Tailoring renewables to next-gen needs

Wouter Van Wersch

Investing in Vietnam even a year before the US embargo was lifted, GE has seen the two countries ­relations normalise, then grow from strength to strength. How have ­relations grown and what were the effects on your operations?

Vietnam has been a success story over the last 25 years, as underpinned by various statistics. In 1994, Vietnam’s GDP per capita was a little more than $200 and today, 25 years later, it stands at over $2,000 – a truly amazing growth! Following the incredible 7.1 per cent growth in 2018, the country is keeping steadily to its development trajectory, underpinned by its firm partnership with other countries, among which the United States plays a key role. Lifting the trade embargo was the first step towards today’s strong US-Vietnam bilateral relations that are centred on trade and investment relations. Trade value between the two countries has increased more than 130 times since 1994, from $450 million in 1994 to nearly $60 billion in 2018.

We believe that GE’s growth in Vietnam correlated to the country’s growth and we hope to have played a small part in contributing to Vietnam’s success through our activities in power generation (thermal and renewable) and power transmission, but also in healthcare and aviation. The potential offered by Vietnam in the early 1990s was immense and led us to take the plunge before the embargo was lifted. The country’s potential today is even more important, and we are ready to continue to support the country to tap into this.

What changes have you seen in Vietnam since it embraced integration to the regional and global market?

The Vietnamese economy is undergoing unprecedented transformation. The country is moving from a state-oriented environment to letting market forces and the private sector play their role. I believe that the shift is very visible and every time I visit I feel the country is changing. The country is going to adapt to what it needs for the future by becoming more sustainable and more environmentally friendly. Meanwhile, the government has recently been even more welcoming to investors. Taking an example from the energy sector, when the government decided in November 2018 to raise the feed-in tariffs from 7.8 to 8.5 US cents per kWh for wind onshore and 9.8 US cents for wind offshore power generation. Thanks to its geographical location, the ­Vietnamese market has become very promising for wind energy investments and the country has paved the way for private investors to play a more significant role.

Vietnam is committed to an ambitious investment plan to develop overall infrastructure in the country, which will provide significant opportunities for both inbound and outbound investment for the next few years. We see this as a huge opportunity to accompany the country in upgrading its infrastructure.

Operating in many parts of world, including the ASEAN, how is doing business different in Vietnam than in other countries in the region?

Most governments have the same goal: they want to foster the country’s growth and uphold living standards for the people – and to make it happen, they need the appropriate infrastructure. Of course, different countries follow different approaches, some countries depend a lot on the private sector while others are more dependent on their state-owned enterprises. Vietnam, as an emerging market, is now striving to create a springboard for both sectors.

As a company, GE believes in a tailored approach for every country, we call it a “Company to Country” approach. We adopt our approach and strategy in Vietnam and in other countries, looking at what is needed to support the development and making sure we bring the right solutions.

Vietnam will continue to see the rising demand for power, like in the rest of the world, but must evolve its energy mix to cope with the growing environmental challenges and the need to reduce emissions as soon as possible. This means increasing the use of renewable energy and other environmentally-friendly sources, leverage efficient gas power generation to cope with the intermittencies, and at the same time, applying advanced technology to make traditional sources of energy cleaner and more effective.

Regarding living standards, the growing size of the middle class will require not only greater access to healthcare but also access to better healthcare. Transportation is another focus for us, as the local aviation market is booming more than ever, and GE Aviation is well positioned to

benefit from this. We are committed to our journey towards sustainability in Vietnam, by utilising our expertise and customised solutions.

Talking about sustainability, there is a shift not only towards connectivity and inclusion but also towards sustainability within the ASEAN. What are your thoughts on this trend?

Southeast Asia represents an important growth opportunity, and economic growth requires secure power. From my perspective, finding the right source of power to sustain the ASEAN’s next generation is essential.

The energy demand in ASEAN countries has grown by 60 per cent over the past 15 years. We have 65 million people in the region and around 10 per cent still do not have access to electricity. This needs to be addressed urgently. Some countries have electrification rates of only 30 per cent, thus, power generation is the key piece that needs to be grown. We are focusing strongly on this market.

We bring our proven expertise. We have a complete portfolio of state-of-the-art thermal technologies in gas and coal, we have the entire renewable suite of solutions for wind, solar, hydro power generation, as well as a revolutionary battery storage solution called “Energy Reservoir”. Every country has its specific situation, specific resources, and we bring truly customised solutions for each of them to drive sustainability.