Vietnam’s Coal Development - Time for A Change

“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.” 

Thao lives in Tan An, Long An, thirty-seven kilometers away from the proposed construction site of Long An - I, a 1320MW coal-fired power plant to be completed around 2020 and put into use in 2024. Although he has never resided near thermal power stations, he reads online articles about their environmental impact and is familiar with recent headline-making environmental disasters, including the Vinh Tan power plant’s pollution in Binh Thuan province. Like 15,166 others, Thao signed onto Stop Long An, an electronic petition on wakeitup.net started by an anonymous group of climate activists intent upon preventing the execution of this project and its 1600MW follow-up, Long An-II. 

Stop Long An was the first anti-coal campaign to garner such strong support in Vietnam, a Communist state with iron grips on freedom of speech. In an inspirational display of civic engagement, signatories from Long An, the neighboring Ho Chi Minh city and other places around the nation rallied to express their opposition. 

“I am very upset,” said Hai Cao, a local of Ho Chi Minh. “When it goes into operation, given the poor regulation, Long An-I will emit such pollution that health issues like skin disorders and lung diseases will be inevitable. We have seen this happening before.” Cao 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 fellow compatriots in other provinces. “The big corporations partner with the government, and we people in Tuy Phong, Binh Thuan have to suffer [...] Lung disease, rhinitis, sinusitis affect 50 percent of the population. This cannot happen again. I am not going to be silent,” Vo declared.

If Long An - I gets built in Can Giuoc, Long An, it will affect one million people living in the vicinity as well as districts one, seven, eight and Nha Be of Ho Chi Minh city, the most populous hub of economic activity in Vietnam. 

Stop Long An started in May 2017 and achieved 101 percent of its 15,000-signature goal within two months; with the hashtag #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, Stop Long An, and also planned for 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 were informed,” they shared. “It was not until we made public service announcements, post footages from other coal-fired plants, 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,” they said. “The petition is on its way to Daewoo E&C, Korea Electric Power Organization (KEPCO) and Korea Exim Bank (KEXIM), the main investors of Long An-I.” 

The campaigners harnessed this method of activism to protect their anonymity. “We have seen people who march on the streets and hold up signs. We all know what happened to them,” Tree Hugger said, referring to the government’s recent crackdown on peaceful protests in the wake of Formosa’s toxic spill scandal. Tree Hugger and their organization’s safety has previously been threatened by the state due to their involvement in campaigns against environmentally pernicious projects like Formosa and Vinh Tan power plant. Though they originally planned to send the Stop Long An petition to President Nguyen Xuan Phuc and Minister of Industry and Trade Tran Tuan Anh as well as the Korean investors, Tree Hugger backed down for fear of persecution. “Neither could we send it directly to the investors,” they said. “We had to call for the help of an NGO in Korea, because otherwise, it would still be relatively easy for [the government] to find out who we are.” 

 Tree Hugger further mentioned that online petitions spread more easily than paper ones because the people who want to sign them likewise 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 could to express his concerns and spread the news online. 

Aware of the people’s fear, Nhi Thoi, Program Manager at Change.vn, voiced her appreciation for social media platforms. “They are great for raising awareness,” Thoi said. “All of Vietnam’s mainstream news sources are closely supervised by the government. Only on independent websites could people express opposing viewpoints.” 

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. Son Lam writes for state-owned Tuoi Tre newspaper, covering events happening in Long An; as a reporter, Lam felt it his duty to inform people about the power plant right from its early stages of construction. “Usually, people do not express concern until a power plant is already in operation and actively polluting their environment. I want to change that.” According to him, journalists play an important role in relaying the people’s sentiments to government officials. “I have contacts in the Long An municipal government who are actually very sympathetic with the people’s concerns. Unfortunately, it is not they who make the final decisions,” Lam said. 

On a more positive note, he pointed out that the central government has announced an indefinite halt in the thermal plant’s construction since environmental concerns got brought up on the media. “The project is still in its first stage of development, that is, discussions between the government and potential investors; although the Ministry of Industry and Trade has granted their approval, Long An-I is far from construction.” Lam attributed this to a collective raising of consciousness surrounding the issue of coal power and pollution in general. 

According to Phuong Truong Luu from the Power Engineering Consulting Company 3 (EVNPECC3), the official consulting body of Electricity of Vietnam (EVN), the state-owned power company has  put this project on hold. “We are coming up with better solutions," Luu said, refusing to go into more detail. 

Coverage on Long An-I in the national media ceased starting from 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. 

Tree Hugger did admit, however, that the indefinite halt could be seen as a positive sign. “Government officials do have a media presence, they must have seen the petition online and are now wary of inciting social unrest,” they said. 

Meanwhile, Thoi from Change.vn attributed this new development to pressure groups in 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 fourth of its projects, foreign investors are truly the forces driving the coal sector’s development forward. “The industrialized Asian countries - Japan, Korea and now China - they wanted to go sustainable, but didn’t have any moral qualms when it came to funding coal-powered plants in developing nations and reaping the benefits,” Thoi explained. “Vietnam, meanwhile, 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 (BOTs) and other independent power producers to finance Vietnam’s skyrocketing power demands, assuming that Vietnam 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 of Vietnam’s 90,000MW of electricity will come from sixteen new BOT power projects. 

Leading the list of foreign investors is Korea, with registered investments of USD55.6 billion, while Japan comes in second at USD45.9 billion. Their motives are simple - 51 percent of all such foreign investments flow to Vietnam not from export-import banks with vested interest in enriching themselves while 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. 

Realizing this, Change has recently partnered with Market Forces and Friends of the Earth, organizations that campaign for international banks to divest from fossil fuel. “It’s taxing work [...] We have to target tens of investors before one agrees to stop or even reconsider their projects,” she said.  

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 fear of stranded assets, which cost more to build than they would later generate in revenues. Coal power plants have great risks of becoming stranded assets in the event of inaccurate forecasts by the government, which 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 demands are forecasted to triple during the Power Master Plan 7 period however, a parallel concern that Thoi also highlighted was energy insecurity. Despite the fact that by 2020,  42.7 percent of the national energy supply will be accounted for 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, we officially became a coal importer, and within three years roughly two thirds of the 75 tons of coal required for our power plants will be imported from other 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 increasing its demands. According to the Institute for Energy Economics and Financial Analysis (IEEFA), Vietnam is losing roughly USD1.27 billion per year because of rising coal import prices. The market price of thermal coal surged to 100 dollars per ton in the last quarter of 2017,  double the figure in the beginning of 2016; during the drafting of the Power Master Plan 7, coal was cheap because the government also subsidized domestic coal, lowering it 40-50 percent beneath the market price. They abolished this policy July 2015. 

Meanwhile, the prices for one energy source are plummeting worldwide - solar energy. A recent report by GTM Research predicts a 27 percent drop 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 cents per watts. 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. 

The greater Mekong Delta region in general and Long An in particular is, ironically, one with remarkably high levels of sunlight, totalling at around 2700 hours per year; the very same locals who called for a stop to the coal-fired Long An - I’s construction are adamantly advocating also 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,” Tran remarked. 

By virtue of their small scale, solar energy plants, which average at around 50 to 100MW,  give locals much more control on managing their own supply and demand than coal-fired plants do. The state only mandates that projects over 1000MW be regulated by the central government. Solar energy projects, therefore, could be managed by municipal governing bodies or even individual citizens themselves; 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,” said Hai Long Nguyen, the Renewable Energy Research Officer at Green Innovation and Development (GreenID), Vietnam’s leading NGO in sustainable energy sector development. GreenID has recently released a manual for Local Energy Planning and organized conferences in Dak Lak and An Giang, two pioneering provinces for solar energy development in the Mekong Delta region.  

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

Thanks to a program piloted by Change, in collaboration with private donors HSBC, Walmart and Vu Phong Solar, Vietnam’s pioneering solar panel supplier, villagers in hamlet 4 of Vinh Cuu, Dong Nai 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 fees as they are disconnected from the national power lines, and will gain economically in less than five years. However, without the sponsorship from organizations like Change the 20 million VND (1000 USD) initial investment proves to be a barrier not only for poor villagers, but the average Vietnamese laborer. “EVN needs to subsidize these projects, rather than spend money on wasteful, polluting coal-fired plants,” Thoi commented. “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. 

For now, there are yet few indications that the government is willing to go down this path. Renewable energy only accounts for around 0.5 percent of Vietnam’s current power supply, and the Power Master Plan 7 aims to raise the figure to a mere six percent in 2030. 

GreenID’s Coal Research Officer Hang Thi Nguyen continues to advocate for an overhaul of the central plan. “BOT contracts are valid for twenty years, while we predict that prices for renewables will be more competitive than coal in 3 to 5 years,” she said, and stressed that in the status quo Vietnamese citizens will soon have to pay for dirtier, more expensive energy. 

Yet for GreenID, Change.vn, Tree Hugger and 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 unfortuitous proximity to Ho Chi Minh - an urban center with nine 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, 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 their opinion on the success of Stop Long An.  “It was the best we could do given the circumstances,” they said. “Does it really show that 15, 166 people cared? I don’t think so. A lot of those who are affected the worst, they don’t have access to the internet, let alone social media.” 

Nguyen hopes that the policy reform she is advocating with GreenID convinces lawmakers to change their mind. However, nothing is certain yet. “We will have to wait for the Power Master Plan 8 and see,” she said. This will not come out until 2021. 

Meanwhile, Hue 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, then when?” he declared. Thao wished to disconnect his house from the national power grid and go green; with his worker’s pay, however, the investment cost of a solar panel is prohibiting. 

“I cannot protest the proliferation of coal-fired power plants while running household appliances on thermal energy. But there’s no way that I can spend 20 million dong on a solar panel,” Thao brooded. “What am I to do?”