The "Climate Change Response and Energy Efficiency Investment in South East Asia" conference held by the British Embassy in Viet Nam aimed to present the potential of Singapore, Malaysia, Indonesia, Philippines, Thailand and Viet Nam as potential energy efficiency investment markets.
British Ambassador to Viet Nam Antony Stokes, said investing in energy efficiency was an effective way to reduce greenhouse gases and save energy costs.
He said the use of energy efficiency solutions could reduce energy shortages and create opportunities for businesses which operate in the sector.
"Viet Nam has taken drastic measures to deal with climate change. The country should consider investing in increased energy efficiency instead of fossil fuel for its sustainable development," he said.
George Norris, head of South East Asia Economic Network said countries in the region still subsidised fossil fuel despite its cost.
"Eliminating fuel subsidies could yearly increase GDP by 0.1 to 0.7 per cent due to lower taxes and the removal of price distortions," he said, adding that the elimination could also reduce CO2 emission by 14 per cent by 2050.
The ReEx Capital Asia Pte Ltd's report showed that energy efficiency could reduce the region's annual energy bill by US$1.34 billion, and Viet Nam's by $193 million.
All primary and secondary energy consumers including industry, commerce, residential and transport sectors have energy efficient potential.
Singapore, Philippines and Viet Nam were evaluated to offer lucrative markets while Malaysia, Indonesia and Thailand had larger markets.
Viet Nam's market was estimated to be worth $850 million. Energy efficiency could also annually save the country about $190 million. The report also showed that the average payback for the investment in the country would be 52 months.
In the commercial sector the pay-back time would be 43 months, shorter than 62 months in the industrial sector.
Deputy general director of the Ministry of Industry and Trade's Science and Technology Department cum head of the Energy Efficiency and Conservation Office Phuong Hoang Kim said the yearly average growth rate of Viet Nam's energy use during 1999 to 2006 period was 12.4 per cent while its GDP grew 7.2 per cent.
The energy intensity of Viet Nam's economy grew from 387 kilogrammes of oil equivalent (kgoe) per $1,000 of GDP in 1998 to 569 kgoe in 2006.
"Industrial and residential consumers were the two dominant electricity sectors in Viet Nam, consuming 48 and 43 per cent of the total respectively." Kim said.
He said barriers to achieving energy efficiency in the country were a lack of information, insufficient readily available expertise and energy pricing.
"In Viet Nam, prices paid for energy were low relative to those in most other countries," he said, adding that domestic coal prices were below levels in other countries.
Tran Tat Thang, deputy general director of Viet Nam Steel Corporation said businesses in the sector have paid great attention to energy efficiency.
"However, there has been difficulties in accessing loans, as most of them were small projects which would struggle to receive loans from international organisations, while domestic banks have not been interested in such projects," he said.
George Norris said market-based electricity tariffs and energy efficiency friendly policies were crucial for the development.
"It also needed to build market awareness and capacity to take advantage of low-cost options for carbon reduction. Countries in the region should take innovative financing mechanism including loans, credit enhancement and loan guarantees for market development," he said.
Source: VNS