POLITBURO’S RESOLUTION

ON ORIENTATIONS OF STRATEGY FOR NATIONAL ENERGY DEVELOPMENT BY 2030 WITH A VISION TOWARDS 2045

I- CIRCUMSTANCES AND CAUSES

1. After 15 years of implementation of Conclusion No. 26-KL/TW dated October 24, 2003 by the 9th Politburo on strategy and planning for Vietnam’s electricity sector and 10 years of implementation of Resolution No. 18-NQ/T dated October 25, 2007 by the 10th Politburo on orientations of strategy for national energy development by 2020 with a vision towards 2050, the energy sector in general and the electricity sector in particular have achieved rapid growth in all subsectors and areas, closely followed the orientations and accomplished many objectives.

Provision of energy, especially basic electricity provision for socio-economic development, has gradually improved. The petrochemical industry has experienced great growth with high throughput and appearance of a number of large-scale petrochemical establishments. Many high-capacity coal mines have received investments; commercial coal throughput has increased; hydropower achieves fast growth while wind and solar energy got off to a good start. Construction of electricity supply infrastructure has earned great investments, which is of utmost importance to electricity security. The national power grids have reached almost every part of the country, including remote and isolated areas, borders and islands. Energy consumption has increased significantly while the energy consumption structure is shifting towards the industry sector. Economical and efficient use of energy is receiving more and more attention. The energy sector is operated based on the market mechanism with different types of ownership where state-owned enterprises take the leading role. The dynamic energy sector is contributing greatly to socio-economic development and national defense and security throughout the country.

2. However, Vietnam’s energy sector is encountering many difficulties. National energy security faces substantial challenges; domestic supply falls short of demand; the need for energy import increases rapidly; many electricity projects are behind schedule; and a number of energy security parameters are turning negative. A number of problems in energy management and use persist. Energy efficiency remains low. Energy infrastructure is insufficient and unsynchronized. Certain aspects of technological capacity are inadequate while localization and market support from energy projects for domestically manufactured products of mechanical engineering are in difficulties. Quality of workers and productivity of some areas are low. The competitive energy market grows inconsistently while lacking connection between subsectors and between electricity generation and transmission; energy pricing policies remain unsuitable to the market mechanism and not separated from social security policies. A number of state-invested energy projects suffer loss while outward investment faces the risk of losing capital. Environmental protection in the energy sector is often neglected, leading to social disapproval.

3. There are multiple causes behind the abovementioned difficulties and problems but subjective causes take the center stage. There are a lack of perception and attention concerning the roles, position and importance of the energy sector and national energy security; delay in theoretical and empirical conclusions of some matters of energy development; late resolution of problems involving energy development orientations and insufficient explanation on how the socialist-oriented market mechanism is applied to the energy sector. Regulations of laws on the energy sector in general and on each subsector in particular are limited, inconsistent and in conflict with international laws. Some policies and mechanisms are not suitable to the market mechanism and unable to promote building of the competitive energy market. Policies on investment in development and management of energy resources are inadequate and inconsistent. Scientific and technological policies for the energy sector require renovation. Some energy planning and strategies are not yet completed, appropriate to the current situation and available resources or connected with planning for local and sectorial socio-economic development. State management apparatus for the energy sector in general and the electricity sector in particular is unstable; task assignment and cooperation between regulatory bodies and local governments lack clarity and/or close connection in some cases. Research and forecasting are not yet satisfactory while direction and organization of implementation of energy policies and laws are lackluster.

II- DIRECTION VIEWPOINTS, OBJECTIVES AND VISIONS

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- National energy security is both a foundation and an important premise for socio-economic development. Prioritize fast and sustainable energy development in connection with environmental protection, national defense and security and social equality and progress, which shall be one major mission of industrialization and modernization.

- National energy development must be in line with the socialist-oriented market economy and international integration; facilitate establishment of a consistent, competitive and transparent energy market with diverse types of ownership and businesses; and apply market-based pricing to all types of energy. Encourage and enable all types of ownership, especially private ownership, to participate in energy development; and effectively eliminate subsidization, monopoly, unfair competition and lack of transparency in the energy sector.

- Generate synchronized and suitable growth, diversify types of energy; prioritize utilization of renewable energy, new energy and clean energy; extract and use domestic fossil fuels reasonably, focusing on stabilization, regulation and required national energy reserves; prioritize LNG, formulate a roadmap to suitable reduction of coal-fired power; and actively import fuels for power plants. Optimize distribution from the national power system to all areas based on the comparative advantages of each locality.

- Focus on studying and applying achievements from the fourth industrial revolution to development of all energy subsectors and areas; boost digital transformation in the energy sector; and gradually grasp modern technology and strive for self-production of most energy equipment.

- Economical and efficient use of energy and environmental protection are the national policy and responsibility of the whole society. Enhance energy audit; formulate consistent policies and mechanisms and strict and feasible sanctions to encourage investment in and use of energy-efficient and eco-friendly technologies and equipment, contributing to productivity improvement and renovation of growth models.

2. Objectives

a) General objectives

Ensure national energy security; provide stable and high-quality energy at a reasonable price to facilitate sustainable socio-economic development, ensure national defense and security, improve living standards and contribute to environmental protection. Ensure harmonious development among energy subsectors with synchronized and smart infrastructure of ASEAN standards. Establish a competitive, transparent and efficient energy market in line with the socialist-oriented market economy. Utilize domestic energy resources in combination with reasonable energy import and export; and use energy economically and efficiently. Proactively produce a number of key equipment for energy subsectors; and upgrade and build modern transmission and distribution grids.

b) Some specific objectives

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- Share of renewable energy in total primary energy supply reaches approximately 15 - 20% in 2030 and 25 - 30% in 2045.

- Total end use energy consumption reaches 105 - 115 million toe by 2030 and 160 - 190 million toe by 2045. Primary energy intensity reaches 420 - 460 kgOE/USD 1,000 GDP and 375 - 410 kgOE/USD 1.000 GDP by 2045.

- Build smart, efficient and interregional systems of electrical grids; ensure electrical safety, compliance with the N-1 criterion in extremely important load zones and with the N-2 criterion in important load zones. By 2030, reach top 4 of quality of electricity supply in ASEAN and rank among top 3 on ASEAN electricity access index.

- Refineries meet at least 70% of domestic demand; ensure strategic oil reserve reaches at least 90 days of net imports. Be capable of importing approximately 8 billion m³ of LNG by 2030 and 15 billion m³ of LNG by 2045.

- Ratio of energy savings to total end use energy consumption gains approximately 7% by 2030 and 14% by 2045 compared to normal development scenario.

- Reduce energy-related greenhouse gas emission by 15% by 2030 and 20% by 2045 compared to normal development scenario.

3. Vision towards 2045: Ensure national energy security; establish the competitive and transparent energy market in line with the socialist-oriented market economy and in a synchronized manner; ensure adaptation to climate change, environmental protection, efficient use of resources and sustainable development of energy subsectors; develop a system of synchronized and modern energy infrastructure with enhanced regional and international connectivity; and achieve the workforce quality, scientific - technological capacity and energy sector management capacity of a modern and industrialized country.

III- MAIN TASKS AND SOLUTIONS

1. Development of primary energy sources towards autonomy, diversification, efficiency, reliability and sustainability

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- Regarding coal: draw up new strategies for development of the coal sector in connection with long-term coal import and effective outward investment. Build coal reserves based on production, especially electricity production. Further explore and evaluate deposits and resources and heighten performance of this task. Boost domestic coal mining in a safe, effective and economical manner; urgently conduct technological research to tap into Red River Delta coal field; and enhance recovery of clean coal from pits. Promptly build large-scale coal bins and transshipment ports; and enhance automation and modernization of mining equipment. Review and assess demand, develop plans and optimize solutions for stable coal supply for electricity production as appropriate to the market mechanism.

- Regarding renewable energy: devise breakthrough policies and mechanisms to encourage robust development of renewable energy sources, which will provide alternatives to fossil fuels. Prioritize wind and solar energy for electricity generation; encourage investment in construction of power plants converting urban waste, biomass and solid waste into power in connection with environmental protection and development of the circular economy. Establish and develop a number of renewable energy centers in suitable regions. Promptly study and perform overall evaluations of the potential for geothermal energy and energy from waves, tides and sea currents, and formulate orientations of development of these types of energy; implement a number of application models and perform pilot extraction to evaluate the efficiency. Conduct technological research, develop a number of pilot production projects and encourage use of hydropower following the global trend.

- Regarding other types of energy: promptly grasp relevant information to study and develop other types of energy based on availability of scientific - technological advances, workforce, financial capacity and other necessary factors.

2. Fast and sustainable development of electricity sector, meeting industrialization and modernization requirements

- Formulate and implement a strategy for development of Vietnam’s electricity sector for the new period. Develop sources of electricity generation in a quick and sustainable manner with reasonable structure and distribution, which shall ensure safety, reliability and stability and focus on diversification, available capacity enhancement and suitable contingency capacity, so as to meet environmental protection requirements.

Regarding hydroelectricity: mobilize all available hydroelectricity sources. Develop hydropower plants selectively with the addition of small and medium hydropower plants and pumped-storage plants. Formulate strategies for cooperation in hydroelectricity development in connection with long-term electricity import.

Regarding wind energy and solar energy: prioritize development appropriate to system safety capacity with reasonable price. Encourage development of rooftop and floating solar panels. Formulate assistance policies and breakthrough mechanisms for development of offshore wind energy in connection with implementation of Vietnam’s marine strategy.

Regarding thermal energy: encourage thermal energy projects that are synchronized in terms of fuel storage and supply and construction of power plants based on electricity price, which shall be determined via bidding. Prioritize domestic gas sources for gas-fired power generation. Focus on use of LNG for gas-fired power generation to enhance the role of gas-fired power and regulate the power system.

Facilitate coal power generation in a suitable manner, prioritizing high-capacity and high-performing generating units to which supercritical technology or higher is applied; ensure strict compliance with laws on environmental safety and international standards. Thoroughly review and formulate plans for technological upgrade for coal power plants to meet environmental protection requirements; and be determined in shutting down plants that refuse to upgrade their technologies in accordance with regulations.

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- Invest in modernization of the electricity subsector from generation, transmission to distribution to meet demands of the electricity market and facilitate large-scale renewable energy integration; improve electrical grid security and electricity service quality. Actively launch programs for demand side management; manage electricity consumption properly; minimize power loss; and complete incentive policies and mechanisms for electricity storage. Modernize electricity regulatory systems, gradually apply smart and automatic technical supervisory technology; study and implement ultra-high-voltage electricity transmission and direct current transmission.

- Study and complete financial and capital enhancing mechanisms, especially for the electricity sector. Review and amend regulations on control and regulation of the electricity market. Provide mechanisms for development of on-site power plants in industrial parks/clusters, export-processing zones, etc.

- Appropriately accelerate the roadmap to the competitive electricity market, and implementation of direct power purchase agreements between producers and consumers and energy auction/bidding mechanisms, especially for new and renewable energy projects; and ensure transparency of electricity price. Draw up incentive mechanisms to encourage private investment in the national electricity transmission system. Operate the national electricity transmission system under the control of the State.

3. Restructuring of energy-intensive industries concurrent with implementation of policies on economical and efficient use of clean energy

- Restructure energy-intensive industries, especially foreign investments, to lower energy intensity. Formulate incentive policies to facilitate growth of less energy-intensive industries that have socio-economic impacts.

- Review and adjust energy distribution in a flexible and dispersed manner, avoid excessive distribution to certain localities in closed connection with redistributing industrial and urban space throughout the country and in each region and locality.

- Review and complete the national program for economical and efficient use of energy for the 2020 - 2030 period. Apply mandatory standards and regulations in combination with sanctions concerning efficient use of energy for energy-intensive industries and products. Provide incentive policies for households using clean and renewable energy, especially for industrial and transport activities; and promote use of electric vehicles following the global trend.

4. Development of sustainable energy infrastructure and regional connection; enhancement of internal resources of manufacturing industry and services supporting energy sector

- Provide priority policies for sustainable energy infrastructure development; focus on building of infrastructure for energy import and export and regional connection. Draw up list of shared energy infrastructure and formulate mechanisms for such sharing as appropriate to the market mechanism. Remove all unreasonable barriers and monopolies in use of energy infrastructure services and facilities; provide policies and mechanisms for establishment of non-state electricity transmission systems. Maximize privatization of investment in and use of energy services and facilities, including the national electricity transmission system, without compromising national defense and security.

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- Formulate incentive policies and mechanisms and facilitate development of manufacturing industries and services that support the energy industry in a manner that enhances internal resources and aims for export; prioritizes development of electrical/petroleum equipment manufacturing and petroleum services. Complete legal frameworks while facilitating application of the energy service company model.    Urgently develop and implement incentive policies and mechanisms to increase localization rate of the energy sector, ensuring fulfillment of specific requirements for localization rate of power plants in particular and energy projects in general. Complete policies on placement of orders from the State to encourage domestic enterprises to perform complicated and high-tech energy projects and works of international standards.

5. Restructuring, renovation and improvement of state-owned energy enterprises; incentives for energy privatization

- Restructure state-owned energy enterprises in a comprehensive manner, with a focus on key and strong areas; separate business from state management; apply advanced management models and practices, improve Vietnam’s credit rating and ensure complete operational transparency; and focus on improvement of use of national energy infrastructure.  Complete regulations on resource and asset assessment in consistent with international practices and actual circumstances; thoroughly handle and restructure state-owned energy enterprises and projects that perform poorly or suffer loss. Study and carry out fixed-term selling or long-term leasing of power plants, fuel warehouses, oil refineries, etc. of state-owned enterprises.

- Review and amend specific policies and mechanisms for a number of important energy projects, especially urgent electricity projects; ensure adequate capital for state-owned energy enterprises to accomplish strategic objectives and missions connected with national defense and security.

- Create a favorable and transparent environment; publish planning for and lists of investment projects, remove barriers to encourage privatization of domestic and foreign energy projects, and focus on electricity projects and electricity wholesale and retail in accordance with the market mechanism. Continue to attract large-scale, quality and effective foreign investment in the energy sector. Accelerate equitization of state-owned electricity enterprises; formulate flexible investment mechanisms and carry out administrative reform to ensure electrical works stay on schedule.

6. Renovation of policies and mechanisms and development of synchronized, connected, modern, efficient and socialist-oriented energy market

- Develop the energy market in a manner that ensures synchronization and connection between electricity, coal, gas and oil and renewable energy in order to connect with regional and global markets. Remove all barriers to ensure energy price is transparent and decided by the market; do not cross-subsidize electricity price between customer groups or between regions; the State shall regulate as appropriate via market instruments (taxes, fees, funds, etc.) and suitable social security policies. Complete market instruments, policies and mechanisms of service to the market to facilitate economical and efficient use of energy.

- Review and amend policies on land, compensation for land expropriation, use of water surface and prevention of speculation, profiteering and advocacy groups in the energy sector. Renovate financial policies in a manner that attracts private investment; and facilitate energy PPP projects. Implement credit policies in a flexible and efficient manner to enable energy enterprises to access funding sources, especially enterprises with green energy projects. Complete tax policies that facilitate production and use of clean and renewable energy. Formulate legal grounds for establishment and efficient use of private funds for sustainable energy development and enhancement of economical and efficient use of energy in a manner that ensures financial independence from revenues and expenditures of state budget and reduces operating expenses of enterprises and business establishments. Complete and implement policies on standards for renewable energy share in energy investment and production.

- Amend specialized laws on oil and gas, electricity and economical and efficient use of energy and other energy-related laws to provide the basis for better implementation of the market mechanism. Study and initiate legislation on regulation of electricity price and a number of incentives for investment in energy projects. Complete legal frameworks for electricity control and regulation. Study, formulate and promulgate laws on renewable energy.

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7. Scientific - technological development and high-quality workforce training for energy sector

- Establish mechanisms for connection between scientific - technological developers and researchers and energy enterprises and training institutions via technological and scientific programs; incorporate research and development into energy development strategies, planning and plans. Draw up incentive mechanisms for energy enterprises to further invest in research and development and establishment of energy renovation centers. Continue to launch national key scientific and technological programs for energy technological research, application and development for the 2021 - 2030 period, with a focus on energy equipment manufacturing, application of new types of energy, renewable energy and smart energy and energy saving.

- Review and amend national energy standards and regulations in line with international standards and regulations while taking into account the national standards and regulations related to recycling and use of waste from energy production. Gradually implement incentive and mandatory measures for renovation of energy technology and equipment as well as energy-intensive industries.

- Formulate comprehensive human resources development policies and training programs for key phases of the energy sector. Enhance training of technicians and professional workers to meet domestic demands and aim for import. Employ trained nuclear workers effectively and further enhance their capacity. 

8. Promotion of international cooperation; proactive and active establishment of strategic partnership for long-term energy import and outward investment in energy resources

- Adopt flexible, efficient, fair and mutually beneficial foreign energy policies. Expand and strengthen energy cooperation with strategic and important partners. Enhance international relations in terms of energy in all subsectors as appropriate to integration trends and utilize opportunities arising from political - foreign relations and trade agreements for energy development.

- Urgently formulate strategies for long-term energy import while encouraging outward energy investment and use of foreign resources of energy to ensure national energy security; provide mechanisms for outward energy investment for Vietnam’s enterprises, which shall first begin with electricity projects in neighboring countries to facilitate electricity import. Promote partnerships with advanced energy technology/energy investing companies.

- Actively participate in energy cooperation with Greater Mekong Subregion and ASEAN; connect electrical grids, complete mechanisms for electricity trade with China, Laos and Cambodia. Continue to conduct research on a regional gas connection system and adopt this system when possible.

9. Implementation of policies on environmental protection for energy sector in connection with reduction of greenhouse gas emission, promotion of circular economy and sustainable development

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- Complete the policy framework, formulate and amend national regulations and standards concerning exhaust gas and waste from the energy sector in line with standards from developing countries. Amend regulations on screening of investment projects based on environmental risks. Develop financial regulations concerning the environment and ensure sufficient calculation of all socio-environmental costs in investment and prime costs. Enhance prevention and control of entities posing high risks of environmental pollution; strictly handle violations against regulations on environmental safety as per the law. Promptly provide adequate information on environmental protection in the energy sector. 

- Formulate and implement a scheme for integration of the circular economy into strategies for development of energy enterprises. Develop a system for advanced management and treatment of waste in the energy industry suitable to Vietnam’s situation; and ensure capacity of energy enterprises for self-treatment of waste sources. Provide incentive policies and mechanisms for development of the environmental industry in connection with the energy sector.

- Review and amend contents related to the energy sector in the national strategy for climate change, national strategy for green growth, strategy for Vietnam's sustainable development, Vietnam's marine strategy and other relevant strategies.

10. Enhancement of leadership of the Communist Party, state management capacity and efficiency, people’s ownership and roles of Vietnamese Fatherland Front and socio-political organizations in development of energy sector

- Raise the awareness of Party Executive Committees, the whole political system and people towards the roles, position and importance of the energy sector. Party Executive Committees as well as central and local governments must regard national energy development as a crucial and continuous mission and seriously direct and organize such development. Formulate legal frameworks and mechanisms to ensure compliance with planning for national energy development. Strictly handle investment projects launched late and affecting national energy security.

- Review and complete the state management model for the energy sector. Clarify responsibilities, powers and cooperation mechanisms between central and local levels and between state authorities in energy development. Further disseminate legislative documents and raise awareness towards strict compliance with regulations of laws on energy. Provide orientations and formulate policies in connection with inspection, supervision and assistance for implementation.

- Enhance people’s ownership and participation of Vietnamese Fatherland Front, socio-political and socio-professional organizations and entities affected by policies in formulation and supervision of implementation of national energy development strategies, planning and policies.

IV- IMPLEMENTATION

1. Party Executive Committees of provinces and cities, Party Central Committee’s Commission, Party Civil Affairs Committees, supervisory communist organizations and Party Executive Committees under Party Central Committee shall enable officials and members of the Communist Party to fully grasp this Resolution and formulate Resolution implementation plans and programs.

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3. The Government’s Party Civil Affairs Committee shall direct formulation and implementation of the national energy development strategy and strategies for development of energy subsectors, comprehensive national energy planning and national electricity development planning in this Resolution's spirit; prioritize resources for performance of the tasks stated in this Resolution; urgently fulfill international commitments on research in and application of nuclear energy for peaceful use; promptly summarize reviews of the Electricity Law and relevant laws to propose amendments that address existing problems, especially those concerning electricity transmission and planning, to the National Assembly.

4. Vietnamese Fatherland Front and socio-political organizations shall develop programs and plans for supervision of this Resolution’s implementation.

5. Central Propaganda and Training Commission shall take charge and cooperate with Central Economic Commission and relevant regulatory bodies in providing guidelines for complete understanding and implementation of this Resolution.

6. The Central Economic Commission shall take charge and cooperate with relevant regulatory bodies in regularly supervising, inspecting and expediting implementation of this Resolution; and periodically submit preliminary and summary reports on such implementation to the Politburo and Secretariat of the Communist Party.

ON BEHALF OF THE POLITBURO
THE GENERAL SECRETARY




Nguyen Phu Trong