Energy costs of many industries account for more than 60 of product costs


VCN – The use of energy in Vietnam in enterprises’ block and many fields have high energy intensity such as chemicals and construction materials (cement, ceramics). Energy costs for many industries and sectors of industrial production account for more than 60% of product cost.

energy costs of many industries account for more than 60 of product costs
Son Ha Company is one of the enterprises that has applied many effective measures to save electricity. Photo: Thanh Nguyen

In Decision No. 280/QD-TTg of the Prime Minister dated March 13, 2019, on the National Programme on economical and efficient use of energy for 2019 – 2030 clearly states it must save 8-10% of the energy needed to develop the country under the normal development scenario, equivalent about 60 million tonnes of oil conversion.

The MoIT informed, in 2006 – 2015, Vietnam saved about 16 million tonnes of oil equivalent (TOE – tons of oil equivalent),about 103.7 billion kWh of electricity.

Although certain results have been achieved, according to experts, there are still many fields with high energy intensity such as chemicals in enterprises, construction materials (cement, ceramics); metallurgy (iron and steel production) and pulp and paper.

Information from the Ministry of Industry and Trade shows that energy costs for many industries/industrial production sectors account for more than 60% of product costs. The reason is that many firms are using old, outdated, and inefficient machines and equipment in terms of energy use.

Firms still have limited financial capacity to be able to transform technologies and techniques, replace old, outdated equipment with new, more energy-efficient lines.

Phuong Hoang Kim, Director of the Energy Efficiency and Sustainable Development Department (the MoIT) said that to achieve the target of saving from 8 to 10% of total energy consumption compared to under normal development until 2030, the involvement of local governments (People’s Committees at all levels) is vital and decisive.

In the experience of some countries, it is necessary to base on the specific situation of each locality to assign a specific plan and attach the responsibility of the head.

In Vietnam, research by the World Bank and the MoIT on the ability to allocate national targets for energy saving to Vietnam’s localities shows 63 provinces and cities can be divided into seven local groups with different energy-saving goals based on similar characteristics of energy-saving potential, economic structure, population characteristics.

Scientifically, it is possible to allocate the saving target of 8 – 10% of the whole country to each locality. On that basis, the MoIT together with localities defines annual and periodic targets for each province and city and attaches the responsibility of the local head to ensure implementation of the goal.

“It is necessary to carry out many solutions in parallel. Specifically, it is necessary to promote communication, raise awareness, improve the behavior of using electricity/energy for each specific target group; develop and organise the social/community rules, regulations on the behavior of using electricity/energy in each agency, organisation, business,” Kim said.

From enterprises’ perspective, the solution is to build and operate a fund to promote economical and efficient use of energy. The fund will be a place to provide preferential credits, open procedures to financially support businesses in technological innovation, replacing machines, equipment, and production lines towards efficiency in terms of energy usage and environmental protection.

By Thanh Nguyen/Dieu Huong

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