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Electricity/Power Grid ,
Energy Efficiency

19 December 2018

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ASEAN

Asean’s rapid urbanisation has implications for important issues such as strained infrastructure, rising inequalities, and public safety and security. However, if Asean makes full use of technology by bringing its smart cities together, a vision of sustainable and liveable cities across the region will become achievable, writes Phidel Vineles.

Asean’s demographic and economic growth has led to rapid urbanisation. According to a report by Centre for Liveable Cities in Singapore, an additional 90 million people are expected to move to cities across the region by 2030. In fact, the largest growth is expected in medium-sized cities of between 200,000 and two million populations, and these cities are projected to drive 40 percent of the region’s growth.

Against this backdrop, it is important for Asean cities to adopt “smart” technologies to address the challenges in urban development such as traffic congestion, pollution, and strained infrastructure. With the establishment of the Asean Smart Cities Network (ASCN), which is an initiative of Singapore for the 2018 Asean Chairmanship, it gives Asean member states a leeway to adopt cities-level mechanism for achieving a vision of sustainable and liveable cities.

ASCN has 26 pilot cities from the 10 Asean member states. It is a collaborative platform where these cities across the region would work together towards the goal of smart and sustainable urban development. To have a good representation, each Asean member state nominates a national representative to the network, and each city nominates a chief smart city officer.

Through this, it allows a representation both at the national and municipal levels to facilitate cooperation on smart cities development.

To help ASCN achieve a sustainable urban development, the Asean Smart Cities Framework was developed to serve as a non-binding guide to facilitate smart city development in each ASCN city in the region. It consists of three strategic outcomes or objectives: competitive economy, sustainable environment, and high quality of life.

Smart cities help economies become competitive by leveraging innovation and entrepreneurship that will help generate business and job opportunities. They also promote sustainable environment by employing sustainable green technology and energy. Smart cities also enhance the well-being of people by applying innovative solutions, especially on key services such as education and services.

ASCN allows Asean to capitalise on new technologies for innovation. For example, there is an opportunity for Asean to develop and improve their infrastructure through technological innovations in urban planning. In Thailand, the government established the Phuket Smart City Vision, which aims to boost tourism using big data and analytics.

One of its projects is The City Data Platform, which is used to understand tourist behaviour in Phuket collected from Wi-Fi, Internet-of-Things (IoT), and social media. The data collected on popular locations that tourists visited as they connected to Wi-Fi is also used to ensure their safety.

A smart city initiative also helps promote the well-being of people. For example, Indonesia’s fifth largest city, Makassar, initiated its Smart City Plan in 2014 to create a people-centric and sustainable city. One of its programmes is the mobile health services, which is known as Dottoro’ta. Its services include diagnosis, emergency care, and follow-up care, which are available 24 hours every day.

Safety and security are also assured through smart city projects. In the Philippines, Davao City established its own Public Safety and Security Command Centre (PSSCC) to oversee activities related to safety and security. The PSSCC adopts technology capabilities such as CCTV surveillance system and Geographical Information System (GIS), which is used to analyse spatial information and edit data in maps.

It also raised the efficiency of innovative services through the adoption of smart technologies. Singapore’s Smart Nation Initiative (SNI) aims to provide an open and accessible national e-payment infrastructure to facilitate simple and seamless digital transactions. In fact, Singapore’s banking industry launched FAST (Fast and Secure Transfers) in 2014, which allows having a money transfer system between consumers and businesses across different banks.

Yet these opportunities will be harnessed successfully if challenges of implementing smart city initiatives are addressed. Since access to the Internet is required to fully benefit from digital technology, Asean member states should work together to address digital divide.

For example, Singapore sits atop the ranking on the Digital Adoption Index (2016), while other countries in the region are in a distant place – Malaysia (41st), Brunei (58th), Thailand (61st), Vietnam (91st), Philippines (101st), Indonesia (109th), Cambodia (123rd), Lao PDR (159th), and Myanmar (160th).

Other countries in Asean also experience the grip of high cost of adopting high-speed Internet. In Singapore, high-speed Internet cost is only at $0.05 per megabit per month, which is more affordable than in Thailand ($0.42), Indonesia ($1.39), Vietnam ($2.41), the Philippines ($2.69), and Malaysia ($3.16).

Insufficient digital talent base could also hold Asean back from harnessing the opportunities of digital economy. A report by Bain & Company (2018) said that 45 percent of SMEs in the region are lacking of understanding on digital technology although SMEs represent 99 percent of total enterprises in Asean.

Lack of trust and low consumer awareness could also hinder the uptake of digital services. In fact, around 89 percent of Malaysians and 79 percent of Indonesians are having concerns sharing their personal information online and through mobile devices, according to a survey by GSMA Intelligence.

Ultimately, the respective governments and legislatures must design and put in place the relevant legislations and rules to implement the ASCN. However, there are still some regulatory elements that restrict digital economy in the region. For example, Malaysia’s Personal Data Protection Act 2010, which was enforced in 2013, compels data users to seek approvals from its authorities before moving personal data out of Malaysia’s territories.

The government cannot build smart cities alone that is why it is important for them to partner with the private sector to deploy smart solutions technology on a bigger scale. Involving private sector helps create better solutions and value, whether it is in financing, planning experience, and technical expertise.

Developing public awareness on ASCN must be a top priority to disseminate the progress and key achievements of the initiative. Hence, there is a need for social media engagement so that the achievements of ASCN will be communicated on a bigger scale.

It is also important to have a highly coordinated government system like Singapore’s Smart Nation and Digital Government Office, which was established to develop and coordinate digital strategies across government agencies. This allows the country to have a proper coordination system with other institutions in designing digital and smart city roadmaps.

Support and partnerships from external partners are also a key for the success of ASCN. Collaborative partnerships can bring not only financing but also technical expertise and operational capabilities. For example, Amata Smart City Chonburi and the Yokohama Urban Solutions Alliance have signed a letter of intent on smart energy management system, which would help Amata Smart City Chonburi for its plan to set up its own Smart Grid Project.

ASCN is instrumental for bringing Asean smart cities together. However, realising opportunities of smart cities across the region requires action plans such as involving private sector cooperation, developing public awareness, having a highly coordinated government system, and collaborating with external partners.

Phidel Vineles is a senior analyst in the Office of the Executive Deputy Chairman at the S Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore. This comment first appeared in RSIS Commentaries.

Renewables

Trina Solar targets residential market in Philippines

18 December 2018

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Philippines ,
Singapore

SINGAPORE-BASED Trina Solar Energy Development Pte. Ltd. is targeting to install 5-6 megawatts (MW) of solar rooftop energy systems in Filipino homes each year as it sets its sights on the local residential market, its local manager said.

“We have quiet a bit of aggressive target in the Philippines… Usually we are given the task of at least 10% market share,” Junrhey Castro, Trina Solar country manager, told reporters in a briefing in Makati City on Tuesday.

Mr. Castro, who is also Trina Solar senior sales head for Australia and Southeast Asia, said the installation would cover both residential and commercial market segments.

Trina Solar launched its Trinahome solutions brand that focuses on residential consumers. The parent firm has previous projects in the Philippines but mostly industrial-scale development.

Mr. Castro said Trinahome offers “plug and play” residential solutions that come with warranties and backed by an international supplier.

Aside from homes, the entity also targets small to medium-sized commercial applications for distributed power generation.

“With Trinahome, we hope to give Filipinos an option to tap into a clean, sustainable and cheaper energy source,” he said, adding that its local strategy is in line with the country’s target of becoming energy self-sufficient and bringing cheaper and more reliable energy source.

Mr. Castro said the country relies for much of its power generation on coal, oil and gas that are largely imported, thus resulting in unpredictable energy prices that have “great economic impact.”

He noted the Philippines has some of the most expensive electricity prices in Asia, making the cost of power a major expense for households and businesses. He placed a Filipino’s electricity charge at around P8.5 to P9 per kilowatt-hour and accounts for a household’s major monthly spending.

Solar energy is cheaper than energy from the grid since a rooftop system become its owner’s power generation source, he said. The cost of solar has significantly declined in the past years because of new manufacturing technology and economies of scale.

A Trinahome solution is available in 1.5-kilowatt (kW), 3-kW, 5-kW and 10-kW systems depending on the size of the customer’s home and requirement. It is now commercially available in the Philippines through its approved distributors and local partners.

Mr. Castro said the country has new policies in place that would motivate consumers to go into solar, citing Renewable Portfolio Standard (RPS) and Green Energy Option Program (GEOP).

RPS took effect on Dec. 30, 2017 and mandates energy sector participants to source or provide a minimum annual requirement from renewable energy (RE) resources through the trading of RE certificates.

GEOP is a voluntary program allowing end-users to choose RE resources. The program is aimed at end-users with a monthly peak demand of 100 kW and above for the past 12 months.

Trina Solar’s previous utility-scale solar projects in the Philippines include 132.5 MW in Cadiz, Negros Occidental; 80 MW also on Negros Island; 63.5 MW in Calatagan, Batangas; and 60 MW in Toledo, Cebu. — Victor V. Saulon

Renewables

The dawn of distributed energy

18 December 2018

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Philippines

Battle lines were drawn during the first public consultation for Senate Bill 1719 (otherwise known as the Solar Adoption Act) on November 19. Senator Grace Poe, author of SB 1719, and Senate Energy Committee Chair Senator Sherwin Gatchalian have recently held a Senate hearing and sought to correct some operational flaws of the 2008 RE Act, namely the removal of the 100 kWp for solar installation per meter, review of buyback rates to be at parity with retail electricity rates, ease of financing, and expedited permitting for solar projects.

Senator Gatchalian made his powerful statement to reluctant regulators who were intent on carrying on with their old ways and presenting problems – rather than solutions – for energy security and rooftop solar. While others played victims to forces that keep our country chained to the past, Senator Gatchalian and Senator Poe are clearly leading the Philippines towards a brighter and more sustainable future.

The whole energy industry of the Philippines shows us a classic model of gargantuan utility scale power plants in remote provinces pushing gigawatts of energy through hundreds of kilometers of high voltage transmission lines, stepped down to the substations of distribution utilities, and finally distributed to usable voltages and sold to consumers. This is the classic centralized energy model. This model calls for massive power plants to get economies of scale, as billions are spent on transmission and distribution assets to get from Point A to consumer at Point B (that can be a thousand kilometers away), woefully inefficient as 9% or more of it is gone into thin air and explained as “systems loss”.

That is exactly how my father’s generation generated, transmitted, distributed, and sold energy: big, clunky, smoky and complex. However, things are changing, in the same way that the internet replaced the fax machine. There is a paradigm shift on how energy can be sourced, sold and traded, and this is called Distributed Energy Resource, or DER. This is a disruption on the old way of doing things, and it is an economic and inevitable fact that regulators, distribution utilities, and consumers have to understand – in order to embrace the future.

Distributed Generation or Distributed Energy Resource (DER) is when the classic form of centralized generation gets modernized by hundreds of thousands of small generating plants that are all synchronized to the national grid. These distributed “generation” plants are almost always SOLAR: universally accessible, locatable and affordable. It only needs a boring unshaded roof to generate electricity and in the tropical Philippines, it performs very well. It can cost as little as an iPhone to a massive MW multimillion-dollar investment, depending if the owner is a factory worker or a factory owner. Solar rooftops are going to be the future, and even utilities themselves are playing solar installer nowadays.

Renewable Energy or RE is the fastest growing energy resource, outstripping nuclear and coal. Globally, solar and wind are the main source for capacity additions and countries not known for sunny weather have adopted and perfected these trends. The early adopters are Germany, Japan, EU and now the non-subsidized players are countries similar to ours such as Vietnam, India, and Indonesia that are benefiting from below grid prices, because of the pathway that the industrialized nations paved a decade ago from policy changes.

In all those countries, massive growth of renewable energy resulted in declining hard currency conversion for importing oil and coal, borne from strong government policy, long term vision, incentives for green initiatives and penalties levied for carbon pollution.

It is a surprise to many that the Philippines was the first ASEAN country to implement Net Metering under RA 9513 or the Renewable Energy Law of 2008. Net Metering allows the most economic way for an end user to install solar panels without the need of batteries, and sell or export the surplus generation to the grid and get credits to offset evening consumption. However, at its 5^th year of implementation, notable roadblocks were encountered from regulators, utilities, LGUs and lack of financing options. SB 1719 hopes to correct it, and modernize the Philippine grid to a new energy economy.

Only 1 percent of 1 percent of generation is sourced from Net Metered homes and businesses with solar panels, coal generation mix is actually increasing versus renewables despite Solar is proving to be a viable price leader in the energy mix. Surprisingly, regulators that represent consumer interests and traditional power producers are already stating that more adaptation of renewable energy may disrupt the stability of the grid. Power producers are declaring it will threaten their long-term profitability models. Their arguments were in contrast to the cries of bill/tax paying end users who are complaining about paying the highest ASEAN electricity rates, anachronistic 100kWp capacity limitations on industrial users, and excessive red tape in getting permits for simple home installations.

In their hesitation to propel the nation towards change, regulators gave the overly safe argument that the grid was not prepared for an influx of RE generation, or removing arbitrary installation caps on power intensive users such as malls, auto dealerships or government buildings who clearly demonstrated a need to put in more than 100kWp than what the current net metering rules call for but denied by clearly outdated regulation. There is already the natural limitation that a business would not install more solar than what it can consume or limited by its connected load. Regulators seem to have forgotten that surplus of energy is not a problem in the Philippines with its growing economy, but lack of its supply is threatening national energy security and a drain on its dollar reserves. Last summer’s yellow alert power shortages during sunny hours almost caused cascading grid-wide outages.

SB 1719 calls for a true 1:1 valuation of exported solar to the grid. The current pricing scheme of the utilities buying surplus solar energy at point of distribution at less than its intended half value is a mathematical perversion of Net metering as defined in RA 9153. The Senate bill seeks to specifically call out any ambiguity on pricing methodology and keep it consistent to practices in other worldwide jurisdictions.

There is resistance to change; big power producers are crying foul that rooftop solar would result in a revenue drop from reduced demand. Regulators are cautioning that the unbridled adaptation of solar rooftops would crash the grid with oversupply. The arguments are contrary to the Philippine experience as it faces constant threat of constriction of energy supplies and pricing is subject to the wild market forces of supply and demand dynamics of WESM spot market. The surest way to drop prices is to flood the market with plenty of supply, especially peak daytime hours. The concept of a perpetual captive market was a hard idea to break. Regulators were strumming unfounded fears that too many solar rooftops would be a burden to the grid, oblivious to the fact that modern solar equipment are the same ones used in advanced countries, hence having grid voltage and Hz tolerances well within the limits of Philippine distribution code, automatically regulating itself within fractions of a second, and decoupling if voltages are going to high.

Creating future-oriented policies are the path to modernization. Lower energy prices are borne from indigenous and abundant supply of energy. Any meaningful change is going to be a challenge to all players in the energy sector. Regulators would have to walk the fine line between consumer and power producers as this line will be blurred with DER. Grid managers will have to study weather patterns as this will gradually influence the dynamics of energy when rooftop solar energy is more than a token 1 percent of 1 percent.

SB1719 is a step forward towards a sustainable Philippines. Ordinary Filipinos and the private consumer sector will now be part of the energy generation mix. Solar power system installation investments will be rewarded. Bank financing gates will be opened. The nation is moving out of the dark ages, stepping into the sun, and walking towards the dawn of distributed energy.

Oil & Gas

Philippines’ first LNG terminal sought by China and Japan

18 December 2018

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Philippines

MANILA/BEIJING/TOKYO — The Philippines has become a new front in China and Japan’s infrastructure rivalry as companies from both countries bid to build the archipelago’s first liquefied natural gas terminal […]

Others

In Asia, bonds are finding it’s easier being green

18 December 2018

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ASEAN

JAKARTA – Just a few years ago, when Mr Clifford Lee, head of fixed income at DBS, sounded out potential clients about their appetite for green bonds – debt sold specifically for sustainable purposes like building a wind farm – conversations were short and tended to end with “no”.

That’s because green bonds were no cheaper than their conventional cousins and sustainability for some just wasn’t a thing back then. But in the wake of the Paris Climate Accord, and a series of vicious storms and steadily deteriorating air and water quality in the region’s biggest cities, investors are coming around.

“There was always a long pause. Being practical Asians, it ended the conversation,” Mr Lee recalled of those exploratory conversations around the beginning of the decade.

Outside South-east Asia, green bonds have been in increasing demand, giving their socially conscious sellers bragging rights that they are serious about environment. About US$130 billion of the specialised debt will be sold this year.

In South-east Asia, enthusiasm has been muted – until now. This year marks the first full year of standardised Asean rules governing how the bonds are cobbled together, certified and sold. Governments, banks and renewable energy companies in Indonesia, Malaysia, Thailand and Singapore are among the issuers. About US$4 billion green bonds will be sold in the region this year.

“There is a revolution afoot,” said Mr Sean Kidney, chief executive of the Climate Bonds Initiative, an NGO focused on green bonds.

“People want cleaner air, cleaner water and that is going to take financing.”

In November last year, regulators, through the Asean Capital Markets Forum, set rules governing who may sell green bonds, how they’re certified and which projects may qualify. A gas-powered electricity plant, for example, is a non-starter.

The rules also compel green bond issuers to disclose information on individual projects and how proceeds of the bond sale are spent.

Creaking infrastructure and deteriorating air and water quality are already exacerbating challenges faced by beleaguered residents of Asia’s biggest cities.

Cyclists in Jakarta this month occupied the capital’s Dutch colonial city hall to threaten court action against the local government of Governor Anies Basweden to clean up air pollution. Research last month from the University of Chicago indicated air pollution in the worst affected parts of India can shorten life expectancy by a decade.

Elsewhere, wild fires in California in November, which destroyed 14,000 homes and claimed 85 lives, were the state’s deadliest. A trio of hurricanes and other storms in the United States last year caused a record US$306 billion in damages.

The International Energy Agency has said some US$53 trillion in new infrastructure will be needed by 2035 to avoid a sharp increase in global temperatures.

But there are signs the infrastructure is not getting built fast enough. Worldwide carbon emissions grew 2.7 per cent this year compared with 1.6 per cent last year as motorists drove more.

Mr Lee of DBS says that as the world focuses on the impacts of climate change, fund managers, companies and governments will be under increasing pressure to show clients they are investing sustainably. “Going forward it is going to be necessary to have long-term sustainability plans,” he said. “It’s not something that is simply nice to have.”

DBS Bank this year advised on a US$580 million sale of green bonds by Jakarta’s Star Energy Geothermal to refinance bank loans used to buy two Chevron geothermal fields in Indonesia’s West Java. HSBC advised the Indonesian government on its US$1.25 billion green Islamic bond – the first such instrument.

Indonesian officials overseeing the bond sale said the government was eager to show it was serious about meeting its commitments under the Paris climate agreement. Indonesia is a perennial target of environmentalists for failing to curb deforestation linked to oil palm plantations.

“The government of Indonesia has a vision and a mission to combat climate change,” said Mr Luky Alfirman, director-general of budget financing at the Ministry of Finance.

“The key benefit (of the green bond sale) was to raise Indonesia’s image as a leader in sustainable finance.”

Elsewhere, in Thailand, TMB Bank sold the country’s first green bond with a US$60 billion offering in June.

In April, Malaysia said it would offer grants to help offset the cost of setting up green Islamic bonds, known as sukuk, following a launch of a RM250 million (S$82 million) green Islamic bond by renewable energy company Tadau a year earlier to help finance a solar power station.

To be sure, there are limits to the usefulness of green bonds.

Mr Rudy Suparman, Star Energy’s chief executive, says regulation can be a bigger headache. Indonesia’s caps on electricity prices crimp profit in a business where it costs US$10 million to drill a single well.

“We’re very happy with the sale. There was a lot of interest,” Mr Rudy said.

But the government caps on tariffs means “there’s no room for error”.

Mr Rudy is not sure if a green bond is even necessary for a company that has the word “geothermal” in its name. Star Energy generates electricity from steam produced by hot rocks 1,500m deep, giving him all the green bragging rights he needs.

“This is our business,” Mr Rudy said. “We aren’t doing anything extra for this.”

Pure play renewable energy companies aside, proponents say green bonds help back up more diversified companies’ claims of corporate social responsibility.

But making the sales of green bonds more commonplace in South-east Asia will hinge on incentives and education.

Last year, the Monetary Authority of Singapore said it would reimburse green bond auditor fees up to a cap of S$100,000. It’s a good start but regulators need to talk up the product more, Mr Kidney said.

“They need to explain what it is and what it does. We need investors to say they want it and we need deal flow,” Mr Kidney said.

“The goal is to flush out potential issuers.”

Renewables

China’s Trina Solar eyes 10% of PHL solar energy market share

18 December 2018

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Philippines

China-headquartered Trina Solar on Tuesday said it hopes to capture at least 10 percent of the Philippine market for residential solar energy.

The company has just launched its solar rooftop product— the Trinahome Solutions—in the country.

In a press conference in Makati City, Trina Solar Philippines country manager Junrhey Castro said the company expect to reach its initial goal of 10-percent market share by 2019.

“We have quite a bit of an aggressive target in the Philippines. We are given the task to meet at least 10 percent market share,” he told reporters. “For the residential share of the market, we’re looking at least 5 to 6 megawatts a year in the Philippines.”

Depending on the roof size and customer requirements, Trinahome panels are designed as 1.5-kilowatt, 3.5-kilowatt, 5-kilowatt, and 10-kilowatt systems and costing from P100,000 to P500,000.

Castro claimed the Trinahome system pays for itself in four to six years, it is the “perfect investment.”

All components of the product—solar modules, inverter, grid box, and mounting—are backed by a 25-year Trina Solar warranty.

“The whole system is backed by one supplier. All the components work together seamlessly to provide greater efficiency,” Castro noted

Bioenergy

ADB warns of barriers to waste-to-energy investment

18 December 2018

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Philippines

THE DEVELOPMENT of waste-to-energy (WTE) facilities in the Philippines through public-private partnerships (PPPs) may be plagued by uncertainty due to an inadequate legal framework, the Asian Development Bank (ADB) said.

“Municipal solid waste (MSW) processing and disposal remains a challenge in Bangladesh, India, and the Philippines. The uptake of WTE as a proven MSW treatment solution has not been realized in Bangladesh and the Philippines,” the ADB said in a working paper.

According to the ADB, the three countries are among the most populated, due to rapid urbanization. They are also the top MSW generators in Asia and in the world, and remain underdeveloped in terms of MSW processing and disposal. They are also net energy importers, and have not realized 100% electrification.

“Despite a well-established PPP regulatory framework and a mature PPP market for municipal infrastructure and public services, potential business opportunities in WTE in the three countries have not attracted private sector investors and financial institutions due to numerous barriers, and thus remain largely unexplored,” the ADB said.

“Ambiguity and inconsistency that leads to an open interpretation of WTE’s role needs to be avoided. The ban on incineration in the Philippines is an example,” it added.

This is because the Clean Air Act, Ecological Solid Waste Management Act, and the Renewable Energy Act bans municipal solid waste incineration can be interpreted in various ways.

“It could mean either a totally unconditional ban on incineration regardless of technology specifications and emission standards, or a conditional ban that applies only to incineration that emits poisonous and toxic fumes exceeding the stipulated limits,” the ADB said.

The PPP Center is currently bidding out the P22-billion Quezon City Waste-to-Energy facility project that is expected to be implemented by early 2019. The facility will have the capacity to convert up to 3,000 metric tons a day from Quezon City’s municipal waste to 42 megawatts, which can power around 60,000 to 90,000 homes.

The PPP Center earlier described WTEs as the “next wave” of PPPs, due to strong local government and investor interest. Cebu is also considering setting up its own WTE facilities.

According to the working paper, the Philippines’ 45.2 million urban population produces 30,000 tons of municipal solid waste per day, mostly from Metro Manila. This compares with China’s 520,000 tons per day, 707,000 tons in the US, 188,500 tons in India, and 61,400 tons in Bangladesh.

It noted that the Philippines only collects 40-85% of the generated waste, meaning the 15-60% is improperly disposed of.

The Philippines has one WTE facility, the Payatas Controlled Waste Disposal Facility in Quezon City, which opened in 2008. Electricity generated from the facility is sold to the Manila Electric Company to supply nearby communities. — Elijah Joseph C. Tubayan

Oil & Gas

Vietnam Natural Gas Plans Clash with Climate Fears

18 December 2018

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Vietnam

HO CHI MINH CITY — Vietnam repeatedly calls itself one of the countries that would be most devastated if climate change worsens, but it is also preparing to import liquefied natural gas (LNG), which emits the greenhouse gases that accelerate climate change.

Rather than drastically boost renewable energy, Vietnam plans to start using LNG for the first time in 2020, a decision that highlights how hard it is for countries to balance energy costs with environmental protection.

While emissions resulting from LNG extraction, production and use are low compared to other fossil fuels, its increasing usage means it will be the biggest source of carbon emission growth by 2025 according to the energy consultancy Woods Mackenzie.

Le Van Luc at the Ministry of Industry and Trade explains that, as the economy grows quickly, domestic energy supplies can not keep up with the need for more electricity.

“You could see that for Vietnam, our country used to produce and export energy for many years,” said Luc, deputy director of electricity and renewable energy at the ministry. “However, in 2015, we became a net energy importer, especially of coal and natural gas.”

The communist country of 100 million people is not alone.

FILE - Participants take part in plenary session during COP24 U.N. Climate Change Conference 2018 in Katowice, Poland, Dec. 13, 2018. — FILE – Participants take part in plenary session during COP24 U.N. Climate Change Conference 2018 in Katowice, Poland, Dec. 13, 2018.

Other United Nations members gathering for climate talks in Poland this week face similar challenges, from the yellow vest protesters in France angered by fuel price hikes, to the U.S. officials trying to convince U.N. colleagues in side events that coal can be clean.

Elsewhere in Southeast Asia, as well, peers like Indonesia and Thailand intend to burn ever more coal, despite also fearing the threat of climate change.

For Vietnam, LNG is making its debut in part because policymakers believe there are limits to renewable energy. Luc said that the country is reaching the upper limit of the hydro power it can get from dams, and that natural gas is a bit more affordable than wind or solar power.

FILE - A solar water heater, left, and a solar panel, right, are seen at Entech Hanoi, an international trade fair on energy efficiency and the environment, at the Giang Vo Exhibition Center in Hanoi, Vietnam. — FILE – A solar water heater, left, and a solar panel, right, are seen at Entech Hanoi, an international trade fair on energy efficiency and the environment, at the Giang Vo Exhibition Center in Hanoi, Vietnam.

LNG is also being discussed because the United States wants to promote it here, which would allow American companies to export more of the fossil fuel. The U.S. government organized a natural gas conference last week, when Mary Tarnowka, the U.S. consul general in Ho Chi Minh City, warned of energy shortages to come in southern Vietnam. She noted the city she currently calls home has annual economic growth of 10 percent.

FILE - This aerial photo taken on October 19, 2018 shows houses along the Xuyen Tam canal in Ho Chi Minh City. — FILE – This aerial photo taken on October 19, 2018 shows houses along the Xuyen Tam canal in Ho Chi Minh City.

“All of this is creating a growing middle class, and a society and culture that is growing as quickly as their energy demands,” she said in a speech. “With the rising demand for energy approaching a growth rate of 8 percent in 2018, Vietnam is currently facing significant challenges in the southern provinces in order to keep pace.”

Natural gas is typically transported through pipelines, but for longer distances, it must be cooled down to a liquid state, so that it can be shipped in containers. That would allow it to travel from the United States, across the Pacific to Vietnam.

Once it arrives, though, there has to be infrastructure to receive the LNG and warm it back into a gaseous state that can be used for fuel. That is where U.S. companies and agencies are coming in to advise on construction.

“The difficulty and challenge for Vietnam is that we have yet to have any experience in constructing or operating LNG infrastructure,” Luc said.

He added that the country is still investing in electricity generated from the wind and the sun. But fossil fuels are needed as a buffer, Luc said, for when the wind is not blowing and the sun is not shining.

Some investors say Vietnam pays too low a tariff to make renewables viable, but others are already making a profit from solar power and say firms need to accept the price rather than hope for it to change.

Environmental economist Le Viet Phu said Vietnam needs a diverse energy mix. The country is not going to abandon coal, but using more natural gas will be less polluting than coal, and alternative energy is on the rise, he said.

“Renewables are good for shedding peak loads, but renewables are not cheap,” said Phu, of Fulbright University Vietnam. “We have seen renewables picking up speed recently, but it will be years until we see some significant impact on the system.”

And activists are not giving up on alternative energy, including biomass, which refers to plants that can be burned as fuel.

“Ho Chi Minh City and the Mekong Delta are the areas with the largest potential in the country for renewable energy development projects,” environmental group CHANGE wrote on its blog, “especially solar and biomass, with many hours of sunshine, a long sunny season, and abundant agricultural by-products, such as straw, rice bran, and rice husks.”

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