Energy Market Interconnection in ASEAN

von Peter Hefele

Implications for Vietnam

On the 20.11.2018 KAS RECAP, in cooperation with the local partner Institute of Energy and Environment, Vietnam (IEEV), hosted a workshop in Hanoi, Vietnam. The event was the follow-up of an event in Bangkok earlier this year on how to improve the access to electricity in Southeast Asia . This time the emphasis was on the development and perspectives of the Vietnamese energy and electricity market.

The conference began with welcoming remarks by the KAS Vietnam Director Peter Girke who highlighted the many different political, social, and legal aspects that need to be considered when discussing the development of energy markets. Girke’s remarks were followed by those of the KAS RECAP Director Dr. Peter Hefele, who emphasized the growing importance of electricity in countries’ energy consumption, how renewable energy can be an effective tool to extend the access to electricity to remote areas, and reiterated the importance of legal and political frameworks in the effort to improve access to electricity. Dr. Pham Khanh Toan from the Institute of Energy and Environment (IEEV) echoed the points of his previous speakers and highlighted the importance of cross country cooperation in Vietnam’s effort to develop its energy grid.

The keynote speech by Professor Anthony D. Owen from the Energy Studies Institute/NUS Singapore, primarily dealt with the development of energy markets within ASEAN with a particular focus on Vietnam. Owen commended Vietnam for rapidly expanding the population’s access to electricity and mapped broader trends of electricity access in the ASEAN region. He put particular emphasis on the extent to which energy markets are liberalized in ASEAN, what incentives are created as a result, and what ramifications this has for the type of energy sources used. Finally, Owen problematized the rapid expansion of power plants powered by coal in Vietnam and other ASEAN countries and proposed policy changes in order to both make energy production more efficient and to develop “clean” electricity sources.

The keynote speech was followed by several statements from Vietnamese government employees and energy experts, as well as an open discussion. Mr. Pham Thanh Tung, who attended the conference on behalf of the Ministry of Industry and Trade (MOIT), broadly agreed with Owen’s analysis, emphasizing the importance of creating an effective political and legal framework. Furthermore, he also highlighted a series of technical challenges to improving energy access in Vietnam. The second statement in response to Owen’s presentation was made by Mr Tran Manh Hung from the Institute of Energy, which emphasized the role of businesses in order to develop the Vietnamese energy market. Finally, Mr. Tran Hong Ky from the World Bank Vietnam made a statement, which put an emphasis on the importance of the finance sector in promoting the universal and reliable access to electricity. Following the three statements, an in-depth discussion ensued covering the effects of subsidies on energy markets, lessons that can be learned from developed countries, and the advantages and disadvantages of hydro power. The workshop was concluded with closing remarks from Professor Anthony Owen, Dr. Peter Hefele, and Mr. Pham Thanh Tung, which all highlighted the importance of continuing the exchange of ideas and expertise in order to improve the access to electricity in Southeast Asia.

This series of workshops will to be continued in other ASEAN countries in 2019.

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