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Higlighting the downside of thermal power

Released at: 11:11, 01/02/2018

Higlighting the downside of thermal power

Vinh Tan power plan- Binh Thuan province

Regular citizens have joined with activists in signing a petition and spreading the word about the damaging effects of pollution from thermal power plants.

by Mai Hoang

Thao lives in Tan An, the capital of the Mekong Delta’s Long An province, 37 km from the proposed construction site of Long An-I, a 1,320 MW coal-fired power plant to be completed around 2020 and put into use in 2024. Though he has never lived near thermal power plants, he reads online articles about their environmental impact and is familiar with recent headline-making environmental disasters, including pollution from the Vinh Tan power plant in south-central Binh Thuan province. Like 15,166 others, Thao signed up with Stop Long An, an electronic petition on wakeitup.net started by an anonymous group of climate activists intent upon preventing the execution of the project and its 1,600 MW follow-up, Long An-II.

Stop Long An was the first anti-coal campaign to garner such strong support in Vietnam. In an inspirational display of civic engagement, signatories from Long An, neighboring Ho Chi Minh City, and elsewhere around the country rallied to express their opposition.

“I don’t understand,” Thao declared. His voice sounded muffled through the phone, but the frustration was unmistakable. “The world is talking about phasing out coal. Vietnam is talking about buying more.”

Hai Cao was similarly upset. “When it goes into operation, given the poor regulation, Long An-I will emit such a level of pollution that health issues like skin disorders and lung diseases will be inevitable. We have seen this happen before,” he said. He also worried about the effects of the plant’s toxic discharges on the surrounding land and water system, citing heavy metal poisoning and its impact on the food chain as his main concern. “It will destroy the rivers that serve as our source of water and food,” he cried. “Let me and my children have a chance to live.”

For signatory Suong Thi Vo, who lives in the vicinity of Vinh Tan, it was about preventing another environmental disaster from happening to her compatriots in other provinces. “Half of the people in this area have to cope with lung disease and rhinitis,” he declared. “This cannot happen again and I am not going to be silent.”

Stop Long An began in May last year and achieved 101 per cent of its 15,000-signature goal within two months. With the hashtags #StopLongAn and #kyvisongcon (sign for life), the petition was posted alongside a host of videos and articles from local NGOs Change.vn, GreenID, and 350.org, as well as coverage of past environmental disasters caused by power stations in Binh Thuan and Hon Cau.

Tree Hugger, a local activist, led the group of climate lovers who created the online petition and also planned supporting media campaigns. “It was hard to get signatories during the first two weeks, because the State-owned media wasn’t reporting much on the planned power station. Not many people were informed,” Tree Hugger said. “It was not until we made public service announcements, posted footage from other coal-fired plants, and organized seminars and conferences that people started signing.” Tree Hugger and other campaign leaders also had to overcome criticism from individuals who questioned the validity of online petitions and saw it as another manifestation of “slacktivism”.

“Signing electronically has as much validity as signing on paper; you have to go through a host of security checks to make sure you’re an actual person,” Tree Hugger said. “The petition is on its way to Daewoo E&C, Korea Electric Power Organization (KEPCO), and Korea Exim Bank (KEXIM), the main investors in Long An-I.”

Tree Hugger also mentioned that online petitions spread more easily than paper ones because the people who want to sign them feel less vulnerable. These sentiments were echoed by signatory Hai Cao, who commented that most Vietnamese “are either negligent or too afraid.” Cao admitted that he himself would not dare to risk imprisonment and march on the streets, though he is willing to do all he can to express his concerns and spread the news online.

Aware of the people’s fears, Nhi Thoi, Program Manager at Change.vn, voiced her appreciation of social media platforms. However, as the movement gained more momentum on social media some mainstream journalists also contributed, aiming to connect with local scientists and verify the claims made by NGOs.

The problem also attracted media attention. As a reporter, Son Lam writes for the State-owned Tuoi Tre newspaper and felt it his duty to inform people about the power plant right from its early stages of construction. “Usually, people don’t express concern until a power plant is already in operation and actively polluting their environment and I want to change that,” he insisted. Journalists, he added, play an important role in relaying the people’s sentiments to government officials. “I have contacts in the Long An provincial government who are actually very sympathetic to the people’s concerns,” he said. “Unfortunately, it is not they who make the final decisions. The project is still in its first stage of development, with discussions between the government and the potential investors, though the Ministry of Industry and Trade (MoIT) has given its approval.”

Indefinite Halt

The official consulting body at Electricity of Vietnam (EVN), the State-owned power company, has put the project on hold, according to Phuong Truong Luu from the Power Engineering Consulting Company 3 (EVNPECC3). “We are coming up with better solutions,” Luu said, while declining to go into more detail.

Coverage on Long An-I in the national media ceased in July last year. Tree Hugger suspected that this was done to “draw people’s attention away from the power station.” Less transparency regarding ongoing projects would mean more freedom for EVN to go forward with their plans without fear of opposition from the people.

But, Tree Hugger acknowledged, the indefinite halt to the project is a positive sign. “Government officials do have a media presence, they must have seen the online petition and are now wary of inciting social unrest,” the activist said.

Meanwhile, Thoi attributed this new development to pressure groups in South Korea pushing for KEXIM, Daewoo, and KEPCO to divest from environmentally-damaging projects in other countries. As EVN only has enough capital to fund one-quarter of its projects, foreign investors are truly the forces driving the coal sector’s development forward. “The industrialized Asian countries - Japan, South Korea and now China - wanted to go sustainable but didn’t have any moral qualms when it came to funding coal-powered plants in developing countries and reaping the benefits,” Thoi explained. “Vietnam was only too eager to buy cheap energy.”

Since KEPCO and the Japanese conglomerate Marubeni won the first international tender project in Vietnam for a large-scale coal-fired station in 2008, EVN has increasingly relied on build-transfer-operate (BOT) projects and other independent power producers to finance Vietnam’s skyrocketing power demand, assuming the country has reached its hydroelectric limits, while diesel, nuclear and, of course, renewable energy are all too expensive. According to the Power Master Plan VII revised for 2016-2020 with a vision to 2030, 22,000 MW of Vietnam’s 90,000 MW of electricity will come from 16 new BOT power projects.

Leading the list of foreign investors is South Korea, with registered investments of $55.6 billion, while Japan comes in second at $45.9 billion. Their motives are simple: 51 per cent of all such foreign investments flow to Vietnam not from export-import banks with a vested interest in enriching themselves but instead providing low-interest, long-term loans to entities in other, usually less developed countries, to be used for purchasing power. As outlined in “Carbon Trap: How International Coal Finance Undermines the Paris Agreement”, a recent report by the Natural Resources Defense Council, Vietnam is among the top three recipients of coal project financing by G20 members Japan, China, and South Korea.

Market Forces vs. Central Planning

Globally, the divestment movement has gained momentum, as commercial banks including Bank of America, Citigroup, Natixis, and Wells Fargo strive to eliminate coal from their financial profiles due to a fear of stranded assets, which cost more to build than they would later generate in revenues.

Coal power plants have a great risk of becoming stranded assets in the event of inaccurate forecasts by the government, which can lead to excess capacity, or simply when externalities such as environmental damage and health impacts are taken into consideration. This concept is not too difficult for wary private investors to grasp; the real challenge is to change the policies of public-financed banks like KEXIM and JCIB, who are too content to claim the profit margin from contracts for construction, equipment and technology, while recipient governments take care of the environmental and social ramifications when such arise.

As power demand is forecast to triple during the Power Master Plan VII period, a parallel concern Thoi also highlighted was energy insecurity. Despite the fact that, by 2020, 42.7 per cent of national energy supply will be provided by coal-fired power plants, Vietnam is steadily exhausting its own supply of coal to run these stations. Costs are also rising due to the transition from open pit to underground mining.

In 2016, Vietnam officially became a coal importer, and within three years roughly two-thirds of the 75 tons of coal required for its power plants will be imported from countries such as Indonesia, Australia, and Russia. “We should not rely so much on other countries for our energy supply,” Thoi said. “The government needs to take a firmer stance and look beyond low prices.”

Yet the argument that coal is economically beneficial is becoming moot, as prices in Asia rise due to China cutting down on mining and exporting while its own demand increases. According to the Institute for Energy Economics and Financial Analysis (IEEFA), Vietnam is losing roughly $1.27 billion per year because of rising coal import prices. The market price of thermal coal surged to $100 per ton in the last quarter of 2017; double the figure at the beginning of 2016. During the drafting of the Power Master Plan VII, coal was cheap because the government also subsidized domestic coal, lowering it by 40-50 per cent of the market price. It abolished this policy in July 2015.

Meanwhile, prices for one energy source are plummeting worldwide - solar energy. A recent report by GTM Research predicts a 27 per cent fall in project prices by 2022, and this is happening in all regions across the globe. In fact, India has been able to harvest solar energy at a price as low as 65 US cents per watt. Unlike fossil fuel, renewable energy sources are not concentrated in certain countries, and its usage would guarantee, for Vietnam, not only a greener environment but energy security for the years to come.

Call for Solar

The greater Mekong Delta region in general and Long An province in particular, ironically, have remarkably high levels of sunlight, totaling around 2,700 hours per year. The same local people who called for a stop to the coal-fired Long An-I’s construction are adamantly advocating for a switch to solar energy. “I think having small-scale solar projects in each district is the best solution,” Thao said. “Not only will this be beneficial for the environment, but because the energy generators are local, the cost for building them and transporting power will be significantly reduced.”

Van Thang Tran, a petition signatory from Ho Chi Minh City, agreed, saying that the government should assist scientists in their quest to improve solar panel technology and apply its applications. “Solar is the way of the future,” he remarked.

By virtue of their small scale, which average at around 50 to 100 MW, solar energy plants give local people much more control over managing their own supply and demand than coal-fired plants do. The State only mandates that projects over 1,000 MW be regulated by the central government. Solar energy projects, therefore, could be managed by city or provincial governing bodies or even individual citizens. Many prefer this over obtaining energy from EVN’s large-scale plants, whose sources, locations, and operating schedules are firmly under the purview of centralized planning.

“Mini grids and home systems can be managed easily. The smaller the systems, the simpler it is,” said Nguyen Long Hai, the Renewable Energy Research Officer at Green Innovation and Development (GreenID), Vietnam’s leading NGO in sustainable energy development. GreenID has recently released a manual for Local Energy Planning and organized conferences in the central highlands province of Dak Lak and the Mekong Delta’s An Giang province, two pioneers in solar energy development. 

The switch to solar energy could also solve another problem in Vietnam - powerline coverage. Currently, at least 5,000 people in the most remote villages in Vietnam have never set eyes on a shining light bulb, as despite the government’s efforts, transmission lines do not yet reach many mountainous areas in the country.

Thanks to a program piloted by Change.vn, in collaboration with private donors HSBC, Walmart, and Vu Phong Solar, Vietnam’s pioneering solar panel supplier, villagers in hamlet 4 of Vinh Cuu village in southern Dong Nai province finally obtained a stable energy supply for lights, fans, and other household appliances. The program sponsored solar panels for all households as well as solar column lights on the roads and in public spaces. Thoi recalled her experience in the hamlet. “For the first time, you see children being able to go out at night and visit each other’s homes,” she said. “It was very touching.”

Households with solar panels do not have to pay monthly electricity bills as they are disconnected from the national power grid, and will gain economically in less than five years. However, without sponsorship from organizations like Change.vn, the VND20 million (about $1000) initial investment is a barrier not only for poor villagers but also the average Vietnamese worker. “EVN needs to subsidize these projects, rather than spend money on wasteful, polluting coal-fired plants,” Thoi said. “Solar energy should be accessible to everyone.” She brought up feed-in tariffs as another solution - having policies that guarantee long-term contracts to producers would encourage investments in the solar energy sector, while ensuring that the power generated would be sold at a low per-KW price.

There are still few indications that the government is willing to go down this path. Renewable energy only accounts for around 0.5 per cent of Vietnam’s current power supply, and the Power Master Plan VII aims to raise the figure to a mere 6 per cent by 2030.

Remaining Challenges

GreenID’s Coal Research Officer Nguyen Thi Hang continues to advocate for an overhaul of the central plan. “BOT contracts are valid for 20 years, while we predict that prices for renewables will be more competitive than coal in three to five years,” she said, and stressed that under the status quo, Vietnamese citizens will soon have to pay for dirtier, more expensive energy.

For GreenID, Change.vn, Tree Hugger and other climate lovers in Vietnam, there are still many hurdles to overcome. Even Stop Long An’s relative success represents an isolated incident made possible by the plant’s proximity to Ho Chi Minh City - an urban center with 9 million citizens who possess more political capital than villagers in rural areas, rather than a harbinger of meaningful policy change. Reading the comment session on wakeitup.net, it is clear that a few signatories signed the petition not out of support for a coal phase-out, but rather a desire to see the proposed power plant relocated somewhere else far from their home.

Tree Hugger seemed hesitant when asked about the success of Stop Long An. “It was the best we could do given the circumstances,” the activist said. “Does it really show that 15,166 people care? I don’t think so. A lot of those who are affected the most don’t have access to the internet, let alone social media.”

Hang hopes the policy reform she is advocating with GreenID convinces lawmakers to change their minds. But nothing is certain yet. “We will have to wait for the Power Master Plan VIII and see,” she said. This will not come out until 2021.

Meanwhile, Thao is anxious to see actual changes being made after participating in Stop Long An. “It is not enough to pay lip service to environmental preservation. If not now, when?” he declared. He wants to disconnect his house from the national power grid and go green, but on his salary the cost for solar panels is prohibitive.

“I can’t protest the proliferation of coal-fired power plants while running household appliances on thermal energy,” he said. “But there’s no way I can spend about $1,000 on solar panels. What am I to do?”

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