Overview On Energy Consumption In Hochi Minh City-vietnam-2009

OVERVIEW ON ENERGY CONSUMPTION IN HOCHIMINH CITY, VIETNAM Le Huy Ba, Prof., Sci. Dr. Ly Ngoc Minh, M. Eng. Hochiminh City University of Industry, Vietnam Jakarta, Indonesia, 4-5 August, 2009 [email protected], [email protected]

CONTEN

• • • • •

INTRODUCTION OVERVIEW OF VIETNAM ENRGY PRODUCTION AND CONSUMPTIOPN IN VIETNAM ENRGY CONSUMPTION IN HOCHIMINH CITY CONCLUSION

INTRODUCTION In order to save energy and protect the environment for sustainable development we need to know how does the big city consumption the energy? This paper carried out in general glance on the production and consumption of energy in Hochiminh City-biggest city in Vietnam-in the period 2005-2009.

I. Overview of the Vietnam One of the fastest growing GDP growth rates in the world 10%



Vietnam has been enjoying strong growth:

GDP per Capita (USD) GDP growth(%)

1200

8.4%

8.5%

800

7.1%

440

480

881

835

–

Exports growing at 20% yoy.

–

Strong FDI: USD 20.3 bn in 2007 and 57bn during the first 9 months of 2008.

8%

704 534

GDP growth exceeded 8% in 2007. Forecast to slow down to 6% in 2008 due to anti-inflation measures by the government.

8.0%

7.7% 7.3%

–

571 7%

400

6.0%

0

Foreign Direct Investment (FDI) growth accelerating

5%

2002

2003

2004

2005

2006

2007 2008F

Export and import growing at over 20% yoy $60 $50

52.3 Export (US$bn)

Import (US$bn)

36.9

$40

31.1 25.0

$30

20.0

44.5

48.4

40.0

32.2

26.5

$20 $10

70 65 60 55 50 45 40 35 30 25 20 15 10 5 0

53%

50% 40%

65.0 17% 9%

1.7

2003

2004

2005

2006

2007F

17%

30% 20%

11%

4%

2003

$0

60%

10%

20.3 4.0

5.8

10.2

2004

2005

2006

FDI (US$ bn)

0%

2007F

FDI (%of GDP)

2008F

1. Rapid growth has naturally resulted in some growing pains Inflation    

35%

CPI up 12.6% for 2007 and 27.9% for September yoy.

30%

Mostly due to rising food and gasoline prices, which is an international problem.

20%

Monthly CPI





25.2%

10%

But inflation is slowing in second half of 2008.

0%

26.9% 27.0%

21.4% 19.4%

15%

Cost of construction materials and labor have also risen.

12.6% 8.8% 9.3%

5%

10

Mostly due to high import requirements for raw materials, machinery and equipment for exports and manufacturing sector.

4

14.1%

15.7%

10.0%

0.9% 0.7% 1.2%

2.9% 2.4% 3.6% 3.0% 2.2% 3.9% 2.1% 1.1% 1.6% 0.2%

Sep07

Dec07

Oct07

US$bn

Trade deficit rising to USD 15 bn in the first half of 2008; but expected to be well contained in the second half.

Over time, high import bill will be paid off by new production capacity and rising exports of manufactured products.

28.3% 27.9%

25%

Trade Deficit 

Yoy CPI

Nov07

Jan08

Feb08

Mar08

Apr08

May08

Jun- Jul-08 Aug08 08

Sep08

Monthly Import, Export & Trade deficit

8 6

2 0 -2 -4

Jan-08

Feb-08

Mar-08

Import (US$bn)

Apr-08

May-08

Export (US$bn)

Jun-08

Jul-08

Aug-08

Sep-08

Trade deficit (US$bn)

1. Some takes on the Vietnam economy for 1H 2008 Since mid-June, economic data point to an improved macro-economic situation and both stock and bond markets show some signs of increased investor confidence:



GDP: Growth slowed to 6.5 % in the first nine months, indicating that tight demand management policies by the Government has shown effects in restraining the economy. The forecast figure is 6% for 2008.



CPI: A significant slowdown in the monthly rate of inflation since July compared to H1 2008



Trade: A marked improvement in the trade deficit owing to both a sharp rise in exports and reduced imports; 2008 YTD deficit for September is USD15b; this deficit is expected to be limited to US$20b in 2008



Foreign direct investment: YTD FDI commitments reached USD57.1b, or 181.3% higher than the whole of 2007, showing continued confidence by foreign investors;



The FX market has been stabilized since the short turmoil period in early June.



The VN-Index has recovered since the low in mid-June.



Both short-term interest rates for bank deposits and long-term bond yields are coming down.

PRIMARY ENERGY SUPPLY CAPABILITIES Up to 2020 - Coal: 50-61 million tons/annum, (32-40 Mt for power generation) - Crude: 10 – 18 million tons/annum - Natural Gas: 14-16 BCM/annum - Hydropower: 58 - 65 TWh/annum - Uranium Potential: RAR: 113 tons, EAR-I: 16563 tons - Up to 2030 - Coal: ~ 70 - 80 million tones/annum - Crude: ~10 – 18 Million tons/annum - Natural Gas: ~14 – 20 BCM/annum - Hydropower ~75 -83 TWh/annum Renewable Energy 2005 Small/mini Hydro Wind Power Solar Cells Biomass Geothermal Total

MW 185.00 0.80 1.15 150.00 0 336.95

GWh 555 na na na 0 ~600

Up to 2020 MW GWh 1000 - 1200 300 - 400 4-6 4,2005,200 310-410 100 1700-2100

Up to 2030 MW GWh

3,500

10,000

MAJOR ENERGY-ECONOMIC INDICATORS ITEMS ITEMS

1990 1990

2005 2005

GDP GDP(USD/cap.) (USD/cap.)

114 114

645 645

Commercial CommercialEnergy EnergyConsumption Consumption(KgOE/cap.) (KgOE/cap.)

63 63

250 250

Electricity ElectricityConsumption Consumption(KWh/cap.) (KWh/cap.)

93 93

540 540

Energy EnergyIntensity Intensity(KgOE/1000USD95) (KgOE/1000USD95)

312 312

500 500

Growth GrowthRate Rateof ofGDP GDP

(%) (%)

7.5 7.5

Growth GrowthRate Rateof ofEnergy EnergyConsumption Consumption(%/year (%/year))

11.2 11.2

Growth GrowthRate Rateof ofElectricity ElectricityConsumption Consumption (%/year (%/year))

14.2 14.2

Energy EnergyElasticity Elasticity

1.5 1.5

Electricity ElectricityElasticity Elasticity

1.9 1.9

Final Energy demand 70000

In d u s try A g ricu ltu re T ran s p o rt C o m m erce res id en ce

60000

K TO E

50000 40000 30000 20000 10000 0

2005

2010

2015

2020

2025

2030

11454

15875

25579

39496

52946

65996

532

728

941

1085

1189

1348

Tr a n spor t

6401

10423

17437

26665

40738

52120

C om m e r c e

2009

3112

5261

7687

10136

12804

319

4390

13088

21748

31927

41518

I n d u str y A g r ic u ltu r e

r e sid e n c e

Renewable Energy 120.0% 100.0% 80.0% Renewable energy

60.0%

Total energy

40.0% 20.0% 0.0%

2005

2010

2015

2020

2025

2030

Renewable energy 41.6% 30.5% 20.4% 15.8% 11.7% 9.4% Total energy

100% 100% 100% 100% 100% 100%

Primary energy balance 2005

Physical unit

2010

KTOE

Physical unit

2015

KTOE

Physical unit

2020

KTOE

Physical unit

2030 Physical unit KTOE

KTOE

Primary energy demand

43832

63023

110627

171828

317391

Domestic energy resouce

61145

76238

93780

103994

121792

include: Coal

32,6Mll. Tons

18271

45,42Mll tons

25440

55,28Mll tons

30960

63,36Mll tons

35482

75Mll tons

42000

Crude oil

17,8Mll. Tons

18120

19,86Mll tons

20217

20Mll tons

20360

20,7Mll tons

21073

20Mll tons

20360

Gas

6,89Bll m3

6205

9,62Bll m3

7759

14,19Bll m3

12772

15,6Bll m3

14040

20Bll m3

18000

Hydro

17,49TWh

3762

33,76TWh

7259

58,67TWh

12614

60,08TWh

12919

67,8TWh

14586

1,99TWh

428

4,2TWh

904

9,78TWh

2104

28,1TWh

6042

45,8Mll tons

15134

49Mll tons

16170

55,7Mll tons

18378

63Mll tons

20805

Small hydro Renewable energy Remain (+) Lack(-)

44,8Mll tons

14788 +17313

+13215

-16847

-67929

-195599

III-Energy consumption in Vietnam Estimated energy consumption in Vietnam

Energy consumptionin2007

(exclude nuclear power)

2,500

billion BTU - billion British Thermal Unit 10,000,000

USA

2,326

8,834,784

9,000,000

China

2,000

8,000,000

1,698

7,000,000 6,000,000

5,163,391

South Korean

1,500

5,000,000 4,000,000 3,000,000

2,729,611

Indonesia

1,000

1,925,420

2,000,000 1,000,000

Thailand 500

2005 Coal

Hydro

Period Annual growth rate

2010

2015

2020

Petroleum

Gas

2005-2010

2010-2015

9%

17%

226

Total consumption 2015-2020 14%

114 86 47 MM1TOE Source: EVN, BP, Wikipedia, MIT…

Vietnam

Electricity – Demand vs supply imbalance Base case

TKw h

T Kw h

1 ,00 0 90 0

High case

1,000 900 800 700 600 500 400 300 200 100 -

80 0 70 0 60 0 50 0 40 0 30 0 20 0 10 0 19 9 5

20 0 0

20 0 5

Elec tric ity output

20 1 0

20 1 5 20 2 0

20 2 5

Elec tric ity dem and (base)

1995 2000 2005 2010 2015 2020 2025 Electricity output

Elec tric ity demand (high)

 Stressful system: in 2008, required capacity of 12,000 – 13,000 MW while maximum capacity is only 12,000 MW.  For years, Vietnam has had a power saving campaign and a rolling black-out calendar.  EVN - import electricity from China. Near future power imports - include Laos & Cambodia (2015: 13 TWh & 35m tons of coal; 2020: import about 38-53% of power demand)  Future is even worse: annual capacity shortage of 800–1,000 MW  Base case: shortage of 46.3 TWh in 2015 and 159.8 TWh in 2020  High case: shortage of 102.4 TWh in 2015 and 270.8 TWh in 2020 (source: Vietnamnet)

Power generation development plan (by types of generation) 100%

80%

60%

40%

20%

0% 2005

Source: EVN

2010

2015

2020

2025

IV-ENERGY CONSUMPTION IN HCMC • •

•

•

Overview of Hochiminh City Biggest city in Viet Nam, located in the Southern. It is over 2000 square kilometers large, with a Subtropical Climate. Population: nearly 7 million permanent inhabitants, nearly 8% population of Vietnam. The daily need of such a population is a great logistic problem for the municipal authorities. A great economical activity occurs around the area. The industrial one is growing by 10% in 2009, contributing to more than 30% of the national GDP growth. The main industries are food processing, textile, garment, plastics, and mechanics. 50% GDP of the HCMC are represented by servicing activities: banking, transport, export, trade and tourism. Agricultural production represents only 10% of the economy. Traffic jam puts a great challenge for development.

Energy consumption •

•

•

Fuel Energy Used by vehicles, industrial plants, and domestic comfortable 4 millions liters of fuel are burned every day for industrial production, power plants, transport. The fuels used are petrol, gas, LPG mainly imported (60% the LPG are imported). Viet Nam is an oil exporting country. But we imported 95% the fuel needs. Dung Quat oil refinery zone was operated in Feb., 2009 supply a large range of oil refined products and a municipal program aiming an efficient and economical use of energy. The most part of industrial plant use old and obsolete technology. Estimations 50% of the industrial equipments are obsolete, 40% are acceptable and 10% are modern equipments.

Energy consumption •

•

•

Electricity Energy In 2007, electric consumption in HCMC is 12.043 billions kWh, Electricity is used in industrial plants as a source of energy, for motors, thermal source, home facilities. Tourism and other linked activities are also great electric energy consumers: air conditioners, over lighting, hot water, entertainment are as many factors of electricity wasting. According to the development planning of the municipality, the energy growth from 2001-2005 is among 12.2% and from 2006-2007 is 8.6% per year. Maximum energy consumption in HCMC in 2007 is 2,121 MW; time for maximum energy consumption is about 6100h.

Energy consumption • In 2007, Vietnam has no enough electricity for using, so electricity HCMC in 2007 is the same situation. cutted down 215 million kWh, includes: public lighting: 37.9%, for office: 33.8%, lighting for advertising: 7.4%, other: 6.7%. Structure for using the electricity in HCMC in 2007 as flowing in table 1:

Table 1: Structure for using the electricity in HCMC in 2007

2005

2006

2007

Industry and Building

4,976

5,395

5,843

Agriculture and Food processing

11.9

11.65

11.78

Service and Trade

1,112.24

1,199.72

1,359.15

Home

3,616.97

4,039.26

4,366.26

Other

487.76

490.41

462.28

Total

10,205.4

11,137.0

12,043.3

Energy consumption • Consumption electricity in 2007 in HCMC is about 1,810.76 kWh/person/year; double 2.6 time in the all country. • Figure 1 show the electricity consumption in 2008 in HCMC:

Figure 1: The electricity consumption in HCMC, 2008

Item

Year

Sale

2005 2010 2015 2020 2025 GWh % GWh % GWh % GWh % GWh % Low Case 100 100 146898 100 216433 100 308511 100 45603 91948

Generation Peak (MW) Consumption per cap. (kWh/cap.annum)

53462

106669

169238

247352

349390

9255

18100

28046

40052

55395

548

1579

2189

2997

Sale

45603

1048 Base Case 100 97111

164961

100 257260

Generation Peak (MW) Consumption per cap. (kWh/cap.annum)

53462

112658

190047

294012

431664

9255

19117

31495

47607

68440

548

1106 High Case 1.26 1272

1774

2629

3703

Agriculture-Forestry-Fishery

574

43.49 3.80

39656

100 12.0 2.7

101148

1672

0.97

47.65 6.28

84958

39.21 5.60

62412

88692

100 10.8 3.0

172354

100 267561 9.6 3.6

381160

0.79

2658

49.29 135398 50.60 6.28 17719 6.62 10828

204149

36.21 7.24 12485

123089

2109

21302

Household-Managerment Others

19831

Sale T&D losses Plant use

45603

Generation

53462

117341

198565

305784

446645

Peak (MW) Consumption per cap. (kWh/cap.annum)

9255

19911

32906

49513

70815

548

1152

1853

2734

3831

1734

48201

1.26

100

Industry-Construction Commercial-Service

2162

46.71 4.74

100

6354 5665

33.15 8.84 23643 100 8.5 4.0

100

0.67

51.76 7.29 28750 31.21 9.06 35741

394388

100 7.5 4.2

GWh 550000

20%

500000

Base Case

450000

low Case

400000 350000

High Case Base Case Growth

18% 16% 14% 12%

300000 10%

250000 200000 150000

8% 6%

100000

4%

50000

2%

0

0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Electricity production per capita in some countries of APEC (Unit: kWh/capita. annum) Year

1980

1990

1995

2000

2005

Australia

6539

9052

9599

10565

12033

Canada

15249

17195

18884

19662

18397

Chile

1054

1402

1972

2676

3203

China

307

547

836

1074

1881

67

212

476

595

552

4847

6748

7670

8454

8850

Malaysia

730

1264

2205

2974

3797

Mexico

916

1373

1562

1954

2178

7121

8936

9607

10271

10526

Philippines

372

424

491

591

681

Korea

977

-

4095

5558

8257

Indonesia Japan

New Zealand

Russia

-

-

5816

6048

6649

Singapore

2886

5126

6308

7607

8833

309

795

1366

1580

2033

10062

11258

12713

13447

14215

131

201

338

635

Thailand United States

Vietnam

-

2.

3.

Initial stage: in 2006 electricity production of the whole country is 60.6 billion kWh, average over 710 kWh/person, the lowest in the ASEA N countries Period 2006 – 2010 with favorable conditions for socio -economic development, starting industrialization, rapid power demand increase for production development, infrastructure construction, making base for next period Period after 2010, the energy conservation and efficiency program, DSM measures; electricity pricing measure, shifting structure of ele ctricity use.. Led to significant electricity demand reduction.

tû k W h 1400

18% 16%

1200

1200

15%

14%

1000

900

10%

9.40%

600 400

12%

680

800

16%

1

1.

5.80%

430 327.8

8% 5.80% 6% 4%

200

2%

0

0% 2003

2005

2010

Tiê u t h ụ đ iệ n , t ỷ k W h 1

2015

2020

Tố c đ ộ t ă n g t rư ở n g

Forecast the demand of energy consumption in 2015 in HCMC

Capacity demand (MW) Energy consumption demand (GWh)

Industry and

Agriculture and

Trade and

Building

Food Processing

Service

1,620

11.5

7.967

25.7

Home

Other

1,203

2,925

560

5,389

10,592 1,987

Policy and mechanism for development and management integrating economy-energyenvironment  ensuring consistency between power development plan with local socioeconomic development plan and land use plan, reasonable land allocated for power project development.  Training environment protectors in power sectors; development of environmental pollution monitoring and controlling system for periodical inspection.

 Thermal power plants:  Using advanced, high efficient technologiess; increasing unit size  Installation of precipitation equipment, de-SOx, application circulating Fluidized boiler technology (CFB)=> reducing NOx;  Using ashes as construction materials,  Application of improvement of combustion chamber; application of coal gasification technology  Plan for stoping operation of old power plants

 Hydropower and renewable energy:

 Resolving social issues of resettlement, calculation of resettlement costs, reseasonable options for ensuring living standards and jobs for resettled people in new residence areas.  Coordinating in regulation of water reservoirs in cascade HPPs.  Application of PSHPP technology for increasing efficiency of water resource, effective operation of HPPs and TPPs combination in order to flatten the load shapes.  Encouraging development of renewable energies (wind, solar, biomass power,…)



Power network:

 using multi-circuit towers: many voltage levels on one power line; using compact towers in urban areas in order to reduce safety corridor and occupiedland; using thermal-resistant conductors; compact substations, GIS substations in urban areas  conducting measures for increasing safety, health protection, environmental quality, avoiding effects of electromagnetic fields on human and environment.

1. Existing: about 150MW of cogeneration power plants using biomass (at sugar plants), 0.8 MW of wind power (on Bach Long Vi island) and solar PV power about 1.15 MW 2. Development potential

-

Small hydropower: ~ 2000MW Geothermal power: potential ~ 200MW Biomass power: 300 -:- 400MW Wind power: 400 -:- 600MW Solar PV power: 4 -:- 6MW  Total power from renewable energies: 2700 -:- 3300MW  About 1200MW of renewable energy can be developed in 2015 (equivalent to 3000GWh); 1500 -:- 1700MW in 2020 (~5000GWh) and 2400 -:- 3000MW in 2025 (~6400-7500GWh)

Save energy • The energetic audit of the nearly 2000 enterprises with an electric power up to 500 KVA. • The enterprises will consider energy saving occasions and carry out the topics. • Funds can be provided by the central governmental energy saving funds or from banks. But some incentive measures are projected with the cleaner production funds. This fund has some advantages such as no interest loan, by long-term payment, easy formalities. Till this day, 6 cleaner production protects are under examination.

Save energy • The formation of energy managers. – Trainers were formed; they are lecturers form some university in HCMC. From this course, the DOST develop training sessions for some hundred energy managers in three main economic activities: paper mill, plastics mounding and textile dyeing with the cooperation of the mentioned universities. – Energy saving topics in the MSc degree course of the universities.

• One of the major difficulties of this topic is the source of the special equipment needed by the enterprises for the improvement of their old machines (some of them are 50 years old). The experts find easily the energy waste in industrial production for example: paper mills: the energy waste is among 20%; plastic factories: it goes from 7 to 40 %; in a experimental energy audit carried out in a four star hotel in HCMC shows 20% of energy can be saved and the investment is paid back only in two months (by the side this hotel just receives an ISO 9000 certificate for the quality of it services).

Save energy • Ministry of Industry (MoIT) rules the use of energy on the whole country, policy on the efficiency and economy of energy. Municipal policy on the energy: demanding the enterprises to make their energy audit and to design energy conservation device for their equipment especially for heat, electric energy, water recycling. In 2002, a decree demands all the enterprises to make their energy audit. The implementation of energy conservation center in HCMC. There are a lot of organisms making energy audit. • The coordinating energy saving activities on the HCMC municipality and as a correspondent of the central government energy saving program (managed by the MOST). • DOST sets up a short term training program for energy managers on the municipal area, supported by EDP (the Netherlands) ADEME (France) JECC (Japan). According to the Ministry decree, DOST must support the newly formed energy auditors.

Save energy • The experienced experts are not enough for facing increasing demands. Too, for the managers project managers, we have devotes but inexperienced managers. They must be trained in their new jobs and the DOST himself has not too experience in the domain. A huge works must be done in the next years in energy domain to maintain a sustainable economic development in the country.



The power demand forecast was made for the period 2006 – 2010 considered conditions and policies to attract investment capital from domes tic and foreign resources. The demand forecast may not take into account all fac tors of rapid developing economy and integration. The power demand forecast were for base case, and high case, which shall be upgraded, reviews annually and report to the Government for adjusting plan.



Although the trade electricity energy in HCMC has reduced since the few years ago but it is still is biggest amount in Vietnam. So we need to cut down the consumption of it, save energy and use renewable energy forms in order to protect the environment for sustainable develop.



In order to reduce risk of short term electricity shortage and long term investment, measures for encouraging electricity saving, DSM programs need t o be applied.



Schedules of power plants in the period 2006 – 2010 in the base case were calculated with reserve when power demand increases higher than normal and if some power plants are delayed; The power generation program is m ore difficult when power system is large, therefore, it requires close control of preparation and implementation process in order to avoid delay as approved in the Plan.









MP VI strictly followed the contents of “Strategy of power development” which was approved and the draft “National energy Strategy” which is being submitted to the Government for approval. Regarding arrangement of power plants in 3 regions, it need to make planning of sites for new power centers of ~6000MW coal TPPs in the North; ~2400MW of coal TPPs in the Central; ~5000MW of coal TPPs in the South and over 2000MW gas TPPs in the South. In order to reach rate of 3-4% electricity from renewable power plants, it needs to have mechanisms on price subsidy, procedures and encouraging development of small hydropower projects, wind power projects, biomass and geothermal power projects,.. However, it needs to monitor investment process in order to avoid the low efficient projects. MP VI strictly followed the contents of “Strategy of power development” which was approved and the draft “National energy Strategy” which is being submitted to the Government for approval. Regarding arrangement of power plants in 3 regions, it need to make planning of sites for new power centers of ~6000MW coal TPPs in the North; ~2400MW of coal TPPs in the Central; ~5000MW of coal TPPs in the South and over 2000MW gas TPPs in the South. In order to reach rate of 3-4% electricity from renewable power plants, it needs to have mechanisms on price subsidy, procedures and encouraging development of small hydropower projects, wind power projects, biomass and geothermal power projects,.. However, it needs to monitor investment process in order to avoid the low efficient projects.









With relatively big volume of lines and substations to be constructed, apart from application of new technology (such as many circuit on one line, many voltage levels, compact tower, GIS substation,..) it needs the local support in consensus of line routes and arrangement of land for substations in order to avoid overlapped planning and reduce socio-environmental impacts. Promoting cooperation on preparation of construction investment hydropower projects in Laos and Cambodia and interconnection with Chinese 220-500kV power system. Power network investment program is about 4 billion USD/year, will meet many difficulties. It is recommended that the Government to give priority for using OCR, ODA resources,.. Encouraging diversification of power generation project owners, mobilizing finance from such resources as bond, equitization, foreign BOT power projects at reasonable rate. In order to ensure financial balance for the whole power sector, encouraging investors in development of electricity market, electricity conservation and efficiency, it is recommended that the Government permit to increase electricity tariffs according to the roadmap to 7 US cent/kWh in 2010 and 7.5 US cent/kWh in 2015