1. Mr. Phuong Hoang Kim Energy Efficiency Office Ministry of Industry REVIEW OF VIETNAM ENERGY EFFICIENCY & CONSERVATION POLICY

2. Contents  Energy situation in Vietnam.  Policy framework for promoting energy efficiency and energy conservation activities.

3. 1. Energy situation in Vietnam Energy Indicators  In the year 2000: Energy Intensity: 412 kgOE/1000USD GDP per capita: 401 USD, GDP growth rate 6.8% Energy consumption per capita: 154 kg TOE/year Electricity consumption per capita: 288 kWh/year  In the year 2005: Energy Intensity : 500 kgOE/1000USD (USD 1994) GDP per capita: 645 USD, GDP growth rate 8.4 % Energy consumption per capita: 250 kgOE/year Electricity consumption per capita: 540 kWh/year

4. Overview of Current Socio-economic situation GDP Growth rates for the whole country in the period 2000-2005 Year 200020012002200320042005 Total 6,86,97,047,247,7 8.4 Agriculture, Forest & Fishing 4,63,04,13,23,4 4.0 Industry & Construction 10,110,49,410,3 10.6 Service5,36,16,56,67,5 8.5 Unit: %

5. Vietnam energy sector Energy resources l Coal: 5.88 billion tons l Oil: 1.6-1.8 billion tons l Gas: 2,400-2,700 billion.m 3 l Hydropower: 83 billion.kWh l Uranium deposits: 218,167 tons of U 3 O 8 l Geothermal resources: 200 MW l Solar Energy: 43.9 Billions TOE per annum l Biomass energy: 43-46 TOE per annum 1. Energy situation in Vietnam

6. ProductionUnitAmount ElectricityBill kWh53.5 Coal (Export) Mill Tons34.1 (18.0) Crude Oil (Export) Mill Tons18.6 (18.6) GasBill m 3 6.9 Energy Production in 2005

7. Electric Power System 2005 Electric Generation: 53.462GWh Total Installed Capacity: 11.298MW Available Capacity: 10.937MW Pmax: 9.255 MW Aver. growth rate of sales electricity 2001 - 2005: 15,3% 1. Energy situation in Vietnam

8. Electrical Consumption by Sector (base case)

9. Energy Demand Forecast Year200020102015 20202025 Sectors\ScenariosBase/High Industry4,36315,77/16,2921,68/23,74 29,1/33,1236,7/42,312 Agriculture8150,65/0,740,85/0.89 0.93/0,990.88/0,966 Transport4,3379,7/10,1314,69/16,41 19,84/26,4422,57/33,988 Service8962,93/3,14,55/5,19 6,33/7,647,77/9,662 Households1,76618,57/19,3923,46/26,1127,81/33,1129,36/36,871 Total12,17747,63/49,6265,22/72,3483,99/101,3197,3/123,8 Unit: KTOE 1. Energy situation in Vietnam

10. Characteristics of Vietnam’s Energy Sector  Low energy consumption per capita  Low Energy Efficiency in both supply and demand sides, high Energy Intensity  Energy Elasticity: 1.46  Industrial Energy Intensity: 600-700 kgOE/1000 USD  Unfavorable condition for foreign and private investment in energy sector  Unreasonable in energy pricing;  Investment does not meet the development requirement.

11. Policy Framework for Promoting Energy Efficiency and Energy Conservation Activities

12. Present regulatory framework l Electricity Law ä Enforced on July 01 2005 ä Comprises of one Chapter that specifies Electricity Efficiency in generation, transmission, distribution and utilization l Decree No.102/2003/ND-CP on EE&C ä Issued on Sep. 3rd 2003 ä MOI has responsibilities to conduct the program of EE&C l Circular No. 01/2004/TT/BCN on EE&C: ä Issued on July 7 th 2004 ä To enforce the Decree No. 102/2003/ND-CP, serves as the guideline for energy conservation and its efficient use in factories l Circular No. 08/2006/TT/BCN ä Issued on November 16 th 2006:  to enforce the Decree No. 102/2003/ND-CP served as guideline for Energy Efficiency Standard and Labeling.

13. Present regulatory framework l EE Commercial Building Code No. 40/2005/QD-BXD ä Promulgated on November 17 th, 2005 ä Applicable on commercial buildings to reduce energy loss in building and to improve the condition for people working/living in buildings l Decision No.79/2006/QD-TTg: National Energy Efficiency Program ä Issued on April 14 th 2006 by Prime Minister ä 11 projects to promote EE&C activities l Decision No.80/2006/QD-TTg: Electricity saving program for the period 2006- 2010 ä Issued on April 14 th 2006 by Prime Minister ä Increasing awareness of public and Electricity Saving l Decision No.919/QD-BCN: Establishment of the EE&C Office ä Issued on April 7 th 2006 by MOI Minister

14. Key policies l Decision No.79/2006/QD-TTg: National Energy Efficiency Program: ä Duration: 2006 - 2015 ä Targets: Saving 3 - 5% for the period of 2006-2010 & 5 - 8% for the period of 2011-2015 Establishing models for energy management Populating high-efficiency equipment Implementation Building code (MOC) Energy Efficiency use in Transport Sector

15. l Decision No.79/2006/QD-TTg: National Energy Efficiency Program: ä Specific Activities: 1.Completing legal framework on energy saving and effective use 2.Increasing community’s awareness on energy saving & effective use 3.Introducing training courses on energy saving and effective use to national education system 4.Piloting campaign on establishment of model “energy saving in each household” Key policies

16. l Decision No.79/2006/QD-TTg: National Energy Efficiency Program: ä Specific Activities: (cont.) 5.Introducing standards and energy-saving labels for appliances 6.Providing technical assistant to domestic manufacturers 7.Establishing controlling model of energy saving & effective use in enterprises 8.Assisting enterprises to upgrade, improve and rationalize use of energy Key policies

17. l Decision No.79/2006/QD-TTg: National Energy Efficiency Program: ä Specific Activities: (cont.) 9.Improving capability and implementing activities of energy saving & effective use in building designing and management 10.Developing models and introducing respectable practices on energy management in buildings 11.Maximizing the utilization of transportation means, reducing energy consumption and emission Key policies

18. l Decision No.80/2006/QD-TTg: Electrical saving program ä Duration: 2006-2010 ä Target: raise the community’s awareness of electricity saving and effective use. Ensure the electricity saving and effective use, security and stability electricity supply. ä General activities: Increasing public awareness Encouraging electricity efficiency in generation, transmission, distribution and end-user (government offices: saving at least 10% of yearly electrical consumption).

19. Problems & Barriers l Inadequate policy implementation capacity, lack of timely development and implementation of the necessary regulations, circulars, supportive and control mechanism and enforcement. l Lack of knowledge, information, skills and coordination to promote and coordinate the promotion of energy efficiency. l Low energy prices: this situation obviously limits the demand for EE&C services. l Financial Incentives, such as tax or pricing incentives, have to be emphasized in energy efficiency and conservation projects. l Lack of commitment of top management: This issue can relate to several factors including limited capacity, limited awareness, or lack of incentives. l Lack of financing for retrofitting: potential means of addressing this issue and lack of financing in general.

20. A few other barriers and issues have been identified l A potential lack of locally manufactured cheaper energy efficient equipment can also slow down the development of energy efficiency and conservation. Limited awareness about energy conservation services/expert: this contributes to reduce the demand for such services. l A lack of benchmarking information regarding energy performance of various processes in different industrial sub-sectors. l The lack of reliable data available for Monitoring and tracking. Problems & Barriers

21. Thank you for your attention