Decision on Vietnam National Energy Development Strategy up to 2020 and vision to 2050

DECISION

RATIFYING VIETNAM NATIONAL ENERGY DEVELOPMENT STRATEGY UP TO 2020 AND VISION TO 2050

THE PRIME MINISTER

Pursuant to the Law on Organization of the Government of December 25, 2011;

Pursuant to the Degree No.18-NQ/TW dated October 25, 2007 of Politburo on the orientation of Vietnam National Energy Development Strategy up to 2020 and Vision to 2050.

At the proposal of the Ministry of Industry and Trade (Document No.4167/BCT-NLDK dated December 19, 2007).

DECIDES:

Article 1- To ratify Vietnam National Energy Development Strategy up to 2020 and Vision to 2050 with the following major contents:

Developing Outlook

1. To develop energy in association with the National socio-economic development strategy and ensure for one step-ahead with sustainable and synchronous development at high speed paralleled with to diversify energy sources and energy saving technology is the key task for the National industrialization and modernization.

2. To develop the National Energy in compliance with the International integration, making use of domestic resources combined with exploiting and using reasonably oversea resources, constructing an open national energy security, making regional and global cooperation effectively and developing an independent economy.

3. Step by step to construct an energy market, diversifying possession and business methods to aim at satisfying customers’ benefit best. To promote the subsidization and exclusive elimination towards completely eliminating social policy performance through energy price.

4. To develop synchronously and reasonably the energy system: power, petroleum, coal, new and renewable energies, paying attention to developing clean energy, giving priority to developing new and renewable energies. To allocate reasonably the energy system depending to locations and regions; to balance the survey, exploiting and processing; to develop synchronously the service and recycling system.

5. To apply the achievement of knowledge economy to improve energy business productivity and efficiency. To attach much importance to energy saving and loss reduction.

6. To develop energy in strong combination with environment protection, ensuring sustainable energy development.

Developing Objectives

1. General Objectives

• To contribute to the success in meeting the targets set in the socio-economic development strategy by Communist Party, the general objectives of Vietnam National Energy Development Strategy up to 2020 and vision to 2050 are: ensuring National energy security to contribute to the stabilizing the National security and defense as well as developing an independent and self-control economy; supplying sufficiently high quality energy for socio-economic development; exploiting; using reasonably and efficiently the domestic resources; diversifying energy investment and business methods, establishing and developing a competitive energy market; promoting new and renewable energy sources, bio-energy, nuclear power to meet the demand on socio-economic development, especially in remote, border and island areas; for last, effective and sustainable development in association with environment protection.

2. Specific objectives

• To strive for supplying sufficiently energy for the socio-economic development as follows: primary energy for 2020 is about 47.5 to 49.5 million TOE (tone of oil equivalent), for 2020 is 100 to 110 TOE, is about 110 to 120 TOE in 2025 and about 310 to 320 TOE in 2050.

• To enhance the accuracy in evaluating primary energy reserves (coal, petroleum, hydro-power, uranium). To expand the regional and global cooperation in searching. Exploring and exploiting oversea coal, oil and gas, as well as other energy sources to supplement to the domestic energy sources.

• To develop power sources and transmission network to meet the demand on socio-economic development to 2010 at the rate of 99.7% for power source coverage and n-1 standard for transmission network.

• To promote oil refinery plants to meet the domestic demand on oil products with the total capacity of about 25 to 30 million tons of crude oil in 2020.

• To ensure the National strategic oil spare at 45 consumption days on average in 2010, at 60 days in 2020 and 90 days in 2025.

• To strive to improve the ratio of new and renewable energy sources to approximately 3% of the total primary energy sources in 2010, to about 5% in 2020 and about 11% in 2025.

• To fulfill the suburban and mountainous energy program. To promote the rate of suburban household using commercial energy for cooking to 50% in 2010 and 80% in 2020. To ensure energy availability for 95% suburban households in 2010, and for mostly suburban households in 2020.

• To set long-run environmental targets and standards in agreement with regional and international ones and in compliance with domestic economic situation. To control and to reduce the environment pollution in energy activities; to ensure that all energy plants will meet environmental requirements in 2015.

• To largely transmit power, coal, oil and gas sectors to competitive market mechanism regulated by the Government. To establish a competitive retail power market since 2022 and commercial market for coal, oil, and gas from now to 2015.

• To actively prepare necessary and synchronous conditions for the operation of the first nuclear power unit in 2020, and then to enhance the nuclear power density in the national power structure. To 2050, nuclear power will take account for 15-20% of the National Commercial power consumption.

• To promote International cooperation in energy. To strive to Inter-connect to the regional power network (through 500KV voltage level) from 2010 to 2015 and to the regional natural gas network in from 2015 to 2020.

Developing Orientation

1. Orientation for Power development

• To ensure supplying enough power for National socio-economic development. To give priorities to constructing reasonably hydro-power plants in association with developing coal-fired and natural gas-fired thermal power plants. To encourage to develop power sources of new and renewable energies.

• To orient power development in the direction of possession diversifying. The Electricity of Vietnam (EVN) shall be mainly responsible for developing power sources and National transmission system. To make public the list of investment projects and to encourage both domestic and oversea economic elements to take part in power generation and distribution.

• To diversify forms of investment in developing power sources and distribution.

• To continue making models and to expand gradually the equitizing of power plants and distribution units.

• To separate public benefit activities from manufacture and business activities. To provide price support for power activities in remote areas.

• To expand International cooperation and integration.
• To gradually establish and develop power market in Vietnam.

• To study to develop nuclear power plants.

• To ensure sustainable development and to reduce negative impacts on environment.

2. Orientation for Coal development

• To promote the exploring and evaluation of Coal reserves at the level of under -300m and under from -400 to -1100m in Quang Ninh coal mines.

• To encourage localities to invest in exploring and exploiting on-site coal to self-supply.

• To take advantages of capital sources to explore, evaluate and study for exploiting capability of coal reserves in Red river Delta area.

• To develop stably and sustainably Coal sector to meet the demand of National Economy; to ensure the stability of the domestic coal market and a sound part for exports.

• To develop coal sector in association with socio-economic, tourism, national defense and security development and environmental protection.

• To encourage economic elements to invest in exploiting, selecting and distributing coal. To establish road map for equitizing coal factories and towards to form coal market.

3. Orientation for Oil and Gas development

• To separate the state administrative function from the business managerial function of management and business organizations in oil and gas sector. To bring the state administrative functions of oil and gas together in a whole.

• To establish legal background for oil and gas activities, to pay much attention to intermediate and low level activities, including important tasks of economic and technical management in natural gas sector: issuing license for gas transport and distribution, approving gas price, fee level for gas transport distribution, regulations on technical standards, etc…

• To encourage and to boost up oil and gas exploration; to construct a well-organized and efficient system to supervise contracts and to decide bids of oil exploring; to periodically revise and amend financial terms of investment in oil and gas exploring in order to enhance competitiveness of domestic oil industry.

• To give priorities to developing and exploiting natural gas. To encourage and give preference to investment in exploring and exploiting gas mines, especially mines with marginal limited reserves. To diversify forms of investment, joint-venture in constructing gas-fired power plants to sell power for the National Network.
• To build policies to encourage foreign investors to use high technologies to exploit gas and oil mines with marginal limited reserves.

Policies in Oil and Gas processing sector:

• To encourage foreign investors to take part in joint-venture of constructing oil refinery, petrochemical plants and to take part in the distribution with a certain market share.
• To attract businesses of oil and gas products to take part in joint-venture of developing oil refinery plants to attract manufacturer to consumption, sharing profits between manufacture and business.
• The State encourages and protects oversea oil and gas exploring activities of Vietnam enterprises.

4. Orientation of new and renewable energy development

• In term of planning: new and renewable energies are not fully evaluated, it is necessary to have appropriate plan and investment for study to supplement data for planning and zoning these energy sources in order to build plan for reasonable investment and exploitation. To establish specialized organizations, including different economic elements, to investigate and make plan. To propaganda, to research, to experimental manufacture and then to implement nationwide.

• To propaganda for the use of new and renewable energies to the energy saving program and other National target programs such as, Countryside electricifying program, Afforesting program, Hunger and Poverty elimination, Clean water, VAC model, etc…

• To encourage enterprises to construct appropriate facilities to manufacture, assembly and repair equipments of new energy such as: water boiler, small hydro power, wind engine, bio-gas cellar, etc. in conditioned locations. To cooperate and to buy technologies from developed countries to assembly high technology equipments such as solar cell, wind power, etc. and then to assembly and manufacture inside the country.

• To give investment support for programs of investing, studying, experimentally manufacturing and constructing typical locations using new and renewable energies; to give preference on import tax for new equipments and technologies as well as tax on equipment manufacture and transport; to protect copyright of valuable invention and innovation.

• To allow domestic, oversea organizations and individuals to coordinate in investment in exploiting new and renewable energies that based on mutual benefit.

Policies

1. Policy of ensuring National Energy Security

To settle the policy of ensuring National energy security as a priority in the direction of developing synchronously energy sources; to exploit and utilize economically domestic energy sources; to reduce the dependence on imported oil products; to export coal reasonably (to cut down the coal exports in short time); to connect to the regional energy system; to increase petroleum reserve level; to associate energy security with ensuring the National defense and security.

2. Policy of energy price

The policy of energy price should be considered to be one of the breakthrough policies; to quickly eliminate exclusiveness and subsidization in energy manufacture and consumption. The energy price should be defined in accordance with the market mechanism; the Government should regulate energy price through tax policy and other management tools.

3. Policy of investment in developing new and renewable energies, bio-energy, nuclear power

To settle the development of new and renewable energy, bio-energy, nuclear power as a priority. To encourage oversea investment to seek for energy sources; to build policy to ensure the fair between economic elements taking part in energy development.

4. Policy of economical and effective energy utilization

It is necessary to define specific requirements on saving for sectors spending much energy in the policies of encouraging economical and effective energy utilization; to encourage the application of new energy saving technology and equipment.

5. Policy of environment protection

The policy of environment protection aims at associating the energy exploitation and utilization to the good management in environment; to apply advanced and appropriate environmental standards.

Solutions for implementation

1. Solutions of developing investment

• To furnish the organization and management of Corporations: Electricity of Vietnam, Vietnam National Coal-Mineral Industry Group, Petrol Vietnam in the direction of being Industry- Commerce- Finance doing business domestically and internationally in multi sectors, playing key role in energy developing investment.

• To take into consideration of expanding the primary energy exploring and exploitation in remote islands, common marine are of Vietnam and other regional countries.

• To promote the International cooperation in energy sector especially with neighboring Nations (Laos, Cambodia, China); to effectively utilize energy sources from abroad.

• To make public the list of all investment projects; to encourage domestic and foreign economic elements to invest in energy sector.

2. Solutions of financial mechanism

• To increase capital from state budget for energy projects in suburb, mountainous areas, islands to contribute to socio-economic development and hunger, poverty elimination in these areas; to take into consideration of establishing energy development fund to support for developing new and renewable energies as well as implementing public benefits projects.

• To give priorities in allocating capital from development assistance fund, ODA capital source and other bilateral loan capital from oversea for energy projects such as: exploring, developing new and renewable energies, bio-energy, etc.

3. Solutions of Human resource development

• To focus on traning, improving professional skills for managerial, technical and technological staff; to train in advance and to supplement for deficient and weak sectors, especially new and renewable energies, bio-energy, petro-chemical and oil refinery, nuclear power.

• To promote scientific researches and new technology application, especially in searching, exploring oil and coal; to re-arrange scientific and technological research agencies, to train deeply and concentratively; to develop synchronously science and technology potential, to apply and innovate foreign technology, to come and create new technology of Vietnam Energy.

• To promote the implementation of energy saving solutions; to enhance the cooperation of government with Fatherland Front and organizations in campaigning for economical and effective energy utilization and environment protection.

4. Solutions of organizing mechanism

• To re-organize energy sector, step by step, to form a fair competitive energy market on the basis of ensuring socio-economic stability.

• To issue new legal documents and to amend, supplement and complete current ones so that energy enterprises could operate in accordance with the market mechanism; to eliminate exclusiveness.

Article 2: asks of the concerned Ministries, Branches and Bodies:

1. The Ministry of Industry and Trade:

• To manage and direct the implementation of Vietnam National Energy development strategy up to 2020 and vison up to 2050.

• To direct the establishment of the planning for Energy development and sub-energy sector development: power, coal, oil, gas for each period of socio-economic development.

• To direct the evaluation and update of energy demand to set reasonable plan for developing energy plants to meet the National Energy demand. To actively calculate and propose in time adjustment in case of large variation in energy demand and capacity.
• To study, to propose mechanism and policies for implementing Vietnam National Energy development strategy up to 2020 and vision to 2050 in compliance with regulated authorities.

2. The Ministry of Natural Resources and Environment

• To direct the cooperation with concerned ministries and branches in surveying, exploring, and evaluating reserves of energy resources.

3. The Ministry of Finance and the Ministry of Planning and Investment, State Bank of Vietnam

• To cooperate in studying, furnishing and issuing mechanism for effective capital mobilization and utilization in energy developing investment.

4. The Ministry of Science and Technology

• To cooperate with the Ministry of Industry and Trade in directing the implementation of programs enhancing science-technological activities in energy sector in the direction of acquiring and applying advanced and power saving technologies of the world.

5. The Ministry of Education and Training

To take the prime responsibility and coordinate with the Ministry of Industry and Trade and the Ministry of Labor-War Invalids and Social Welfare in directing the establishment of training programs and carrying out training for  skillful technical staff, operators, especially for nuclear power sector, to meet the demand on the human resource for energy development.

Other concerned ministries, branches, localities, enterprises, bodies and individuals are responsible for well executing this Strategy in compliance with one’s function and duty.

Article 3: This Decision comes into effect 15 days after its publicity in the Official Gazette.

Article 4: The Ministries, the Heads of ministerial bodies, Heads of Government bodies, the presidents of provincial/municipal People’s Committees, and concerned bodies, individuals shall have to implement this Decison.

PRIME MINISTER

Nguyen Tan Dung

VietnamEnergy.vn