Vietnam's dirty growth

By Calvin Godfrey, Thanh Nien News

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A worker watering to prevent dust from the waste piles of spent coal at Vinh Tan 2 power plant in Binh Thuan Province. Photo: Vietnam News Agency

The prettiest route to the Vinh Tan 2 power plant follows the coast road in Binh Thuan Province, past endless foundering beachfront resorts and through some of the strongest coastal winds in the country.
Just five kilometers beyond Vinh Hao (the town where the namesake mineral water firm was founded) traffic comes to a crawl. Backhoes and bulldozers have dug a gully that separates the row of rice shops, motels and flophouses on your left from the National Highway.
On your right, the red and white chimney of the Vinh Tan 2 power station towers above the small fishing village of the same name. Built by the Shanghai Electricity Company and powered with coal dust trucked down from Quang Ninh Province, the smoke stack now seems more like a monument to bad ideas—a symbol for everything that's wrong with Vietnam's future power plans.
The Chinese media, incidentally, has described the Vinh Tan 2 as “China's biggest investment in Vietnam.” In reality, the project involved paying Shanghai Electric $1.75 billion to build something it probably couldn't sell in Shanghai.
The plant began partial operations in 2014 and paid $89,000 in environmental fee before the end of the year. In January of 2015, Vinh Tan 2 doubled its output, making everything worse.
On April 14, a group of local citizens gathered to protest the significant amounts of black dust blowing out over their village—both from the stack and the uncovered waste piles of spent coal.
A local mechanic, who agreed to speak via telephone on condition of anonymity, said the group mustered in force the following day at noon, then moved onto the highway—backing truck traffic up for miles.
Police responded with loudspeakers. “The police tried to calm everyone down and never arrested anyone,” the mechanic said. “There were no injuries as reported or rumored.”
Local residents block vehicles on National Highway 1 to protest Vinh Tan 2's amounts of black dust blowing out over their village on April 15, 2015. Photo: Que Ha
The citizens refused to move, he said, and eventually began hurling rocks and petrol bombs at the cops. Three cars parked in front of nearby hotels were badly damaged, he said.
The protesters began to disperse in the early morning of the following day. Traffic didn't get moving normally until after lunch on April 16.
On a recent weekday, a stooped 72-year woman parked her bicycle—loaded with plastic bottles—in full view of the intersection where this happened. Asked about the confrontation, she only wanted to talk about dust.
“That's where the smoke came from,” she said pointing to the chimney in the distance. “It went all over everyone's faces.”
When the wind slowed down, the pollution pouring out of the smokestack became intolerable, she said. Even when it picked up, she said, the Vinh Tan 2's spent coal blew blanketed the town.
One estimate had it that 150 uncovered trucks drove tons of the black powder to an open landfill, every day. This made the air particularly hard for children to breath, she said. They coughed and suffered sore throats. And things got dirty in town.
A waitress at a local rice restaurant complained that, by the time you put a plate of rice down on the table it was black. “We sent letter after letter telling them to spray down the slate to cut down on the dust,” the waitress said. “But they wouldn't do anything.”
That's when everyone turned out to stop traffic. The waitress, who'd only been in town a month, had a front-row seat to the standoff.
She claimed only a single cop had his mouth ripped open by flying rock. After the chaos, all of the spent coal was covered and sprayed down—both at the landfill and on the trucks moving it around.
In the meantime, work continues in earnest on a tunnel to the waste dump that will reroute the trucks currently moving through town.
The protest raised the question of what Vietnam will do with the estimated millions of tons of waste—both dust and toxic slurry—generated by its coal plants.
A vice minister censured the managers of the plant and urged them to begin selling the slate to a cement manufacturer--an arrangement that could only prove economically viable by building cement factories in the little town.
In the end, it remains unclear why the Vinh Tan 2 has proven so dirty. The BBC quoted Professor Nguyen Dinh Tuan of the University of Natural Resources in Ho Chi Minh City as saying he suspected the plant's engineers didn't know how to use its electrostatic precipitator, a device designed to filter the emission of dust.
When contacted by phone, Tuan said he believed the plant was outfitted with such equipment but wondered if it worked or not.
Workers at Vinh Tan 2 coal power plant cover the landfill after the pollution protest. Photo: Que Ha

Aurecon, the Australian conglomerate hired to provide “project management and technical services” to the plant, did not respond to a list of questions sent to its offices.
“After the protest, the company that built the plant met with the locals and signed a commitment to reduce pollution,” said the anonymous mechanic. “The local administration monitored that process. But from what I'm seeing, pollution has only gotten worse since it was built. Measures to deal with the pollution have been so far very ad hoc.”
Provincial authorities plan to relocate the town's most-affected hamlet to a “cleaner” location—though a local People's Committee representative said there was no clear timeline for when the relocation would occur or to where.
This may be the only viable solution, given what's in store for the little fishing village. The Vinh Tan 2 will eventually be joined by three more coal plants and a port to fuel them thanks to loans provided by Korea, Japan and China.
No one's sure when they will actually be built. The Vinh Tan 1 plant, for example, was supposed to go on-stream in 2011, but is currently waiting on a $1.4 billion Chinese loan.
The Vinh Tan 4 is reportedly being built with Japanese and South Korean funds and is projected to be completed in 2017. One day, Vinh Tan will also become home to a port and various waste treatment centers to support all the coal burning.
The old scrap collector offered another idea: “Tell them to get involved and protect the environment.”
On May 14, scores of wind turbine salesmen, government functionaries and lawyers shuffled into the sleek Pullman Saigon Hotel to attend the US-Vietnam Clean Energy Conference.
Patrick Wall, the US consulate’s thickly mustachioed Principal Commercial Officer mounted the podium and described Elon Musk's recent unveiling of a line of cheap, high-capacity batteries as “a paradigm shift” and invited the audience to imagine “a time when you could disengage your home from the grid entirely.”
Sponsored in part by General Electric and the Vietnam Investment Review, the day's events hardly allowed for such a vision.
During an informal poll, only half a dozen people raised their hands to identify themselves as people who had successfully invested in a green energy project. During talks, it was revealed that things in Hanoi are so retrograde that when the United Nations building attempted to sell back the extra power generated from the panels on its roof, they were politely told they could not.
“There's no framework for solar trading in Vietnam,” said Vu Thi Thu Hang of the United Nations Development Project during a telephone interview.
At the moment, there are few signs that the country can make any radical effort to harness its considerable supply of wind and sunshine. A report commissioned by the European Commission and released in April charged that a lack of comprehensive laws had rendered solar, wind and biomass projects “un-investable in Vietnam despite many years of foreign donor-funded development programs with the government.”
Meanwhile, it became clear during the conference that many of the quick and easy things Vietnam could theoretically do to drastically reduce its energy needs simply aren't being done. “Vietnam has a mandatory building energy code; that code is not being followed,” said Joe Derringer, a USAID adviser specializing in energy efficiency.
All of this inertia is already taking a startling economic toll. During a presentation on Vietnam's existing solar development projects, Trinh Quang Dung claimed that pollution would eat up 7.5 percent of Vietnam's annual Gross Domestic Product by 2025.
A man from GE presented a study indicating that wind turbines could profitably add more power to Vietnam's grid than all four Vinh Tan plants in the next five years without any negative environmental impacts.
Unfortunately, Vietnam's price for wind is based on outmoded coal prices, according to a slide presented by Nguyen Hoang Dung, the Director of the Power and Engineering Joint-Stock Company—a subsidiary of Electricity of Vietnam the state power monopoly.
During a discussion on the sidelines John Rockhold, President of Pacific Rim Investment Management called EVN a bankrupt entity that requires a $2 billion government bailout, annually.
Like everyone else in the room, Rockhold insisted that Vietnam establish clear laws governing the prices EVN must pay for renewable energy—a price he insisted would have to rocket significantly to attract foreign capital.
Rockhold suggested EVN follow Mexico's lead and try to ink power purchase agreements with foreign manufacturers seeking green energy at a stable price. Under such agreements, EVN could collect sizable transmission fees and foreign manufacturers could mark up their retail prices by boasting about their green bona fides.
Without such agreements, Rockhold warned, manufacturers in Vietnam could face punitive tariffs for having manufactured goods at Vietnam's subsidized energy prices.
But by the time much of this bad news was being broadcast, the conference room had largely emptied out. Government officials and EVN heads had mostly exited the room. And it seemed that people like Rockhold were mostly talking to themselves.
Betting on when the lights will go out in southern Vietnam has become a pastime for the international press.
Two years ago The Economist and Bloomberg both warned blackouts were imminent. They never came--a fact that some analysts later attributed to overly optimistic growth projections.
But there are reasons to believe that Ho Chi Minh City has a hard few years ahead.
The state power monopoly, Electricity of Vietnam (EVN) said the south squeaked through 2014 by siphoning significant reserves from the North and Central region.
The same year, a local trade publication said the region had little to no power reserve margin (e.g. the difference between peak consumption and peak output). A senior Communist Party official later announced the same thing.
Before the rain started in earnest, many thought they would come this year.
Bikal Pokharel, the principal power analyst at the Singaporean office of global consultant Woods Mackenzie, called the possibility of rolling blackouts in southern Vietnam “likely” before the rain started.
“(The) level of shortages will depend on the water available in hydro reservoirs,” he wrote in an email. “Prolonged drought in central highlands this year can certainly trigger rolling blackouts.”
The problem for Vietnam's power infrastructure remains that power is just too remains too cheap to invest in.
Though EVN has implemented a few incremental price hikes in recent years, electricity sells for an average of just 7.5 cents per kilowatt hour.
More worrisome still is Vietnam's plan to crank coal from roughly a quarter of the nation's energy pie to over half over the next fifteen years. The country will import between 2-3 million tons of coal this fiscal year but is expected to import 75 million tons annually by 2030.
According to figures put forward by the Ministry of Natural Resources, this will increase the nation's carbon emissions by roughly seven-fold.
Vietnam already has some of the worst air quality in the world. So that plan hardly seems ideal.
Particularly since many believe it won't really solve the immediate problem of keeping the lights on.
“We’re looking at 5 years of shortages before the main new coal plants come on line,” wrote one corporate attorney. “In the meantime, EVN is so shaky that it is having trouble raising capital to build the plants it wants.”

EDITOR'S NOTE: the article has been updated to include a part (starting from "But there are reasons to believe that Ho Chi Minh City has a hard few years ahead.") which was accidentally left out in the original article.


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