According to forecasts, by 2030, the world will be faced with the risk of severe energy shortages and require about 10.5 thousand billion euro investment in the energy sector. Therefore, the energy efficiency, environmentally friendly solutions to ensure energy security and sustainable development is extremely important. However, the implementation is not simple.
Huge demand
With the speed of the current energy consumption, traditional energy sources of the world is expected to be depleted quickly. According to forecasts, by 2035, global energy consumption will increase 53%, and businesses around the world are constantly researching to find clean energy sources. Due to report of APEC, if the energy consumption intensity will not be reduced, energy demand in the region will increase equivalent to economic growth, which is about 225% till 2035. Besides, the current routine use of fossil fuels has raised concerns about the environment. The burning of fossil fuels generates about 21.3 billion tons of carbon dioxide annually. Carbon dioxide is a greenhouse gas increasing radiation power and contributing global warming, causing the average surface temperature of the Earth increases. The world is moving toward the use of renewable energy sources, a new way to solve the problem of energy demand.
Vietnam is also facing challenges of energy shortage risk within the next decade. Period 2010-2020 may appear imbalance between supply and demand for domestic energy sources, and Vietnam shifted from exporter to importer of energy, dependence on energy imports is on the rise.
The imbalance between energy supply and demand are menacing directly to the economy and society.
Great renewable energy sources:
Rural areas in Vietnam hides a lot of great renewable energy fields such as: bioenergy, hydropower, solar, wind or geothermal power ... Biogas energy potential is approximately 10 billion m3 a year, which can be collected from landfills, animal excrements and agricultural residues. The technical potential of small hydropower (<30MW) is larger than 4,000MW. Solar energy is abundant with average solar radiation at 5kWh/m2 per day throughout the country. Vietnam’s geographic orientation with approximately 3400km of coastline also provides abundant wind energy at an estimated potential of 500-1000 kWh/m2 per year. The value of this resources can be enhanced by investment to appropriate infrastructure that corresponds to the needs of the community.
Many challenges
Despite huge demand and potential market, Vietnamese businesses investing in the energy sector are facing with numerous challenges.
One of the biggest challenges is the lack of appropriate policies and investments to encourage and support businesses to develop energy market especially renewable energy. A very large sum of money is needed for developing energy infrastructure including system expansion and efficiency improvement.
The Vietnamese private energy companies are limited in size and experience compared to other markets. They have limited support on market development from technical organizations. They are in need of effective link between the industry and labor force and, most of all, financial capital to implement bussiness ideas and creative projects.
Consequently, renewable energy sources currently account for only 3.5% of the country’s total power capacity and the rate is expected to increase to from 6%-6.5% by 2020 if no special effort will be made.
Great opportunity from VBCF for resolving businesses challenges in Vietnam
Recognizing these opportunities and challenges, Vietnam Business Challenge Fund (VBCF) has been established, to support private business operating in Vietnam in building innovative inclusive business models. VBCF focus on 03 areas identified as key sectors for sustainable development and inclusive business, including agriculture, low carbon growth, infrastructure and basic services.
In the field of low carbon growth, sustainable energy development in Vietnam, VBCF encourages business to submit innovative and commercially viable business ideas which might solve business challenges such as:
1) Introduction of energy and sustainable low emissions solutions that include the participation or directly benefit the low-income people of Vietnam;
2) Reduce pollution and improve the economic conditions of the community by turning waste into energy under model that include or benefit the low income people of Vietnam
The businesses supported by VBCF are expected to generate benefits for their companies and at the same time for the low income people, and contribute to protect natural environment, create clean energy, renewable energy ... VBCF help private businesses turn their initiatives into reality. These are businesses directly including the low income people in its business value chain, creating a sustainable business model for mutual benefit as VBCF slogan: "Business opportunities, Community benefits”.
VBCF will support business through mentoring support and funding of up to 49% of total investment of the project. VBCF funding scale will be in the range of $ 100,000 to $ 800,000 for each selected project.
Source: Vietnam Business Forum
