Vietnam has for the first time ever imported coal for power generation.
The import of 9,575 tons, which has arrived at a Ho Chi Minh City port, by a country which used to be rich in coal, came after years of discussion, theVietnam News Agencyreported.
Imports, along with the government’s plan to build 90 coal-fired plants in the next 15 years, will help ease the constant power shortage dogging the country and threatening its economic development.
Vietnam has recently been suffering from power shortages that have been exacerbated by a drought that reduced hydroelectric power which makes up around 40 percent of annual supply.
China last month hiked the price of electricity it supplies the state-run monopoly Electricity of Vietnam Group by 13 to 5.8 cents per kWh with retrospective effect from January 1.
This year Vietnam will buy around 4.6 billion kWh, or 4 percent of its total need, from China. It started to buy from its northern neighbor in 2005.
To become independent in terms of power supply, the Vietnamese government has stated it will invest $83 billion in the new coal plants that will double capacity by 2020 to more than 100,000 megawatts (MW).
The National Coal and Mineral Industries Group (Vinacomin), which has imported the first consignment, said it would import 10 million tons of coal, mostly low-energy bituminous coal, annually by 2012.
The figure is estimated to reach 100 million tons by 2020 to meet the need for the power as well as other industries like steel and cement.
Vinacomin said high-energy anthracite coal, which is abundant in the northern Quang Ninh Province, would be exported at much higher prices to take advantage of the strong world demand.
The country has exported 6.64 million tons in the first five months this year.
ButNguoi Lao Dongnewspaper quoted an analyst as saying that importing coal in huge volumes would not be easy since most countries had begun to conserve their resources carefully and limit exports.
Countries like China, Japan, and India had even started to buy coal mines in the Asia-Pacific long ago in preparation for that.
Coal is the among the world's most carbon-intensive energy sources, US newswireMongabaysaid.
Naturemagazine said in 2009 that if the world wanted to stay within “safe levels” of climate change -- i.e. average temperature not rising 2 degrees Celsius above pre-industrial levels -- coal must be abandoned altogether unless carbon capture and storage proved effective.
In March 2010 the World Bank, Denmark, France, and Japan pledged $790 million to Vietnam for climate change mitigation.
Good for now, but future?
Hanoi-based PetroVietnam Technical Services Corp, a subsidiary of PetroVietnam, last month awarded a contract to global engineering firm Black & Veatch to design and manage a 1,200 MW coal-fired facility in Soc Trang Province. It is one of the 90 new coal plants planned to be built.
Meanwhile, there is an international movement to replace fossil fuels-based power with renewable energy, Singapore newswireEco-Businesssaid.
In recent months both the Paris-based International Energy Agency and the non-profit WWF have released reports assuring the feasibility of a global switch to renewable energy.
Recent findings by the IEA show that greenhouse gas emissions from burning fossil fuels have reached record levels.
Climate change experts point out that the fossil fuel power plants currently in planning and under construction will continue to add to those levels for the life span of the lock those countries into an extended reliance on fossil fuels.
But without thermal energy from coal, Vietnam will not have sufficient energy resources to continue its economic growth,Eco-Businessquoted Sanjeev Gupta, oil and gas expert at Ernst & Young, as saying.
“Vietnam’s thermal energy plans need to be considered from short-to-medium term and long-term perspectives,” he said.
“In the short term, there is an immediate need as Vietnam’s energy demand far exceeds its supply capabilities. Fortunately, it benefits from a readily available natural resource domestically, which reduces import costs, and the ramp up period is comparatively shorter than for alternative energy sources.”
Vietnam has considerable access to solar and wind sources, and energy from these sources would be viable in the medium term, he said.
But, even with more developed economies, renewable energy sources only make up a small part of overall energy supply, he added.
To firmly establish renewable energy, Vietnam needs continuing education and demonstrations of economic feasibility.
“The combination of the lack of governmental sponsorship due to poor appreciation of renewable energy options, high capital requirements, and the resulting high selling price to the end-users has inhibited its growth.”
In the absence of sufficient renewable energy infrastructure, Vietnam relies on awareness of energy efficiency and technologies to limit its polluting emissions.
Earlier this year the Ministry of Industry and Trade set a power saving target of 8-10 percent over five years by raising public awareness and encouraging companies to upgrade technologies.
“At this stage of its development, the country requires a lot of reliable, proven energy that is cost effective. Plans to increase the energy capacity through coal-fired power plants will provide an important long-term source of power for Vietnam’s 87 million people,” Gary Morrow, director of power generation services at Black & Veatch, toldEco-Business.