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Mr Loui Algren, Long-term Advisor of the Denmark-Vietnam Energy Partnership Program, shared his ideas about the most profound lessons from Denmark, how they can be applied in Vietnam, as well as some DEPP’s activities to assist the Vietnamese green transition.
The green energy transition is becoming one of the top concerns more than ever since energy is essential for society’s activities. Moreover, under the pressure of climate change, a green transition is considered as the sole way to sustainability.
However, renewable energy is unstable, only effective in a particular time, and high cost. Its “irritating” feature sows doubt in the public about the investment effectiveness of renewable energy.
Denmark is one of the leading countries in renewable energy development, especially offshore wind. In Denmark, 67% of the energy comes from renewable energy, and almost 50% of electricity from wind power (according to DEA). Since 2013, Denmark and Vietnam have established a Comprehensive Partnership. Since then, Denmark has provided great support to Vietnam in transiting the energy sector towards clean and low-carbon development.
In this article, Mr Loui Algren, Long-term Advisor of the Denmark-Vietnam Energy Partnership Program (DEPP), shared his ideas about the most profound lessons from Denmark, how they can be applied in Vietnam, as well as some DEPP’s activities to assist the green process of Vietnam.
Renewable energy has not been harnessed to its maximized capacity in the last few years. However, he thinks this factor could be overcome very soon when forecasting capacity is improved and with the support of advanced tools.
Regarding the investment cost, the Danish expert commented that this factor has been solved gradually due to technology improvement and other factors. To illustrate this idea, he mentioned that the cost of renewable energy sources, in general, has remarkably reduced in the short-term, such as solar power and onshore wind power.
Besides, as renewable energy is abundant, it can significantly contribute to the increasing energy demand for economic development. It is extremely important in the context of conventional energy sources dying out and supply chain disruption. “The Energy Outlook Report shows that even without carbon tax or emissions reduction targets, renewable energy sources, such as large-scale solar, should at least double by 2030 from a cost-efficiency perspective. Definitely, the cost will decrease and investment efficiency will increase,” he said.
Besides, the ancillary services market will also contribute to stabilizing the renewable energy market. According to the experiences of the EU and the US, incentive schemes are needed to encourage suppliers to actively participate in the market at the first stage.
Last but not least, when the FIT scheme has expired, there should be an alternative incentive mechanism to continue stimulating various generations. Developing the mechanism requires dialogue involving different stakeholders, especially enterprises. It minimizes risks for investors, which results in reducing energy costs for everyone, for example, compensating for curtailment or providing guaranteed loans.
The Danish expert highlighted the fundamental role of transmission in the green transition. Expanding and reinforcing the transmission system would ensure the renewable energy supply in the South is transmitted to concentrated industrial parks in the North, like Hanoi and Hai Phong. Another measure is to build up some renewable energy centers near those high-consumed places. However, renewable resources in the North, wind and solar power, for instance, are not as good as in the South. Hence, the first solution is more cost-effective.
The Danish expert also mentioned that the advanced modeling used to design different energy development scenarios introduced in EOR21 allows close-reality results. The purpose is to understand the optimized expansion of the power system and cost-effective methods toward the net-zero target.