Opening Remarks by Mr. Patrick Haverman, Deputy Resident Representative, UNDP in Viet Nam
Viet Nam Energy Partnership Group (VEPG) Technical Working Group (TWG) 4 on Energy Efficiency
November 16, 2023
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Mr. Patrick Haverman, Deputy Resident Representative, UNDP in Viet Nam
Mr. Trinh Quoc Vu, Deputy Director General of the Department of Energy Efficiency and Sustainable Development of the Ministry of Industry and Trade,
Colleagues, Ladies and Gentlemen,
A very good afternoon and xin chào to you all.
It is a great pleasure to welcome all online and in-person participants to the first Viet Nam Energy Partnership Group Technical Working Group 4 on Energy Efficiency Meeting.
The sharing and experiences from MoIT, ECC Ha Noi, GGGI, ADB, and Pioneer International Consulting will provide us with valuable insights on existing energy efficiency policies, identifying obstacles and challenges, and discussing policy options for enhancing energy efficiency measures and compliance in Viet Nam.
The importance of energy efficiency is not to be understated. The International Energy Agency estimates that energy efficiency improvements could contribute as much as 47% of reductions in energy-related CO2 emissions achievable by 2030.
The IEA calls for an increase in annual energy efficiency progress from 2.2% to 4% by 2030 to maintain the goal of limiting global temperature increases to no more than 1.5°C above pre-industrial levels. This could cut CO2 emissions by one third from current levels. Energy efficiency is often the least costly intervention compared to alternatives, and yet it yields a high return on investment in the form of savings in energy costs.
As Viet Nam faces an approximately 8.5 percent annual growth rate in energy demand, improving energy efficiency is a foremost national priority in achieving these targets and realizing carbon neutrality by 2050, as pledged by Viet Nam at COP26.
In recent years, government efforts have been ramped up to reflect this, including the implementation of VNEEP3 (2019-2030) to address the country’s growing energy demand, while reducing national energy consumption by 8 to 10 percent and power loss by 6 percent by 2023.
Moreover, Power Development Plan 8 emphasizes the promotion of demand-side management activities, including energy efficiency and demand response.
The importance of energy efficiency is furthermore underscored in the Political Declaration on establishing the Just Energy Transition Partnership (JETP) with Viet Nam and is one of the key priorities identified in the draft JETP-Resource Mobilization Plan, which is currently under review and finalization for launch at COP28.
Despite these efforts, there remain several significant concerns for public and private sector actors, businesses, and individuals in the implementation of energy efficiency measures in Viet Nam.
First, in terms of technical barriers: there is a need to build technical expertise and further develop energy efficiency services. This stresses the need for additional capacity building and training for existing and new auditors.
Second, there is a lack of supportive policies for energy efficiency; there is a need to improve the policy framework and enabling environment and set improved energy efficiency codes and standards for appliances and buildings. These may come in the form of efficiency requirements for new and retrofitted buildings.
Third, in terms of financial barriers, we must develop incentives for investments in energy efficiency and improve their affordability. High upfront investment costs and limited funding for energy efficiency projects in Viet Nam present challenges, especially for small and medium enterprises. Examples of incentive policies to enable investment in energy-efficient equipment and technologies could include reduced taxes or direct subsidies, as well as indirect subsidies towards training and education.
Fourth, due to limited public awareness on energy efficiency, many businesses and individuals in Viet Nam remain largely unaware of the benefits of energy efficiency measures. Public awareness campaigns are essential tools for individual and community involvement in the implementation of public energy efficiency strategies. To be effective, such initiatives should include actionable recommendations, and focus on the multiple benefits of energy efficiency measures (such as on health and wellbeing) to stimulate public action.
Fifth, drawing from the project on accelerating energy efficiency in large industries, funded by the EU and implemented by UNIDO and MoIT’s Department of Energy Efficiency and Sustainable Development, we must advance the implementation of energy management systems to help track and manage consumption. These efforts must be twinned with the strengthening and enforcement of existing compliance mechanisms, for instance in the form of regular comprehensive inspections and audits that bring about higher enforceable penalties.
To leverage the strong emissions reduction and economic savings potential of energy efficiency measures, the Government of Viet Nam needs to address these challenges, including through improving financial support mechanisms and developing an enhanced regulatory and legal framework.
Colleagues, Ladies and Gentlemen,
In recognizing that buildings are among the largest energy consumers in Viet Nam, accounting for 35 to 40 percent of total energy consumption, and that rapid urbanization and the ensuing expansion of the building sector threatens to increase this share of energy consumption, UNDP, as co-chair of Technical Working Group 4 on Energy Efficiency, is leading a Task Force on Energy Efficiency in Buildings.
UNDP is undertaking a review of policies and formulating recommendations to promote energy efficiency improvement in buildings.
Specifically, our analysis includes concrete recommendations for the revision of the Law on Economic and Efficient Use of Energy of 2011.
On 29 August, we held a Consultation Meeting at which we presented our draft report and preliminary findings, which benefited from inputs and comments from the Ministry of Industry and Trade, the Ministry of Construction, and other key stakeholders. This has since been revised, and will be presented by Dr. Nguyen Trung Hoa later in the session.
For improved coordination in this domain, we welcome discussions with and contributions from other stakeholders and partners engaged in work in this focus area, especially as we collectively identify priority topics and formulate the workplan of Technical Working Group 4 for 2024.
Colleagues, Ladies and Gentlemen,
Targeted interventions and policy actions are needed to improve energy efficiency to support Viet Nam’s implementation of its JETP, achieve targets set out in PDP8 and other national strategies and plans, and realize its bold climate commitments.
It is critically important that we continue to foster experience sharing on energy efficiency and explore opportunities for enhancing energy efficiency in Viet Nam.
This includes establishing an improved policy and regulatory framework for energy saving and energy efficiency; promoting energy efficiency measures in energy-intensive sectors, in particular the construction sector by “building green” and developing sustainable construction; promoting the energy saving market, learning from international experiences as evidenced by the success of ESCOs.
I very much look forward to insightful presentations and fruitful discussions today.
I wish you all good health, happiness and success.
Thank you very much! Xin cam on!