will not be easy.
The Ho Chi Minh City People's Committee recently approved the Green Energy Program for the 2011-2015 period, which emphasized the goal of clean power development, with new renewable energies accounting for more than one percent of the whole city's power consumption, equivalent to 48MW. However, to make this a reality will not be easy.
Clean power potential
As one of the country's populous and fast economically developed cities, demand for power in Ho Chi Minh City (HCMC) has surged in recent years. Last year, the city's power consumption reached 16 billion kWh, accounting for 15 percent of the country's total of 100 billion kWh, with commercial power growing at 9 percent per year.
However, HCMC has been blessed with great potential to exploit renewable energy sources such as wind power and solar energy. At the end of April, Intel Vietnam inaugurated a solar power system at its microchip assembly and accreditation plant in Saigon Hi-Tech Park. With 1,092 solar panels installed, the plant will be capable of generating 321,000 kWh of power and reducing 221 tonnes of CO2 emissions annually.
HCMC also has great potential for wind energy. At the end of last year, the Saigon Industry Corporation, the Ho Chi Minh City Power Corporation, the Neptech Co., and the Russia-based YnS-OCBM Co. joined to establish a company specializing in the production of wind power equipment for wind power projects across the country and export. The joint-venture company is piloting production of the first three wind turbines with a total value of US$4.8 million.
In April, the Cong Ly Construction-Trade-Tourism Co. sent a proposal to Ho Chi Minh City People's Committee for the implementation of a 200 MW wind power project with a total investment of VND10.000 billion in the town of Can Thanh. If accepted, it will install 125 wind turbines along Can Thanh's coastline within four years.
Turning potential into reality
HCMC is trying to promote the utilization of renewable energy sources, but the biggest obstacle is the cost of production and price. Investment costs for power from renewable energy are still quite high compared to average costs, while the recovery of capital and profits is not possible within the short term, without even taking into account the country's increasingly competitive power market.
The evidence for this is that only about 3MW of power is produced from renewable sources in the city, including three garbage burning power plants with a total capacity of 2.7 MW. In addition, only 3,400 households in the city have installed solar boilers with alternative output power savings of about 11 million kWh on account of the high price of equipment and installation.
The construction of a stable market for renewable energy products is also important, based on the lessons from the experience of the US-based First Solar Company. It invested in a US$300 million solar panel production plant in March in the Dong Nam Industrial Park in Cu Chi District. However, it has suspended production partly because Chinese-made solar batteries are flooding the market. First Solar Group Vice Director of Production Tymen DeJong said that due to an imbalance in supply and demand for solar equipment in the global market, First Solar's plant in the Dong Nam Industrial Park would suspend production until the market became more lucrative.
HCMC has great potential for renewable energy development and Ho Chi Minh City People's Committee has correctly set a goal for one percent of power to be generated from renewable energy sources during the 2011-2015 period. However, to ensure this becomes a reality requires a more detailed action plan, specific solutions, and substantial incentives for investors.
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