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Vietnamese company TGS Green Hydrogen is to build the country’s first hydrogen plant with an investment worth US$840 million.
When completed, the plant is expected to generate around 24,000 tons of hydrogen, 150,000 tons of ammonia, and 195,000 tons of oxygen annually. The main attraction of hydrogen is its versatility as it can be used either for energy storage or as fuel.
Vietnam will continue to rely on fossil fuels
However, despite the developments in renewable energy production, Vietnam will continue to rely on fossil fuels, especially coal. As a net importer of coal, the country plans to increase raise annual coal imports to over 46 million metric tons by 2025 and to 123 million metric tons by 2045.
Vietnamese company TGS Green Hydrogen plans to invest some US$840 million to develop a hydrogen plant, the first in the country. The plant is expected to be built in the southern province of Ben Tre with construction scheduled to begin in June 2022 and expected to be completed by 2023.
The plant will generate around 24,000 tons of hydrogen, 150,000 tons of ammonia, and 195,000 tons of oxygen annually, with the potential to double this capacity at a later stage. The hydrogen will be extracted from water using electrolysis powered by renewable energy, so it can be classified as green energy.
The main attraction of hydrogen is its versatility as it can be used for energy storage or as fuel. It can also be used as raw material in the industrialization process from steelmaking to chemical and refinery industries.
The global transition to sustainable energy
In terms of energy storage, hydrogen can be produced in areas where renewable energy is in abundance, then it can be converted to hydrogen, before being transported to energy-hungry regions.
As such, when produced from clean electricity, hydrogen is seen as an enabler in the global transition to sustainable energy. However, the technology is still relatively expensive and still in the early stages of development.
The country had installed some 76,620 MW of power capacity, the highest in ASEAN, with renewables accounting for 24 percent of this total. Coal-fired power accounts for 30 percent of the national power, hydroelectricity accounts for 30 percent, gas and oil-fired power accounts for 15 percent, and wind power, just one percent.
Vietnam committed to becoming carbon neutral by 2050
At the United Nations climate conference (COP26) in November 2021, Vietnam committed to becoming carbon neutral by 2050.
Vietnam’s fast-paced economic growth, a burgeoning middle-class, and investments in manufacturing and industry have resulted in an unprecedented demand for electricity. The government projects that power consumption will grow between 10 to 12 percent per year until 2030, representing one of the fastest growths in Asia.
However, this growth is set to be outpaced by growth in capacity with the government expected to spend over US$148 billion on the electricity network and power generation. The country’s commitment to increasing energy capacity with the help of renewable energy may create valuable opportunities for foreign investors.
This article was first published by AseanBriefing which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, India, and Russia. Readers may write to [email protected]
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ASEAN Briefing features business news, regulatory updates and extensive data on ASEAN free trade, double tax agreements and foreign direct investment laws in the region. Covering all ASEAN members (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam)