Making use of technological advances

Making use of technological advances, illustration photo

The determination of the government is indicated by the commercialisation of 5G networks in 2020 by domestic tech giants Viettel, VNPT, and MobiFone, and the national AI programme led by Vingroup, FPT, and CMC.

The two pillars of digital transformation have been established and downstreamed from the government to the private sector. Electricity of Vietnam (EVN) is the flagship among state-owned corporations to go digital by remotely operating most of its 110 kilovolt substations and smart meters, enabling energy consumption payments through internet banking. The digitalisation of EVN might reduce its operating costs in the long term, which translates to the remedy on retail electricity price increase pressures.

Digital transformation has been boosted recently due in part to the coronavirus pandemic. Many companies are moving their daily operations into the cloud from processes and permissions to approvals and video conferences. Industrials put more effort into automating machines and integrating more robots. Agriculture is moving from conventional outdoor crops and farms to indoor vertical models.

Enterprise resource-planning platform providers enjoy huge demand from the business communities that need to increase their data and back-up storage. The transition adds more electronics into the energy consumption pool of the country. Electronics work well under cool temperatures that will request more cooling capacity.

According to the International Monetary Fund, Vietnam’s GDP is expected to maintain a growth of 5-7 per cent during the next decade, even with the impacts of coronavirus, which requires 10 per cent of electricity supply annually. The correlation seems not to include the growth of automation and electric vehicles emergence foreseeable with many high-tech manufacturers and suppliers.

The energy efficiency directives indicated by Resolution No.55-NQ/TW dated February 11 on the orientation of the National Energy Development Strategy of Vietnam to 2030 with a vision to 2045 should be enforced as soon as possible through mandatory regulations with clear penalties for energy-intensive players.

One of the pillars of digital transformation, 5G expected to be serviced in 2020 will double or triple the energy consumption of local telecoms carriers due to requirements of denser network coverage and deployment of MIMO (multiple inputs, multiple outputs) antennas. Based on the statistics of the Ministry of Information and Communications, Viettel Telecom, VNPT, and MobiFone have 130,000, 76,000, and 65,000 base stations respectively distributed across the country.

Each base station can consume 20-24 kilowatt hours (kWh) daily on average, which results in 2.3 billion kWh per year, roughly 1.1 per cent of total energy consumption of the country. EVN stated that it commercially sold 209 billion kWh in 2019.

This might increase up to 2-3 per cent when the 5G networks are fully commercialised. Energy costs could be a driver for carriers to optimise their cell planning, utilise more services from telecoms companies, and directly save power through distributed renewable energy sources such as solar modules or small wind turbines.

Transportation that solely consumes petroleum will be soon be replaced by electric vehicles, and the upcoming metro lines can add more power demand. According to estimates from the Vietnam Automobile Manufacturer Association, the car ownership rate of Vietnam is about 23 per 1,000 people which translates to roughly 2.3 million cars running across the country.

The battery capacity used for each car is 50kWh (based on a Tesla Model 3 short run) at a utilisation rate of 50 per cent annually that could add 21 billion kWh energy demand annually. In addition, more than 40 million motorbikes whose average power is two kW running two hours a day will require additionally 58 billion kWh per year if they are all electrified.

A metro line consuming 438 million kWh per year might help reduce kWh needed from electric bikes. Of course, electrification of vehicles will have a roadmap but they are at our front door, ready to be accounted for. There is a potential cut on power demand for metro lines through installation of modules along exposed segments of the lines.

Urbanisation is creating more buildings, offices, apartments, and hospitals which are another source of power consumption. It is very difficult to find such a facility that is equipped with energy management systems to optimise the use of energy of items such as lighting, boilers, and fridges. Most of the facility departments within the commercial assets are measuring total bills monthly and yearly and are struggling with the errors occurring with the equipment.

Compulsory energy audits give asset owners the status and energy-saving potential as a whole without real proposals. The data-driven, decision-making process is needed to come up with optimal energy consumption. It is where digital transformation of conventional energy management comes into play due to the fact that the spaces available for direct reduction of energy consumption for these facilities (by solar modules or small wind turbines) are limited.

Furthermore, industrial assets are required for energy digitalisation to save operating costs as much as possible because of limitation on sola capacity allowed to cover their rooftops.

The strategy to become the fully-digital country does require the electricity sector to digitalise to figure out energy optimisation solutions as the Internet of Things enables billions of devices to have a voice and consume energy, just like the way people need breathing air, drinking water, and food. One-point GDP growth expecting two-point electricity investment might not hold, if smart energy-saving solutions are not rapidly applied.