MINISTRY OF INDUSTRY AND TRADE

Strategic Environmental
Assessment

of

The National Plan For Power Development for the Period

2011-2020 with Perspective to 2030 (PDP VII)
(with comments from the appraisal committee in the
meeting on 16 April 2011)

Hanoi, May 2011

MINISTRY OF INDUSTRY AND TRADE

Strategic Environmental
Assessment

of

The National Plan For Power Development for the Period

2011-2020 with Perspective to 2030 (PDP VII)
(with comments from the appraisal committee in the
meeting on 16 April 2011)

Project Implementing Agency

Hanoi, May 2011

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TABLE OF CONTENT
Acronyms 1
Executive Summary 2
1. Background and Context of the National Power Development Plan 9
2. Legal and Institutional Framework for the SEA 11
2.1. Legal Framework 11
2.1.1. Laws and Policies Related to Environmental Protection 11
2.1.2. Laws and Legislation on Water Resources 13
2.1.3. Laws and Regulations on Environmental Preservation and Protection 13
2.1.4. Legislation Related to Resettlement 16
2.1.5. Law and Legislation on Energy and Electricity 17
2.1.6. Other Legislation 18
2.2. Overall Strategies and Policies 19
2.2.1. Environmental and Socio- economic Strategies and Policies 19
2.2.2. Energy Strategies and Policies 20
2.3. Technical Framework 21
3. Objectives, Approach, Methodology, Organization and Implementation of
the SEA 21
3.1. Objectives of the SEA 21
3.2. Approach and Methodology 21
3.2.1. Methodology 21
3.2.2. The SEA Phases 23
3.3. Organization and Implementation of the SEA 33
3.4. Members of the SEA Working Group 36
Chapter 1: Project Summary and the Key Environmental Issues of PDP
VII 39
1.1. Project Implementing Agency 39
1.2. Project Summary 39
1.2.1. Summary of the PDP VII 39
1.2.1.1. Objectives of the PDP VII 39
1.2.1.2. Main content of the PDP VII 40
1.2.1.3. Development Viewpoints and Direction of the PDP VII 43
1.2.2. The PDP VII in Relation with Other National Development Plans 45
1.2.3. Core and Prioritized Projects and Programs in the PDP VII 59
1.2.4. General Approach of the PDP VII 61
1.3. Scope of Research of the SEA 63
1.3.1. Scope of Research of the SEA 63
1.3.1.1. Geographical Coverage 63
1.3.1.2. Timeline 67
1.3.2. The Key Environmental Issues of PDP VII 67
Chapter 2: Environmental Issues Related to the PDP VII 72
2.1. Brief Description of Environmental Conditions 72
2.1.1. Topographic, Geographic and Geological Conditions 72
2.1.2. Climatic and Hydrological Conditions 77
2.1.3. Oceanographic Conditions 86
2.2. The Past Environmental and Socio-economic Development Trends and the
PDP VII Baseline Situation 88
2.2.1. Current Situation and Development Trends of Natural Conditions 88
2.2.2. Environmental impacts 89
2.2.2.1. Loss of Forest and Biodiversity 89
2.2.2.2. Changes to Hydrological Regimes, Water Resource Management and
Downstream Salt Intrusion 96
2.2.2.3. Changes to Environmental Quality 98
2.2.2.4. Solid Waste and Toxic Waste 111
2.2.2.5. Natural Resources Efficiency and Conservation 112
2.2.2.6. Climate Change 115
2.2.2.7. Energy Security 119
2.2.2.8. Environmental Conflicts, Risks and Accidents 119
2.2.2.9. The Current State and Future Trends of Socio-economic Development 121
2.2.2.10. Livelihood 127
2.2.2.11. Community Health 132
2.2.2.12. Agriculture and Food security 133
Chapter 3: Environmental Impact Forecast for the PDP VII 134
3.1. The Relevancy of PDP VII to Environmental Protection Targets 134
3.2. Assessment and Comparison of the Proposed Development Scenarios 137
3.3. Environmental Impact Forecast for the Proposed Development Plan 139
3.3.1. Loss of Forest and Biodiversity 147
3.3.1.1. Hydropower Impacts on Forest and Biodiversity Resources 147
3.3.1.2. Thermal Power and Nuclear Power Impacts on Forest and Biodiversity
Resources 154
3.3.1.3. Transmission Line Impacts on Forest and Biodiversity Resources 155
3.3.2. Changes to Hydrological Regimes, Integrated Water Resource Management,
and Salt Water Intrusion 162
3.3.2.1. Changes to Downstream Hydrological Regimes 162
3.3.2.2. Assessment of Impacts on Water Resource and Integrated Water Resource
Management 165
3.3.3. Changes to Environmental Elements 171
3.3.3.1. Deterioration of Water Quality 171
3.3.3.2. Air Pollution 172
3.3.4. Solid Waste and Toxic Waste 178
3.3.4.1. Solid Waste 178
3.3.4.1. Toxic Waste 179
3.3.5. Efficient Use of Natural Mineral Resources 179
3.3.6. Climate Change 186
3.3.6.1. Greenhouse Gases 186
3.3.6.2. Impacts of Climate Change 187
3.3.7. Energy Security 189
3.3.8. Environmental Conflicts, Risks and Accidents 189
3.3.8.1. Environmental Conflicts over Shared Resources 189
3.3.8.2. Unpredictable Environmental Risks and Accidents 189
3.3.9. Social Impacts and Resettlement 192
3.3.9.1. Hydropower Impacts on the Economy, Society, and Local Communities 192
3.3.9.2. Thermal Power Impacts on the Economy, Society and Local Communities 194
3.3.9.3. Nuclear Power Impacts on the Economy, Society and Local Community 196
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3.3.9.4. Transmission Line Impacts on the Economy, Society and Local
Communities 197
3.3.9.5. Other Issues 197
3.3.10. Local Livelihood 199
3.3.11. Community Health 201
3.3.11.1. Water-related Diseases as the Result of Hydropower Development 201
3.3.11.2. Air-related Diseases as the Result of Thermal Power Development 202
3.3.11.3. Illnesses Caused by Electromagnetic Fields from High Voltage
Transmission Lines 207
3.3.12. Food Security 208
3.3.13. Impacts of Complementary Civil Work 211
3.3.14. Cumulative Impacts and Development Trends of Environmental Issues 212
Chapter 4: Stakeholder Consultation 220
4.1. The Organization of Stakeholder Consultation 220
4.1.1. Objectives of Stakeholder Consultation 220
4.1.2. Consultation Methods and Participants 220
4.2. Consultation Results 221
4.2.1. Consultation Results 221
4.2.2. Opinions of the SEA Working Group Regarding Recommendations of the
Stakeholders during the Consultation Process 225
Chapter 5: Recommendations on Preventative and Mitigation Measures and
Environmental Management and Monitoring Programs 226
5.1. Options to Prevent and Mitigate Negative Risks and Enhance Positive
Potentials for the PDP VII 226
5.1.1. Prevent and Mitigate Negative Risks by Changing the Project’s Plan,
Location and Scale 226
5.1.2. Mitigation Measures Involving the Organization of Implementation of the
PDP VII and Financial Mechanism 230
5.1.3. Mitigation Measures for Inevitable Adverse Impacts and Directions for
SEAs of PDP VII Sub-component Projects 234
5.1.3.1. Thermal Power Mitigation Measures 234
5.1.3.2. Hydropower Mitigation Measures 237
5.1.3.3. Nuclear Power Mitigation Measures 240
5.1.3.4. Transmission Line Mitigation Measures 240
5.1.3.5. Orientation for the SEAs of PDP VII Sub-component Power Projects 241
5.1.4. Mitigation Measures Using Scientific and Technological Advances 243
5.1.5. Regional Power Integration with Other ASEAN and GMS Countries 243
5.1.6. Other Mitigation Measures 245
5.2. Environmental Management and Monitoring Programs 246
5.2.1. Objectives of Environmental Management and Monitoring Programs 246
5.2.2. Environmental Management Program 246
5.2.3. Environmental Monitoring Program 246
5.2.4. Reporting Mechanism during Implementation 247
Chapter 6: Data Sources and Assessment Methodologies 250
6.1. Data Sources 250
6.1.1. Data and Reference Sources 250
6.1.2. Data Created by the Institute of Energy 251
6.1.3. Assessment of the Level of Detail, Reliability and Currency of the Data
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Sources 251
6.2. Methodologies 252
6.2.1. List of methodologies 252
6.3. Level of Detail and Reliability of the Assessment in SEA 255
6.3.1. Level of Detail and Reliability of the Assessment in SEA 255
6.3.2. Implications of Data Unreliability (Due to Objective and Subjective
Reasons) 256
CONCLUSIONS AND RECOMMENDATIONS 257
I. Conclusions 257
1. Contribution of the SEA to the PDP VII 257
2. Adverse Environmental Impacts of the PDP VII 259
II. Recommendations 260
1. Recommendations on Project Approval 260
2. Other Recommendations 261

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ACRONYMS

ADB Asian Development Bank

ASEAN Association of South East Asian Nations
MARD Ministry of Agriculture and Rural Development
MoNRE Ministry of Natural Resources and Environment
EP Environmental Protection
DSM Demand-Side Management
SEA Strategic Environmental Protection
EMF Electromagnetic Fields
EPA Environmental Protection Agency
EVN Electricity of Vietnam
FDI Foreign Direct Investment
GDP Gross Domestic Production
IZ Industrial Zone
MPI Ministry of Planning and Investment
ODA Official Development Aid
PDP Power Development Plan
PC People’s Committee
WHO World Health Organization

1
EXECUTIVE SUMMARY
The results presented in this Strategic Environmental Assessment (SEA) demonstrate the
importance of SEA in the PDP VII planning process. The SEA has provided a mechanism to
assess and understand the full range of potential risks associated with different types of power
development and transmission for people and the environment, both within the immediate vicinity
of power project site and beyond. It also provides a mechanism for identifying and assessing the
most effective mitigation and compensation actions, including actions to mitigate health,
economic, and social impacts, to reduce risks and to fully compensate for negative impacts when
they do occur. The SEA also has started to identify costs associated with human health,
environmental and social impacts, and mitigation measures, and internalize these costs into the
assessment of the economic feasibility of power development schemes. This is an approach that
balances economic development, environmental sustainability, and social equity that has never
been done before in the implementation of a master development plan for the electricity sector.
Thermal power constitutes by far the largest component of the power generation sector in
Vietnam, so it is no surprise that it is also the source of by far largest social and environmental
impacts. The most significant by far are the impacts of the atmospheric pollution resultant from
the combustion of the fossil fuels used, and especially of coal. The consequences of the four main
pollutants (CO2, SO2, NOx and PM) are three main impacts: acidification, human health, and
climate change. Under the plans in PDP VII, CO2 and PM releases will increase more than ten-
fold during the PDP VII period up to 2030 and those for SO2 and NOx will increase several fold.
The impacts of these atmospheric pollutants will be severe and widespread. Vietnam is also in the
list of the most vulnerable countries to global climate change with more than 10 million people
living in the mountainous, coastline and delta areas, which are vulnerable to negative impacts of
climate change. Acidification, affecting both soil and water quality, is spreading and
increasingly affecting the Mekong river basin. Million people will be affected at different and
increasing levels by abnormal weather phenomena and the risks of climate change. The number
of people exposing to air pollutants at different levels is increasing and contributing to the rises
in the incidence of health problems such as respiratory diseases and other diseases. The impacts
on human health from atmospheric pollutants associated with thermal power plants are
particularly severe in large cities where there are many economic activities and where the
existing ambient air quality is poor. These impacts have been assessed and valued at about
US$9.7 billion per annum by 2030 unless actions are taken to reduce the levels of of atmospheric
pollutant releases from, in particular, coal-fired power generation.

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Hydropower is the second largest source of power generation in Viet Nam. It has the potential to
produce a number of adverse social and environmental impacts, including the loss of land and
disruption of sensitive ecosystems, the displacement of people and effects on the culture and
livelihoods of communities not physically displaced, disruption to hydrological systems and
ecosystems that depend on them and other effects. With hydropower, most of the social and
environmental impacts associated with the schemes in the power plan are: impacts on displaced
people, inundation, forest clearing, and changes to river ecosystems. The total area that will be
submerged in hydropower schemes in PDP VII is 25,133 ha. A total of 61,571 people will be
displaced for the construction of reservoirs. Over 90% of the displaced people are ethnic
minorities. There will be bigger loss of forest, ecosystem fragmentation, and especially impacts
on protected areas and areas of biodiversity significance. There are 10 sites of biodiversity value
where the risk of fragmentation is assessed as significant. The Dak Mi 1 and Dong Nai 5 schemes
will have severe impacts on areas of biological sensitivity, which have international biodiversity
significance.
One recognized positive impact of hydropower is improvement to dry season water flows, leading
to benefits in agricultural production over whole river basins but several river ecosystems are
vulnerable to degradation in the immediate vicinity of hydropower schemes. The impacts of
hydropower development are complex and widespread, but many can be minimized depending on
how the schemes are planned and developed and more effective and sustainable approaches to
hydropower have the potential to produce the benefits such schemes generate without many
negative impacts.
Nuclear power will be a new development for Viet Nam. It is a source of power generation that
is characterized by risks that are low probability but extremely high in impact if they do occur:
reflecting the extreme hazards associated with the use and management of radiological materials.
It is essential that Viet Nam develops the capabilities and management systems to handle
radiological materials before nuclear power development starts. There are additional predicable
impacts that are a cause for concern. These impacts are associated with the use and release of
cooling waters, especially when the nuclear power stations locate in areas of biological
sensitivity. The site selection of the power station is the key issue here: any locations in the
proximity of sensitive or high value ecological areas must be avoided and the possible impacts of
cooling water on riverine and marine ecosystems must be carefully assessed.
Renewable energy impacts will be extremely small and confined to some potential disruption and
aesthetic effects in the immediate vicinity of wind, solar or mini-hydro schemes. These low
impacts reflect the low level of renewable energy development in the PDP VII base case and the
inherent nature of these technologies that are more socially and environmentally benign than other
forms of power generation.
Transmission line investments in PDP VII will represent a major but necessary expansion of
the transmission system. There will be adverse impacts, especially associated with the clearance
of land along the routes of the transmission lines. The transmission line expansion plan in PDP
VII will result in the clearing of 14,000 ha of forest, including 7,739 ha of rich and medium
forest. The total resource value of the forests cleared would be around US$218 million. The
transmission lines will pass through a total of 59 protected areas (Pas) and 39 key biodiversity
areas (KBAs), with 3,387 ha cleared in Pas and 2,297 ha in KBAs. This has potentially negative
ecological impacts because of the fragmentation of habitats, with several areas likely 3to be
divided into several fragments that could potentially compromise the integrity of high value
biodiversity areas.
1. Strategic Environmental Issues
The contribution of the electricity sector to economic development demonstrates that the level of
power development planned in PDP VII is essentially a desirable one in terms of the least cost
means to ensure that Vietnam’s future power needs are met. This is true even where the full range
of social and environmental costs is internalized into the economic analysis of power generation
and power grid, as the full costs of alternative generation sources are even higher. As such, the
significance of hydropower in contributing to overall national development has been
demonstrated.
The SEA also suggests that power development can contribute to development in another way if
appropriate measures are taken: it can be a catalyst to the development of the economies of
remote locations inhabited by poor and marginalized people. Therefore, the planning of power
development needs to include measures to take advantage of local development opportunities.
Where this is the case, power development can provide significant benefits to local
communities through improved access to external markets, new livelihood opportunities and
better access to a range of services.
There are many environmental issues related to the power plan but within the scope of the SEA
analyses focus on several main strategic issues as follows:
Loss of forest and biodiversity as the result of unsustainable development of hydropower schemes
and transmission lines: The most dangerous threat is fragmentation and breakdown of the
ecosystem. There are potential impacts on ecosystems, biodiversity, forest resources, and natural
flows. The risks of such impacts can, however, be significantly reduced through the adoption of
effective anticipatory mitigation measures, with the cost of these measures internalized into the
costs of power development. Such measures require much closer links to other agencies
responsible for agriculture, fisheries, protected areas, etc.

Changes to hydrological regimes, integrated water resources management and lower river basin
salt intrusion: The present management regimes are in general single purpose: to maximise
power generation, which can cause big losses. In every case, it is necessary to take into account
common interests such as flood control, water supply for agricultural activities, and the need to
ensure minimum environmental flows if serious downstream impacts on ecosystems integrity are
to be avoided. The analysis also demonstrated the potential benefits in terms of flood protection
and improvements to dry season water availability that could be accrued if more effective
multipurpose management regimes are adopted.
Changes to quality of environmental elements: the consequences of atmospheric pollution are
three main impacts: (i) greenhouse emissions and climate change; (ii) water pollution and
acidification of soil (due to acid rain); (iii) human health impacts.

Radioactive accident in nuclear power development can happen in any stage of the full
production process from uranium prospecting, mining, and enrichment to combustion by nuclear
reactions to generate electricity. The post-power production stages including interim storage,
reprocessing to waste treatment and waste disposal can also potentially cause radioactive
4
accident.

Nuclear power production in Vietnam only involves power generation from nuclear reactors and
storage and treatment of radioactive waste from electricity generation. Main environmental
impacts from nuclear power production include: (i) nuclear safety issues during the power
production process, which is extremely important because nuclear accidents are usually very
serious; (ii) radioactive waste management; (iii) impacts on ecosystems and biodiversity,
especially from the nuclear power project located near Nui Chua national nature reserve and other
projects that are located in areas with high coral reef density; and (iv) social impacts (number of
families/local residents evacuated, resettlement issues, impacts on community health, consensus
of local people).

Power production from renewable energy is a form of “clean” power production. However, it also
has some environmental impacts that need to be considered and assessed such as: (i) changes to
landscape and architecture; (ii) downstream sedimentation and erosion; (iii) changes to land use
plan.

Solid waste and toxic waste: is a cause of soil, water and air pollution, and a threat to the
ecosystems, especially toxic waste and nuclear waste. Treatment for these kinds of waste often
costs a lot of money and takes a lot of efforts. Large quantities of these kinds of waste also require
large land areas for storage, which is challenging in the context of limited land resources.

Efficient use of natural mineral resources: Natural mineral resources are limited and cannot be
renewed. These include water, coal, gas, limestone, forest resources and biological resources.
There is an urgent need for an appropriate plan for natural mineral resources management for the
benefits of the Vietnamese people, and to reduce the chance of Vietnam being reliant on the
international fuel market. This plan also aims at preventing crisis in case of the exhaustion of
water resources, and forest resources and services, and avoiding damages to natural scenery.

Climate change and acidification impacts are the consequences of air pollutants from thermal
power plants, especially coal-fired thermal power plants. Parts of the costs of these impacts will
are health care for affected people, and improvements of infrastructure. Mitigation measures for
these impacts include reforestation, establishment of green parks where possible, and
maintenance and preservation of ecosystems, as discussed in Chapter 3.
Coal ash reuse can help to mitigate negative impacts on the environment, to save land and other
resources, and to generate additional incomes and reduce the pressure on investors of thermal
power projects to find solutions for coal ash. However, it is important to pay attention to the
proportion of heavy metal in coal ash when reuse.
Energy security is the main factor that controls the economy. The risk of primary energy
exhaustion was forecasted in the development plans of various sectors. According to these plans,
Vietnam is likely to be heavily dependent on the availability and price of primary energy in the
international market by 2017.

Environmental conflicts, risks and accidents are becoming more and more urgent and severe due
to over exploitation of natural resources, especially water, forest and mineral resources, and
conflicts of interests over natural resources. The scale and level of conflicts vary. These conflicts
5
can be between people, communities, localities, and nations.

The displacement of local communities is a key and controversial issue for power development,
especially hydropower development. It is an inevitable consequence of economic development in
many localities. The mitigation package entails additional costs and requires political will and
more effective coordination amongst relevant stakeholders. However, it is achievable if and when
the sector recognizes its obligations to demonstrate social responsibility and the need to establish
better relations with local government institutions and the communities in the areas where dams
are built.

Livelihood is an issue for displaced people who lose their homes and land to power development
projects. This is one of the impacts on local communities.

Community Health: Atmospheric pollution and human health are the main impacts of thermal
power development, which are mainly caused by the combustion of fossil fuels. These impacts
are intensified when thermal power plants are located in areas where the ambient air quality is
already poor, such as in Ho Chi Minh City and the surrounding areas and the Red River Delta.
New power projects planned for these areas will have to bear higher payments for environmental
services to meet environmental requirements and to reduce impacts on human health.
Food security: Land area for agricultural production is decreasing due to land acquisition for
other purposes and in this case, for power development. As more than 70% of the population of
Vietnam work in agriculture, the impacts this has on agriculture and food supply are obvious.

2. Recommendations
Grid interconnection: Vietnam is a densely populated country. Conflicts over land and the
associated impacts have always been problematic. In general, the potential generation capacity in
neighboring countries brings with it less environmental and social impact per kWh because
fewer people are affected. Therefore, it makes regional, economic and environmental sense for
Vietnam to pursue with vigor grid interconnections with Laos, Cambodia and China at locations
that offer favorable conditions for doing so. Vietnam is currently doing this but it needs to be
encouraged and developed further.
Institutional harmonization to prepare for regional power trade and further integration
between countries in the GMS, will eventually enable capacity planning and balancing of a much
larger system, which, as the GMS energy strategy “Building a Sustainable Energy Future”
states, brings with it significant efficiency gains. This gives the opportunity for lower prices and
lower environmental impacts since expensive and dirty marginal thermal power can be reduced.
Natural resources efficiency and conservation: Readjustments are proposed to the plans for
exporting coal, oil and gas to make sure that there will be enough supply for domestic use in the
near future.
Clean Development Mechanism to replace coal with renewable energy
Internalization of external costs of power technologies in PDP VII optimization modeling:
the differences in externalities between different technologies suggest that the optimization
represents an optimum only for the electricity-producing sector. If this can be done it will
produce results that are closer to a social optimum.
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Recommendations on Policy and Regulatory Changes
Air pollution and climate change related: best solution is to minimize the number of coal-fired
thermal plants in the future through supporting measures to improve the effectiveness of the
energy saving and efficiency program and to increase the use of renewable energy as an energy
source to meet the national targets.
This solution will ensure a reduction in air pollutants and CO2, which will consequently reduce
acid rain and its effects on crop yield, the risk of abnormal weather phenomena and finally the
environmental cost that will lead to a reduction in project investment.
Water resource management: It is recommended that the 11 procedures for multi-reservoir
management for 11 river basins to be completed, as directed by the Prime Minister, and based on
lesson learned from the existing management procedure. It is also necessary to study the multi-
purpose reservoir management approach (including of the existing schemes) to assess the
potential of participatory management of the electricity sector in the new river basin management
systems in Vietnam.
It is recommended that a more detailed and thorough assessment of the costs and benefits of
multipurpose management should be undertaken (including distributive effects) and that new
reservoir management regulations should be issued for both existing and future reservoirs to
reflect the benefits of multi-purpose management within an integrated water resources
management context and based on cumulative river basin effects where multiple reservoirs exist.
Implementation capacity: It is recommended that further capacity development takes place in IE,
as well as MoIT and other agencies associated with them in planning, to strengthen their capacity
to execute an SEA independently and with no external support.
Data and statistic system: Steps need to be taken to systematically assess and address data gaps
so that future SEAs can provide more rigorous analyses.
Recommendation about financing SEA: The budget for the SEA from the government was limited
and inadequate to do the job.

7
ACKNOWLEDGEMENT
The Strategic Environmental Assessment of the national Power Development Plan for the period
2011-2020 with vision to 2030 (PDP VII) contains the essential analyses and assessment about
environmental and social impacts of PDP VII. The SEA provides a basis for the approval of the
strategic power development plan for the next ten years with a vision to the ten years after that. The
analyses in the SEA reflect a good understanding of environmental and social issues in planning
important economic sectors of Vietnam in the near future to achieve sustainable development.
Many complex issues were selected for analysis, which required a high level of capacity and a
new way of working which changed the habit of disregarding environmental issues in planning in
Vietnam. The results reflect great efforts of the SEA working group and long lasting support of
experts and relevant agencies. The SEA and PDP VII were both prepared by the Institute of
Energy as assigned by the Ministry of Industry and Trade. The Institute of Energy established a
working group consisting of experts in different specializations to take care of these tasks.
Members of the working group are Associate Prof. Nguyen Thi Ha, Dr. Le Thu Hoa, Mr. Bach
Tan Sinh, Mr. Pham Quang Tu, Mr. Tran Quang Lam and Mr. Nguyen Trung Kien. The group
was headed by Ms. Nguyen Thi Thu Hien and worked under the supervision of Mr. Pham Khanh
Toan, Director of the Institute of Energy and person in charge of PDP VII, and Mr. Nguyen Anh
Tuan, Vice Director of the Institute of Energy, second in charge of PDP VII and also a member of
the working group. Input data for the SEA came from the Institute of Energy, electricity
consulting companies, Electricity of Vietnam, National Petroleum Corporation, Vietnam Coal &
Mineral Resources Corporation, Forestry Bureau, Institute of Strategic Development (under
Ministry of Planning and Investment), Institute of Ecology and Biological Resources, Ministry of
Natural Resources and Environment, and many others. A group of international experts
participated in the preparation of the SEA. They are Mr. Sumit Pokharel from the ADB’s
Environmental Operation Centre (EOC), Prof. John Soussan (group leader) from the Stockholm
Environment Institute, Dr. Romeo Pacuadan and Mr. Lothar Linde. The international experts
provided great support during the preparation of SEA. Together with the Institute of Energy, they
are responsible for the results presented in this SEA.

The SEA provides a basis for implementing the national power development plan in a sustainable
manner whilst meeting the energy demands for economic development in the near future. It also
confirms the close relation between electricity sector development and environmental and social
issues, which were only regarded as “secondary issues” in the previous plans. In the SEA,
environmental and social costs are included as part of the investment for power development.
This has been clearly reflected in the recommendation part of the SEA to inform decision makers
about the additional costs that should be taken into account while planning investment for power
development.

During the SEA development process, 2 national conferences were organized with the
participation of about 70 experts from various ministries, relevant government management
agencies, and businesses in the electricity sector, consulting companies, and provincial
Departments of Natural Resources and Environment and Departments of Industry and Trade. The
provincial departments played an important role in making the SEA consultation a success. They
provided technical information and data, as well as their expertise opinions to complete the SEA.
8
INTRODUCTION

1. Background and Context of the National Power Development Plan

Electricity is the most important energy source for socio-economic development and national
energy security in the present and future. The electricity sector has achieved rapid growth and
relatively incredible success in realizing its responsibility of supplying electricity for the socio-
economic development activities of the country. The total capacity of all power stations is over
20,600 MW in 2010, a 3.2 time increase in ten years and a 1.78 time increase compared with in
2005. The total amount of electricity produced in 2010 was over 100 billion kWh, a 3.7 time
increase compared with in 2000 and a 1.88 time increase compared with in 2005. With this high
growth rate, the electricity sector provides a significant contribution to socio-economic
development and life improvement of Vietnamese people.

However, the global financial crisis has affected many aspects of the industry, export, and
commerce. Domestic and foreign investment to the production and service sectors has slowed
down. The consequence is an undesirably slow economic growth rate and the demand for
electricity increases at a lower rate than expected. The average electricity demand increase has
been at 13.6% per annum for the last 4 years, which is lower than the low case in PDP VI (15%
per annum). Demand for electricity is now back on the track of fast increase. It is expected that
electricity demand in 2010 will be over 15 %. In 2011, it will be equivalent to the rate predicted
for 2010 in the base scenario of PDP VI.

There are also short-comings in development activities in the electricity sector: a review of the
2006-2009 period revealed that the total capacity of all projects in this period was about over 9,500
MW, which is only 65.3% of the target of 14,581 MW in PDP VI. Transmission line development
also only achieved 60% of the target. Although the demand for electricity was lower than expected
during this period, the poor performance of the electricity sector in power generation and
transmission line development has resulted in a shortage in power supply during the hot months
when the water level in reservoirs was lower than usual. This has affected production and people’s
life in the last June and July. If remedy actions are not in place, this situation is likely to persist in
the coming time.

Lessons learnt from the neighboring countries (Thailand and Indonesia) show that it is necessary to
evaluate power demand increases regularly to adjust plans and mobilize power to ensure a safe,
adequate and reliable supply for the economy. The Vietnamese economy is in the stage of relatively
fast development, and facing quite many challenges in joining the regional and the world economy.
Demand for electricity will continue to increase. However, there is a level of instability that cannot
be reflected in power demand forecast. That is the reason for the Government and the Ministry of
Industry and Trade to conduct evaluations on power demand as well as to restructure electricity
consumption to have a better control over the power supply and the progress of power generation
and transmission line development.

As directed by the Vice-Prime Minister and head of the Government Steering Committee for PDP
VI, the Ministry of Industry and Trade has assigned the Institute of Energy with the task of
9
preparing the next national power development plan for the period of 2011-2020 with a view to
2030 (PDP VII). This task is officially stated in Document No. 11693/BCT-NL dated 9th
December 2008, regarding the preparation of PDP VII. According to this Document, the
preparation of PDP VII needs to conform to Decision No. 42/2005/QD-BCN dated 30th December
2005, on contents and order of, and procedures for the formulation and evaluation of electricity
development planning. It is stated in this Decision that “National Power Development Plan
provides the objectives, direction, and policy mechanism for the electricity sector to improve
power generation and power grid to ensure a safe, adequate, and reliable power supply for
economic sectors, social welfare, people’s life and national security, on the basis of energy saving
and efficiency”.

Using on the same methodology and learning from the experiences and lessons of PDP VI, PDP
VII was developed to assess the power demand increases in the last few years, and to forecast
socio-economic development for the period 2011-2015 with a view to 2020 and 2030. PDP VII
also took account of the draft resolution of the Party meeting XI to forecast future power demand
for inclusion in power development scenarios.

Power generation in Vietnam relies on three main primary energy sources, which are hydropower,
coal, and oil and gas. Electricity is distributed through the high voltage transmission line system
running from the North to the South of Vietnam. According to forecast to 2025, the power
generation source mix will be balanced with a higher proportion of thermal power and a reduced
number of hydropower plants.

The SEA of PDP VII is a mandatory requirement to meet national regulations on planning for all
sectors. It is also an important mechanism to improve the overall scope and effectiveness of the
PDP VII planning process. In particular, it is the means through which issues, such as
environmental and social issues, that have not been given sufficient attention can be fully
integrated into the preparation of the PDP VII, which aims at achieving sustainable power
production for national economic development. In other words, major costs and benefits
relating to environmental and social impacts that have traditionally been treated as “externalities”
that are not taken into account in the economic analysis of different power sector options are now
considered as part of power project investment. The SEA is the means through which these costs
and benefits can be assessed and, where technically possible, internalized into the PDP VII
economic analysis of different power supply costs and benefits.

This SEA is the first of a PDP to consider the full range of environmental and social issues and
also the first that was prepared accordingly with the current SEA guidelines as reflected in
Circular No. 05/2008/TT-BTNMT dated 8th December 2008 by the Ministry of Natural Resources
and Environment. The SEA not only provides assessment of environmental impacts but also
expresses a commitment to environmental protection, through the main contents and follows:

Chapter 1: Project Summary and the Key Environmental Issues of PDP VII
Chapter 2: Environmental Issues Related to the PDP VII
Chapter 3: Environmental Impact Forecast for the PDP VII
Chapter 4: Stakeholder Consultation
Chapter 5: Recommendations on Preventative and Mitigation Measures and Environment
Management and Monitoring Programs.
10
Chapter 6: Data Sources and Assessment Methodologies
Conclusions and Recommendations

The study of and assessment in this SEA were conducted in accordance with the Strategic
Environmental Assessment Guidelines, which was completed by the Department of Appraisal and
Strategic Environmental Assessment, under the Ministry of Natural Resources and Environment,
in January 2008, within the scope of the SIDA SEMLA program. This Guidelines was issued in
October 2008.

The assessment and consultation in SEA focused on 12 main socio-economic and environmental
issues of concern for the sustainable implementation of PDP. The conclusion of this SEA is that
the original plan for power development, which proposes an increase in thermal power production
from the existing 10.5% to 56% in the power generation source mix in 2030, is a unsafe and
unsustainable plan considering that fossil fuel is the biggest source of air pollutants and fossil fuel
resources are running out. Taking into account the importance of this issue, the SEA also
recommends solutions to reduce dependency on coal-fired thermal power production. This has been
recognized as the biggest success of this SEA.

2. Legal and Institutional Framework for the SEA

The development of a strategic plan for the development of the power sector, which takes social
and environmental issues in as integral parts of the planning process, needs to be based on the wider
policy and institutional environment of the contemporary Viet Nam. There are a number of key
pieces of policy and legislation that directly affect an SEA of the power sector in Viet Nam. This
section reviews this policy, legal and institutional framework within which an SEA of PDP VII
must take place. It identifies a number of key characteristics that the SEA will possess to ensure it
conforms to legislative requirements and will be policy relevant.

2.1. Legal Framework

There are many existing laws, regulations and legal documents that are related to environmental
protection and management. The SEA of PDP VII was based on the following main legal
framework:

2.1.1. Laws and Policies Related to Environmental Protection

The Law on Environmental Protection (LEP) 2005: This law was amended and replaced the
1993 Environment Protection Law. There are several articles of LEP 2005 that address SEA
issues:
- Article 14 identifies 6 areas where SEA should be applied. It is required that SEA shall be
applied in preparing “National development strategy/plan of sector at national level”. Therefore, it
is required that SEA shall be applied for PDP VII for the period 2011-2015 with vision to 2030.

- Article 15 specifies the responsibility and timeframe for SEA. Any agency expected to prepare a
strategy/plan according to Article 14 of LEP are also responsible for preparing an SEA. An SEA
is an important part of the strategy/plan and needs to be prepared at the same time as the
strategy/plan.
- Article 16 states that an SEA report shall cover five specific issues: 11
(1) Briefing plan/project objective/scope that relating to environment.
(2) Outline natural, economic, social and environment conditions related to project.
(3) Forecast possible negative impacts to environment
(4) Identify data sources and assessment approach.
(5) Proposing environmental protection measures in project implementation.

This can be taken as a mandatory minimum in the development of any SEA but should not be
regarded as defining the limits of an SEA assessment.

- Article 17 provides a procedure for appraisal and approval of SEAs. It states that MoNRE shall
organize an SEA appraisal committee for stategies/plans that are to be approved by the National
Assembly, Government and Prime Minister; that ministries establish SEA appraisal committees
for projects approved by them; and Provincial People’s Committees set up SEA appraisal
committees for proejcts approved by Provincial People’s Councils.
- LEP 2005 has provisions that state that renewable energy including hydropower is encouraged and
government will have privilege treatments (tax, credit, land rent) to support renewable energy
projects (article 33). Objectives on renewable energy development are clear as they focus on:

• Increasing ratio of renewable energy in total energy sources.

• Contributing to energy security.
• Reducing climate change.
• Integrating with poverty alleviation.
The Law emphasizes the important role of an SEA, confirming that the SEA appraisal report is a
precondition for strategy/plan approval.

LEP 2005 legislation

1) Decree No. 80/2006/ND-CP dated 9 August 2006 by the Government on LEP 2005
implementation guidelines.
2) Decree No. 21/2008/ND-CP dated 28 February 2008 by the Prime Minister, amending and
supplementing a number of articles of the Government’s Decree No. 80/2006/ND-CP,
detailing and guiding the implementation of a number of articles of the LEP 2005.

3) Decree No. 140/2006/ND-CP dated 22 November 2006, promulgating on environmental

protection in preparation, review, approval and organization for conducting to strategies,
schemes, plans and development projects.

4) Circular No. 05/2008/TT-BTNMT dated 8 December 2008 by MoNRE, guiding strategic

environmental assessment and environmental protection commitment. This is the main
guiding legal document for the SEA of PDP VII.

5) Circular No. 06/2007/TT-BKH dated 27 August 2007, guiding the implementation of the
Government Decree No. 140/2006/ND-CP dated 22 November 2006, providing for
environmental protection in the formulation, evaluation, approval and organization of
implementation of development strategies, plannings, plans, programs and projects.

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2.1.2. Laws and Legislation on Water Resources
The 1998 Law on Water Resource has focused on water resource management and exploitation
for consuming purposes by river basin.

Hydro power projects do not consume water like agricultural and industrial activities but only use
water to generate power then return water to rivers. However, the impacts of hydropower are
assessed as significant. Article 29 hydropower construction projects shall follow river basin (water
resource management) plan and environmental protection regulations. It is interesting to note that
the law requests that water management in hydropower shall follow water operational procedure
approved by an authorized institution (Article 29). This means that in special cases, the priority is
given to water for other purposes (flood control, water supply to agriculture for example) but not
for power generation.

In addition to the Law on Water Resources, directly relevant legislation includes:

1) Government Resolution No. 179/1999/ND-CP dated 30 December 1999, on the

implementation of the LWR;
2) Decision No. 26/2000/PL-UBTVQH10 dated 24 August 2000, on storm and flood control;
3) Decisions No 37, 38 and 39/2001/QD/BNN-TCCB dated 9 April 2001, by the Minister of
Agriculture and Rural Development on the establishment of River Basin Planning
Management Organisations (RBO) in the Lower Mekong, Dong Nai and Red River basins;

4) Decree No. 32/2001/PL-UBTVQH10 dated 4 April 2002, on exploitation and protection of

hydraulic works, effective 1st July 2001.
5) Decree No. 149/2004/ND-CP dated 25 June 2004 by the Government, on regulation on
licensing of water resources exploitation, extraction and use and wastewater discharge in
water sources.

6) Decree No. 134/2005/ND-CP on regulation on sanction of violation in the field of water

resources.

2.1.3. Laws and Regulations on Environmental Preservation and Protection

The 2009 Biodiversity Law intends to legalize the payment for environmental services (PES)
provided by forests, including water supply for hydropower stations.

Law on Natural Resource Tax, 2009.

Fisheries Law, 2003.
Law on Forest Protection and Development, 2004.
Land Law, 2003
Law on Natural Resources, 1996 and Law on Cultural Heritage, 2001.
Legislation:
1) Decree No. 23/2006/ND-CP dated 3 March 2006 by the Government, on implementation
of Law on Forest Protection and Development, defining types of forest for protection.
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Special-use forests (SUFs): In total, Vietnam has established 128 SUFs covering an area
of 2.5 million ha (7% of the national land area). SUFs are classified into four management
categories: (1) national parks, (2) “nature conservation zones” including nature reserves
and species-habitat conservation zones, (3) landscape protection zones (formerly cultural
and historical sites) and (4) forests for scientific research or experimentation.

2) Decree No. 32/2006/ND-CP, on management of rare and valuable fauna and flora.
3) Decree No. 27/2005/ND-CP dated 8 March 2005 by the Government, on implementation
of several articles of Law on Fisheries, providing regulations on some protected areas as
follows:

Marine Protected Areas (MPA): including (i) marine parks, (ii) marine species and habitat
conservation areas and (iii) aquatic resource reserves. In addition to the Nha Trang Bay and Cu
Lao Cham MPAs which were established in 2001 and 2005, further 13 MPAs are proposed for
formal establishment and recognition by 2015.

Wetland Conservation Areas (WLAs): 86 wetlands are recognized to be of national importance

and potential PAs. Yet, none have been formally designated as “wetland conservation areas” and
more than half have already been listed as either SUFs or MPAs - 23 are SUFs (or within them),
14 are proposed SUFs and a further seven are proposed as MPAs.
One covering the Can Gio mangrove forests is a Biosphere Reserve established by the Ho Chi
Minh City People’s Committee. Two others - Xuan Thuy National Park on the Red River Delta,
and the Nam Cat Tien swamp complex are recognized as Ramsar Sites.
Table 1 summarizes the current institutional arrangements for planning and management of the
national PA system. Apart from seven national parks and one MPA (Truong Sa), all PAs are
managed or proposed for management at local government level. MARD is responsible for the
development of the national system of SUFs and the development of a national system of Marine
Protected Areas (MPAs) and inland wetland protected areas. MoNRE has responsibility for
defining the detailed institutional arrangements for wetland conservation areas under a National
Wetlands Programme.

The management boards of the PAs are considered the “owners” of these areas. There are still
40% of the PAs without management boards due to budget limitation and mostly because these
areas have not been officially recognized as PAs.

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Table 1: Management Responsibilities for PAs

PA types Central level Provincial level Site level

SUFs MARD is responsible for PPCs oversee the Management

strategic planning, policy management of boards are
formulation & other SUFs, either responsible for
supervision & technical directly or via line day-to-day
assistance departments management of
most SUFs
MARD oversees the
management of seven Various
national parks arrangements for
other SUFs

MPAs and MOFI is responsible for PPCs will oversee Management

aquatic strategic planning, policy the management of boards will be
resources formulation & technical most MPAs responsible for
reserves assistance day-to-day
management
Institutional
arrangements are not yet
finalised

MOFI will have direct

responsibility for Truong
Sa MPA

Wetland MONRE is responsible Detailed Detailed

Conservation for strategic planning institutional institutional
Areas arrangements are arrangements are
Institutional not yet defined not yet defined
arrangements for WCA
management are not
defined

4) Decree No. 119/2006/ND-CP dated 16 October 2006, on organization and operation of

forest protection services.

5) Decree No. 109/2003/ND-CP dated 23 September 2003 by the Government, on the

conservation and development of wetlands. This is the first time wetland is officially
recognized as a natural resource. It was the first time that “wetlands” as a category of
natural systems was recognized in a legal instrument. It assigns responsibilities for wetland
management to various Ministries and other government agencies. MoNRE is responsible
for wetland establishment and defining the policy framework for their management.
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6) Decision No. 186/2006/QD-TTg dated 18 August 2006 by the Prime Minister, on forest
protection mechanism. This Decision allows management board to “permit the rational
use of natural resources in SUFs....“subject to prior approval of the PPC. It specifies that
PA management boards are allowed to lease forest environment to institutions for
developing ecotourism. Management boards are also given discretion to use funding
available for staff salaries to contract local households to undertake forest protection work.

7) Decision No. 192/2003/QD-TTg dated 17 September 2003 by the Prime Minister, on

approval of the management of the PA system in Vietnam until 2010. It highlights the
buffer zone issue as one requiring urgent and systematic attention. It directs the appropriate
authorities to “clarify the relationship between buffer zones and PAs by developing
regulations governing operations based on the principles of collaboration; regulate the
benefits and obligations of each party involved in managing buffer zones, especially ethnic
communities located close to or in PAs; and develop long term investment plans for buffer
zones”. The Decision also calls to “define the specific role of PA management boards in
socio-economic development in buffer zones” and to “supplement and complete
procedures and policies for development in buffer zones.”

8) Decision No. 08/2001/ND-TTg dated 11 January 2001 by the Prime Minister, on the
management mechanism of SUFs, protection forest, and natural forest used as
production forest. This Decision defines “buffer zones as forest, land or wetland areas
bodering national parks or nature reserves, helping to prevent or alleviate encroachment to
special use forests. All activities in the buffer zones shall aim at supporting the
conservation, protection and management of special use forests, and limiting people going
into the buffer zones...”

9) The National Conservation Strategy 1986 and the Biodiversity Action Plan 1995 proposed
conservation policy initiatives and identified key actions towards the establishment and
management of the PA system.

10) The Conservation and Sustainable Development of Wetlands Action Plan for the period
2004-2010, approved by MoNRE in April 2005.
11) Decree No. 120/2008/ND-CP dated 1 December 2008 by the Government, on river basin
management.
12) Decree No. 99/2010/ND-CP dated 24 September 2010 by the Government, on payment
for environmental services.

2.1.4. Legislation Related to Resettlement

Land Law 2003.

1) Decree 181/2004/ND-CP, on provisions for implementing Land Law. Article 36 regulated

that Government taking back land from other stakeholders to serve for national security
purpose, national and communal benefit.

2) Decree 197/2004/ND-CP from December 2004 on "compensation, assistance and

resettlement when Government taking back the land" regulates compensation for local
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people when Government taking back their land. According to this Decree, when
Government used the land from people for national security and national benefit purposes,
the compensation for those who effected including: land (resident, agriculture and non-
agriculture...), properties over land (houses, graves, cultural constructions, animals, trees
and others), resettlement and other assistance like job recreation and education. The
Decree also regulates that the conditions of the resettlement area needs to have enough
necessary infrastructures and have to be better than the former area.

In cases where projects affect a whole community and multiple aspects of people life such as
economic, social, traditional culture, compensation arrangements need to be decided by Central
Government or Assembly case by case. Article 47 of the Decree states that in case the
Government has implementing the right compensation and resettlement policy but the individual
or households still do not follow, these families will have to be subject to compulsory resettlement
according to the Law.

3) Decree No. 69/2009/ND-CP dated 13 August 2009 by the Government, on land use
planning, land prices, land acquisition, compensation, support and resettlement. This
Decree marks a step forward in compensation and resettlement through a negotiation
mechanism between investors and affected people.

2.1.5. Laws and Legislation on Energy and Electricity

The 2004 Electricity Law provided clear provisions for power development planning and
investment, and energy saving, as well as the rights and responsibilities of individuals and
organizations to “follow the laws and regulations on environmental protection in power
generation”. It also included provisions for electricity users, protection of electricity equipment,
and power safety. This Law is applied for all organizations and individuals involved in power
generation, trade, consumption, and other related activities. The 2004 Electricity Law1 has
focused more on electricity market, and not addressed in detail environment protection or
hydropower development. But it has confirmed the policy on accelerating renewable energy
development and considering environment protection in electricity development (article 4), and on
the special privilege policy on investment, tax, electricity price to renewable energy projects
(article 13).

Law on Energy Efficiency and Conservation (EEC) on 7/6/2010 provided legal guidelines for
the sector development in the future. This law aims to facilitate long-term development in the
context of Vietnam where power demand increases more than double the economic growth rate,
which is very unsustainable for the natural resources and the economy. The Law recognizes that
the electricity sector is usually less efficient than international standards due to old-fashioned
equipment and ineffective operation systems, which contribute to environmental pollution and
climate change. Article 6 of the Law focuses on SEA with the following details:

Energy strategies/plans need to meet the following requirements:

a) A safe and stable supply of energy; rational and efficient use of energy/power sources.

1
Electricity Law. National Assembly, decision 28/2004/QH11, December 2004 17
b) Energy demand-supply forecast needs to fit in with socio-economic development
strategies, plans and programs; there should be a balance between the coal, oil and gas,
and electricity development plans and development plans of other forms of energy.
c) Accelerate efficient and rational use of renewable energy, prioritize clean energy
development and increase renewable energy in power generation.
d) Develop and implement a roadmap for the manufacture of energy saving equipment,
machinery and construction material.
The Prime Minister himself directs the implementation of the energy efficiency and conservation
strategy/plan/program.
The 2008 Law on Nuclear Power and Decree No. 50/1998/ND-CP dated 16 July 1998 by the
Government, on radio safety and control.

2.1.6. Other Legislation

- Resolution No. 41-NQ/TW dated 15 November 2004 by the Polit-Bureau, on environmental
protection during the period of industrialization and modernization of the country.
- Decree No. 59/2007/ND-CP dated 09 April 2007 by the Government, on solid waste
management.

- Directive of the Secretariat, which reinforced the implementation of Resolution No. 41-NQ/TW
dated 15 November 2004 by the Polit-Bureau on environmental protection during the period of
industrialization and modernization of the country.
- Decision 192/2003/QD-TTg dated 17 September 2003 by the Prime Minister, on approving the
Management Stategy for a Protected Area system in Vietnam to 2010.
- Decision No. 22/2006/QD-BTNMT dated 18 December 2006 by MoNRE, on the compulsory
application of Vietnam environmental standards.

- Decision No. 1855/QD-TTg dated 27 December 2007 by the Prime Minister, on approving
Vietnam’s National Energy Development Strategy up to 2020 with 2050 vision. A clear direction
for the development of the power sector was presented in this strategy.

- Decision No. 16/2008/QD-BTNMT dated 31 December 2008 by MoNRE, on promulgation of

National Technical Standards for the environment.

- Circular No. 25/2009/TT-BTNMT dated 16 November 2009 by MoNRE, on issuing technical

standards for the environment.

- Document No. 10982/BCT-ATMT dated 17 November 2008 by MoI, on preparation of SEAs

for plans. This document stated that all agencies in charge of preparing strategies/plans are also
responsible for preparing SEAs for these strategies/plans in accordance with Article 14 of Law
on Environmental Protection and submit SEAs to authorized agencies for appraisal according to
the law. Relevant departments only submit strategies/plans to the Ministers for approval only
when appraisal reports of their SEAs are available by environmental protection agencies.

- Decision No. 6385/QD-BCT dated 21 December 2009, on approving the plan and estimated
budget for the “Strategic Environmental Assessment for national Power Development Plan for the
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period 2011-2020 with vision to 2030”.

2.2. Overall Strategies and Policies

2.2.1.Environmental and Socio-Economic Strategies and Policies
National Strategy for Environmental Protection up to 2010 and vision toward 2020, which was
approved in Decision No. 256/2003/QD-TTg dated 2 December 2003, on approving the National
Strategy for Environmental Protection. Main objectives and responsibilities set out in this
strategy are: (1) Protection and sustainable extraction of natural resources (rational extraction,
and suitable, effective and economical use of land and mineral resources; rational water extraction,
protection and development; (2) Environmental protection and improvement of focal areas such as
urban and industrial areas, marine, coastal and island areas, river basins and wetlands, and natural
and cultural heritage sites; (3) Nature and biodiversity conservation, including conservation and
development of nature conservation areas and national parks, forest development and increase in
vegetation cover, and biodiversity conservation.

National Program to respond to Climate Change, which was approved in Decision No.158/QD-
TTg dated 2 December 2008, with clear guiding principles of sustainable development, response
to climate change as the responsibility of the whole political system, society, sectors, regions,
and gender equity and poverty reduction.
Socio-Economic Development Plan for the period 2011-2015, published by the Government of
Vietnam in 2010, and the draft socio-economic development plan and government budget for
the 5 year period 2011-2015. The Central Executive Committee has discussed and
commented on the content of this draft, focusing on the details of: development viewpoints,
objectives and points of breakthrough, overall development responsibilities and restructuring the
economy, and organization and implementation of the 5 year plan.
Overall goals of the five year plan are: (i) Consolidating macro-economic stability; (ii) striving
for higher economic growth; (iii) elevating the quality, efficiency, and competitiveness of the
national economy; (iii) To achieve political and social stability, consensus, democracy, and
discipline; (iii) ensuring social security and welfare, bettering people’s life, especially poor people
and ethnic minority people living in mountainous and remote areas; (iv) reinforcing work in
protection of the environment and natural resources and in response to climate change; (v) raising
the efficiency of diplomatic work and international integration; (vi) consolidating national
defense; guaranteeing security, social order and safety; and (vii) creating a foundation for making
Vietnam a modern industrialized country by 2020.

Key targets of the five year plan are: the gross domestic product (GDP) increase to 7-7.5% per
annum; GDP per person in 2015 at around US$2,000, increase by 1.7 times compared with
2010; Productivity in 2015 increase two times compared with 2010; consumer price index growth
rate at the average 7% per annum; total export increase by 12% per annum; trade deficit under
15% of total export turnover by 2015; average total social investment capital at 40% of GDP; state
budget deficit reduce to under 5% of GDP in five years to 4.5% by 2015; safe level of public debt
and debt to foreign countries; proportion of trained workers accounting for 55% of the labor force
by 2015; proportion of poor households reduce by 2% per annum; forest coverage increase to 45%
by 2015; and 20% of the communes classified as “new rural communes” by 2015, etc.
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The national Socio-Economic Development Plan (SEDP) for the period 2010-2020 was approved
in the Party meeting in January 2011. The SEDP anticipates Viet Nam’s transition to being a
developed country by the year 2020, with a knowledge-based economy and stable and secure
livelihoods for all sections of society. The SEDP emphasizes the diversification of the rural
economy, the need to target appropriate development solutions for the needs of communities in
remote and impoverished parts of the country, the strengthening of private sector engagement in
rural development and the continuation of decentralization and local democratization processes.
The priorities and development principles set out in the SEDP provide a context within which
sectoral and provincial level plans should be established.

Balanced and sustainable development principles are built into and reinforced in the new SEDP
for the period 2010-2020. This includes the incorporation of new regulations and decrees on
different aspects of sustainable development and environmental protection that have been issued
since the last SEDP was prepared. As such, the policy and legislative context for balanced and
sustainable development continues to be strengthened in Viet Nam and is an integral and central
part of the overall development objectives of the country now and in the future. These principles
should be reflected in the preparation of sectoral plans such as the PDP VII that is the subject of
this SEA.

The overall approach to the power sector is to expand capacity to meet demands, but also to
improve efficiency, balance fuel sources, expand the network to poor and remote areas (using new
and renewable energy technologies where needed) and reduce the environmental impacts
associated with electricity generation. The SEDP includes measures to ensure reasonable,
effective and sustainable use of natural and environmental resources in watershed areas, and
mainstream environmental protection into socio-economic development plans; renew the planning
work in regard to environmental protection. There are provisions to expand forest coverage and to
integrate climate change into strategic planning and natural resource management. These goals
and targets will be taken into account in power planning and development decisions.

National Water Resources Strategy up to 2020, which was approved in Decision No.
81/2006/QD-TTg dated 14 April 2006
Forest Development Strategy for the period 2001-2010 by MoNRE;
Hydropower Development Strategy up to 2010 by MARD;
National Target Program for Rural Water Supply and Sanitation by the Government, which
was approved in Decision No 237/1998/QD-TTg dated 03 December 1998;

National Strategy for Natural Disaster Prevention and Mitigation up to 2020 by the
Government, which as approved in Decition No. 172/2007/QD-TTg dated 16 November 2007.

2.2.2. Energy Strategies and Policies

Decision No. 1855/QD-TTg, dated 27 December 2007, on approval of Vietnam’s National
Energy Strategy up to 2020 with vision to 2050 has a clear statement on the overall approach to
the development of energy resources and production capacities:
“Exploiting and using reasonably and effectively the domestic energy resources; Supplying
20
sufficiently the energy requirements with the highly increasing quality and the reasonable
price for the socio-economic development course; Ensuring the national energy security;
Diversifying the investment and commerce ways in the energy field, gradually establishing
and developing the competitive energy market; Strengthening the development of the new
and renewable energy sources in order to meet the need of power requirement, especially in
the remote areas, border and islands; Developing rapidly, effectively and sustainably the
energy sector, developing must be attached to the environment protection”.

The National Energy Efficiency and Conservation Program has some initial success: the Law
on Energy Efficiency and Conservation was completed and a guideline for energy efficiency and
conservation for government agencies, businesses, local government, and households was drafted.
The target was to reduce national power consumption from 3-5% for the period of 2006-2010.
This target now is to reduce from 5-8% of national power consumption for the period of 2011-
2015, according to the normal development scenario.

2.3. Technical Framework

The SEA of PDP VII was prepared based on the main following technical documents:
- PDP VI, prepared by the Institute of Energy, EVN, in 2005.
- PDP VII, prepared by Institute of Energy, MoIT, in January 2011.
- General Technical Guidance for SEAs, completed by the Department of Appraisal and Strategic
Environmental Assessment under the Ministry of Natural Resources and Environment in January
2008, under the scope of the SIDA SEMLA program, and issued in October 2008.

3. Objectives, Approach, Methodology, Organization and Implementation

of the SEA
3.1. Objectives of the SEA
Main objectives of the SEA of PDP VII are:
1) To ensure that the power development plan satisfies the power demand for national socio-
economic development in an efficient and sustainable manner.

2) To identify social and environmental issues of power development plans and to analyze
and calculate social and environmental costs of development scenarios in PDP VII.

3) To assess key GoV policies (renewable energy, climate change, environmental flows,
energy efficiency and conservation, and benefit sharing, etc.) to reflect the benefits and
influence of these policies in PDP VII.

4) To propose mitigation measures to reduce negative impacts or compensate people negatively

affected by the implementation of PDP VII.

3.2. Approach and Methodology

3.2.1. Methodology
In order to achieve its objectives, the SEA adopted a methodology that combines the two
21
interrelated processes of assessing environmental impacts and identifying options for power
development plans.

The SEA was prepared in the context that there were scarce financial and human resources, as
well as limited time. Information on key issues was either not in place or only partial available.
This necessitated a method and process which relied heavily on the judgments and opinions of the
government officers and other national experts involved
The SEA focuses on the role and contribution of the national power development plan to national
development. Through this approach, the SEA helps to create a balance between economic
development, social equity and environmental sustainability.
Trend analysis: The methodology adopted in the pilot SEA used trend analysis as the primary
analytical tool. This method was adopted following the recommendations of the MoNRE
Technical Guidelines, which follow a process similar to approaches adopted in the European
Union. Trend analysis is the most important component of every strategic assessment.
Considering the requirements for SEAs in Vietnam2, this analysis can be seen as an analysis that
reflects changes over time in key socio-economic and environmental issues.
Trend analysis in this SEA focused on key issues that were identified and selected by experts
based on results of the stakeholder workshop and the national consultation (by distributing and
collecting assessment forms to relevant provincial authorities).

The environmental impacts assessment (which also includes reviews of socio-economic impacts,
development plans of other sectors, and technical indicators) was based on power demand and
supply forecast scenarios (for both power source development and power grid expansion) presented
in PDP VII, taking account of each component project, to propose adjustments to the power
development plan. This assessment process is illustrated in Figure 1.

Quantitative method allows impact assessment of verifiable indicators such as loss of forest, land
area, level of gaseous emissions, number of people affected by gaseous emissions from thermal
power plants, and number of displaced people, etc. The costs of these impacts are then calculated
and internalized into the overall cost calculations for all environmental and social costs and
benefits from different proposed sources of power generation and power grid development
options. This overall cost will be included in the calculations of the minimal and optimized
investment costs of proposed power development projects.

The use of GIS analysis and the method of overlapping maps were adopted for this assessment of
socio-economic and environmental issues.

Qualitative assessment was adopted for indicators that cannot be quantified, such as the main
trends and their motivations, territorial size, and key issues of concern in power development in
Vietnam.

This methodology allows identification of main trends and models within the scope of this
research in the last 10 years, and a view of the situation in the next 20 years. The expected result

2
Law on Environmental Protection (2005), Chapter 1, Article 3, Item 19 emphasizes the important role of an SEA,
confirming that the SEA appraisal report is a preconditions for strategy/plan approval to ensure sustainable development.
22
will reflect: (a) key national policy and development objectives and (b) the opinions and
knowledge of key stakeholders.

3.2.2. SEA Phases

The key steps in the SEA are as follows:

Stage 1: Define the analytical framework

1) Define the key national socio-economic and environmental issues of concern and
priorities that should be considered in PDP. These issues and priorities are related to all
five categories of power development: hydropower, thermal power, nuclear power,
renewable energy, and transmission line expansion (500 and 220kV lines).

The SEA started with a stakeholder consultation workshop, which was organized in Qui Nhon
city in July 2010. The purpose of this workshop was to define key socio-economic and
environmental issues that are related to the sustainable and strategic environmental aspects of
PDP. 20 socio-economic and environmental issues of PDP (see Table 2) were discussed in the
workshop. The result of this workshop was a set of the most important strategic issues that
was used as the analytical framework in this SEA.

Table 2: Key issues related to the development of PDP

Area of Issue identified by provincial and district authority

concern
Environment
1 Hydrology Lack of water during dry season, low water level
Big flood disrupting river flows
Increased level of salt intrusion in dry season
Reduced downstream water flows
2 Quality of water, Increased pollution due to gaseous emissions, wastewater and solid waste
air and soil

3 Aquatic Increased demand for use and export of natural products

biodiversity
Environmental pollution affecting fish and aquatic vegetation

Use of destructive fishing equipment

Reduction in traditional fishing activities and sustainable use
4 Terrestrial Degradation of the diverse fauna and flora system
biodiversity
Biodiversity values mainly remain in upstream areas
Reinforcing regional biodiversity conservation
5 Loss of forest Loss of biodiversity and rare genetic sources of international value significance
Increased risks of downstream sedimentation, erosion and flood
Reduced water bearing capacity in soil and the effects of this on river basins
Loss of forest biological services
Livelihoods of people who are dependent on forests
6 Land/soil High and increasing land erosion
7 Degradation of Fuel consumption during the construction and operation of power projects
natural resources resulting in degradation of natural resources
23
8 Climate change Increased risk and incidence of natural disasters
Reduced agricultural and industrial productivity as a result of changes in weather
patterns.
Economy
9 Fishing and Increased level of fishing resulting in reduced quantities of each catch
aquaculture
Reduced food supply for aquaculture leading to higher cost
Loss or reduction in quantity of economically valuable species in rivers due to
construction of dams and reservoirs.
Pollution affecting aquatic habitats
10 Agriculture Reduction in agricultural production land
Reduced productivity due to air pollution and climate change
Land erosion, acidification of soil in agricultural areas, degradation of
agricultural production land in lower river basins
Use of fertilizer and pesticide resulting in soil and water pollution

Reduction in brackish water aquaculture and increase in fresh water

aquaculture having high environmental impacts
Food security
11 Forestry Environmental and biological services

Livelihoods of many households dependent on forest resources and forestry

production
12 Hydropower Only 55% of hydropower demand is met
Conflict of interest in water demand for irrigation and hydropower – need for
multipurpose water resources management
13 Water supply Lack of water supply for residential areas

Rapid increase in water demand for industrial activities and domestic supply
Increase in water demand for biological recovery, reduction of salt intrusion,
surface pollutant wash-off, mitigation of river-edge erosion by reducing severe
flooding
Lack of attention to systematic river basin management and use of hydropower
stations, lack of coordination across sectors
Lack of regular information updates on quality and capacity of water supply

Development of industrial zones and increased water demand resulting in an

imbalance between biology and population density
14 Urban Construction of infrastructure in lowlands which are prone to floods
development
Scattered housing development along side big roads outside of the city with
inadequate supporting infrastructure
Lack of clean water supply for residential areas
15 Energy security Reduced reliance on fossil fuel

Dependence on fuel price and primary fuel market

Limited financial capacity for new and renewable energy development and fuel
conservation
16 Natural resource Degradation of natural resources
exploitation
Exploitation of limestone and production land resulting in changes to the natural
scenery.
24
Illegal logging along side rivers and in special use forests

17 Industry Focus on development within river basin areas – remote areas for material
exploitation and processing factories
Conflict between primary industrial development (in resources exploitation,
including water resources) and development of other sectors
– use of land and other natural resources
Pollution of surface water and ground water
18 Use of water Water discharge management
resources
Lack of water during dry season due to water storing in reservoirs for power
generation
Sedimentation in rivers and reservoirs – reservoir longevity?
Competition for water use/demand amongst sectors
Society
19 Demographic Increased migration from rural areas to urban areas
and ethnic
minority
Increased level of resettlement and re-impoverishment
Poor quality in job training
Slow improvement of employment structure: high employment rate in public
sector
Dependence on shifting agriculture, forestry and river fishery
High poverty rate
Low education level
Preservation of outstanding cultural values
Risks of loss of traditional cultural values and increased social evils
Need for education and health care services development
20 Health Increased incidence of diseases related to environmental pollution,
especially air pollution
Increased incidence of water born diseases during flood season
Better access to health care services
Transmissible diseases

25
Based on the results of this first round of consultation and the consultation (using the scoring
method) with specialized agencies and local management authorities (see Appendix 1), the
working group had discussed and selected 12 strategic environmental issues (see Table 3), and
developed assessment indicators for each of these issues.

Key environmental issues presented in the SEA

This list of strategic environmental issues and their assessment indicators constitute the
framework of the SEA of PDP VII.

Table 3: Key environmental issues of the SEA

Key issues for assessment within the scope of the SEA

(See Chapter 3,4 and 6)
1. “Loss of forest and biodiversity“
2. “Hydrological regime, water resources management and saltwater intrusion
management
3. “Changes to environmental quality“
4. “Solid waste and toxic waste“
5. “Natural resources conservation and efficiency“
6. “Climate change “
7. “Energy security”
8. “Environmental conflicts, risks and accidents”
9. “Resettlement and impoverishment”
10. “Community health”
11. “Agriculture and food security”
12. “Livelihood”

These issues are presented by order of priority in Table 4, based on the level of concern of the
local authorities, and the concern of the central government, which was expressed through the
strategies and national target programs discussed in the previous section. The next chapter
provides qualitative and quantitative analyses of the assessment indicators of each of these
issues (see table below). The analyses take into account past, present and future trends to assess
the impacts of PDP VII.
Table 4: Key socio-economic and environmental issues and assessment indicators

No. Key issues Assessment

indicator
1 Loss of forest and Loss of forest, degradation of biodiversity, including many rare genetic
biodiversity sources of international value significance
Loss of forest biological services
Environmental pollution affecting different species
Increased demand for use and export of natural products
Traditional fishing activities and unsustainable use of natural resources
Degradation of biodiversity; biodiversity values mainly remain in upstream
areas

26
Reinforced regional biodiversity conservation
Livelihood of households dependent on forests
Increased risks of downstream sedimentation, erosion and flood
2 Hydrological regime, Reduced downstream water flows resulting in lack of water and saltwater
water resources intrusion during dry season, especially when reservoirs start storing water
management, and for power generation
saltwater intrusion
management
Increased water demand for biological recovery, reduction of saltwater
intrusion, surface pollutants wash-off, mitigation of river-edge erosion by
reducing severe flooding
Competition for water use/demand across sectors
Rapid increase in water demand for industrial activities and domestic
supply
Development of industrial zones and increased water demand resulting in
an imbalance between biology and population density
Lack of attention to systematic river basin management and use of
hydropower stations, lack of coordination across sectors
Lack of regular information updates on quality and capacity of water supply
Management of water discharge and flood issues
Sedimentation in rivers and reservoirs
Conflict of interest in water demand for irrigation and hydropower – need
for multipurpose water resources management
Lack of water supply for residential areas

3 Changes to Gaseous emissions

environmental quality
Wastewater
Acidification of soil
4 Solid waste and toxic Quantity and type of waste
waste
Environmental issues of waste storage

5 Natural resources Over-exploitation

conservation and
efficiency
Fossil fuel consumption
Increased efficiency in fuel consumption, reduction of loss and increased
efficiency in fuel exploitation
Natural resources exploitation for power development
6 Climate change Increased risk and incidence of natural disasters
Reduction in industrial and agricultural productivity due to changes of
weather patterns.
7 Energy security Reduced reliance on primary fuel, especially fossil fuel
Dependence on fuel price and primary fuel market
Limited financial capacity for new and renewable energy development and
fuel conservation
8 Environmental conflicts, Water conflict, flood, erosion and environmental flows
risks and accidents
Competition for natural resources
Conflict of benefits from biological services
Subjective risks
27
Subjective environmental risks and accidents
9 Social issues of Number of displaced people, number of affected people
resettlement and
impoverishment
Increased migration from rural areas to urban areas
Slow improvement to employment structure / high rate of employment in
public sector
Compensation and support policies
Poor quality in job training
Lack of supporting infrastructure and services such as education and
health care services
Preservation of outstanding cultural values
The risk of loss of traditional cultural values and increased social evils
10 Livelihood Income loss or disruption
Unsuitable supporting budget and timeframe
Ethnic minorities and their ability to adapt to new living environment
Dependence on shifting agriculture, forestry and river fishing
Lack of land for resettlement and production
Lack of investment capital for production
11 Health Increased incidence of diseases related to environmental pollution,
especially air pollution
Increased incidence of water born diseases during flood season
Better access to health care services
Transmissible diseases
12 Agriculture and food Reduced land area for agricultural production
security
Reduced productivity due to air pollution and climate change
Erosion, acidification of soil in agricultural land, degradation of agricultural
land in lower river basin
Use of agricultural products to produce fuel

Food security

Only a few environmental issues and indicators in the table above are specifically for one
component of power development plan. For examples, flood, environmental flows, loss of forest
and biodiversity are main issues of hydropower development. Air pollution and climate change
are main issues of thermal power development. Other issues are key social and environmental
issues of PDP VII.

The working group received positive comments on this selection of key environmental issues and
indicators from environmental experts of JICA, the organization that provided consultancy
service for the preparation of PDP VII.

In the selection of these issues and indicators, the working group also established the policy
context in relation to national policies and targets of: (i) poverty reduction and social equity; (ii)
national environmental protection; (iii) energy efficiency and conservation; (iv) renewable energy
development; and (vi) response to climate change. Those are the policies and targets that are
related to greenhouse emissions, sustainable use and conservation of natural resources,
regulations on minimal environmental flows and benefit sharing of water resources.
28
The basis for assessing the adherence of PDP VII to national policies and targets are:

- Article 4 of the Electricity Law stressed on the need for sustainable power development
based on optimal use of resources to supply electricity for domestic use and socio-
economic development and contribute to national defense and security, and energy
security. This article also stated the need for accelerating exploration and use of
renewable energy for power generation. Article 60 of this Law stated that individuals
and businesses shall be encouraged to invest in the development of power grid and power
generators using locally available energy and renewable energy to provide electricity for
rural, mountainous and island areas.

- The target set out in the b section of Article 2 of Decision No. 1855/QD-TTg, on
approving Vietnam’s National Energy Development Strategy up to 2020 with 2050 vision,
was to “increase the use of new and renewable energy to around 3% of the total primary
commercial energy use in 2010, around 5% in 2020 and around 11% in 2050”.

- Section 2 of Article 1 of Decision No. 79/2006/QD-TTg dated 14/04/2006, on approving

the National Target Program for Energy Efficiency and Conservation stated that the target
was to “reduce national power consumption from 3-5% for the period of 2006-2010. This
target now is to reduce from 5-8% of national power consumption for the period of 2011-
2015, according to the normal development scenario…”

- The overall objectives of the National Target Program for Climate Change were to “assess
climate change impacts on sectors, areas and regions in specific periods and develop
feasible action plan to effectively respond to climate change in each short-term/long-term
period to ensure sustainable development of Viet Nam, to take full use of opportunities to
develop towards a low-carbon economy, and to join international community effort to
mitigate climate change impacts and protect global climatic system. Every ministry, sector,
and local government shall be expected to have a specific action plan to respond to climate
change”.

2) Assess the power development scenarios in PDP VII, and establish the supply – demand
options and alternatives to be included in the analysis.

Based on the national targets discussed above, the SEA working group has requested the PDP VII
working group to include the two following comparative scenarios:

- Alternative 1: to increase the rate of energy saving and efficiency from 1-3% (base case
scenario) to 5-8% in 2030 (demand scenario).

- Alternative 2: to assume the use of renewable energy from 4% (base case scenario) to 10%
in 2030 (supply scenario).

3) Define the role of GIS analysis in the overall SEA approach.

Stage 2: Data collection and definition of the baseline analysis.

1) For each of the quantifiable indicators, identify and collect (a) data already available to IE;
(b) data available to the ADB advisors; (c) data from other sources; and (d) data available to
29
national experts. Additional data collection was supported buy MoIT.

2) Establish the structure and parameters for GIS analysis and identify indicators suitable for
GIS analysis based on the locations of future power plants, transmission lines, and the
zones of influence of thermal power plants (areas affected by gaseous emissions) and
hydropower plants (areas affected by construction of dams and surrounding areas). The
immediate affected areas are within 10 km from plant and the larger affected areas are
within 30 km from plant.

- For hydropower, identify where the analysis undertaken in the 2009 PDP VI Pilot SEA
needs extension and/or amendment.

- For nuclear power, analysis was taken from the strategic environmental impact assessment
of the location plan for nuclear power development in Vietnam, which was undertaken in
2009.

3) Study the PDP VII demand scenarios and baseline supply options, including information
about locations of potential power plants, new transmission lines and zones of influence of
hydropower power plants and power plants of other generation types.

Stage 3: Stakeholder consultations, which were undertaken in several phases of the project.

The first stakeholder workshop “The SEA Scope and Methodology” was organized to gather
stakeholders’ opinions on the selection of key environmental issues for developing the analytical
framework.

The Impact Matrices were distributed to relevant provincial authorities (Provincial Departments of
Natural Resources and Environment and Provincial Departments of Industry and Trade) in
provinces where PDP VII power development projects are located to gather their key concerns
regarding potential environment impacts. Based on the results collected from the provincial
authorities, the SEA working group gained knowledge about their concerns about the potential
impacts, both positive and negative, of different types of power generation and transmission line
expansion planned for their provinces.

In the final phase of the project, another workshop was organized to present the results and receive
feedback on the assessment and recommendations in the SEA. The workshop included a
discussion about government agencies responsible for relevant policy areas in revision of possible
recommendations for the SEA.

Stage 4: Impact analysis and weighting.

1) Analysis of different impacts using economic valuation and scoring.

2) Quantitative analysis of the physical quantities of different impacts, both positive and
negative, for the different power supply options included in the SEA.

3) Economic valuation, where possible, of the costs and benefits of impacts of the power
supply options in PDP VII for comparison and ranking, and development of indicators to
demonstrate the scale of impacts where valuation is not possible.
30
4) Ranking of the power supply projects (only applied for thermal power) in the proposed
power supply scenario based on priority indicators, national targets, and the sensitivity of the
project location.

Assessment Assessment method

Indicator
Loss of forest, degradation of biodiversity, including many rare Identification of lost forest areas by
genetic sources of international value significance GIS.
Loss of forest biological services Trend analysis
Environmental pollution affecting different species Trend analysis
Increased demand for use and export of natural products Trend analysis
Traditional fishing activities and unsustainable use of natural Trend analysis
resources
Degradation of biodiversity; biodiversity values mainly remain in Trend analysis
upstream areas
Reinforced regional biodiversity conservation Trend analysis
Livelihood of households dependent on forests Calculation of economic loss
Increased risks of downstream sedimentation, erosion and flood Trend analysis
Reduced downstream water flows resulting in lack of water and Hydraulic modeling
saltwater intrusion during dry season, especially when reservoirs
start storing water for power generation
Increased water demand for biological recovery, reduction of Trend analysis
saltwater intrusion, surface pollutants wash-off, mitigation of river-
edge erosion by reducing severe flooding
Competition for water use/demand across sectors Trend analysis
Rapid increase in water demand for industrial activities and Trend analysis
domestic supply
Development of industrial zones and increased water demand Trend analysis
resulting in an imbalance between biology and population density
Lack of attention to systematic river basin management and use of Trend analysis
hydropower stations, lack of coordination across sectors
Lack of regular information updates on quality and capacity of Trend analysis
water supply
Management of water discharge and flood issues Trend analysis
Conflict of interest in water demand for irrigation and hydropower – Trend analysis
need for multipurpose water resources management
Lack of water supply for residential areas Analysis based on results of hydraulic
modeling
Gaseous emissions Calculation of gaseous emissions
and economic loss
Wastewater Calculation of wastewater discharge
and economic loss
Acidification of soil Estimation of economic loss
Quantity and type of waste Estimation of waste quantity
Environmental issues of waste storage Trend analysis
Over-exploitation Trend analysis
Fossil fuel consumption Trend analysis

31
Increased efficiency in fuel consumption, reduction of loss and Trend analysis
increased efficiency in fuel exploitation
Natural resources exploitation for power development Trend analysis
Increased risk and incidence of natural disasters Trend analysis
Reduction in industrial and agricultural productivity due to changes Trend analysis
of weather patterns.
Reduced reliance on primary fuel, especially fossil fuel Trend analysis

Dependence on fuel price and primary fuel market Trend analysis

Limited financial capacity for new and renewable energy Trend analysis
development and fuel conservation
Water conflict, flood, erosion and environmental flows Trend analysis
Competition for natural resources Trend analysis
Conflict of benefits from biological services Trend analysis
Subjective risks Trend analysis
Subjective environmental risks and accidents Trend analysis
Number of displaced people, number of affected people Trend analysis
Increased migration from rural areas to urban areas Trend analysis
Slow improvement to employment structure / high rate of Trend analysis
employment in public sector
Compensation and support policies Trend analysis
Poor quality in job training Trend analysis
Lack of supporting infrastructure and services such as education Trend analysis
and health care services
Preservation of outstanding cultural values Trend analysis
The risk of loss of traditional cultural values and increased social Trend analysis
evils
Income loss or disruption Trend analysis

Unsuitable supporting budget and timeframe Trend analysis

Ethnic minorities and their ability to adapt to new living Trend analysis
environment on shifting agriculture, forestry and river fishing
Dependence Trend analysis

Lack of land for resettlement and production Trend analysis

Lack of investment capital for production Trend analysis
Increased incidence of diseases related to environmental pollution, Cost calculation of health impacts
especially air pollution
Increased incidence of water born diseases during flood season Trend analysis
Better access to health care services Trend analysis
Transmissible diseases Trend analysis
Reduced land area for agricultural production Identification of agricultural land
affected by power projects
Reduced productivity due to air pollution and climate change Trend analysis

Erosion, acidification of soil in agricultural land, degradation of Trend analysis

agricultural land in lower river basin
Use of agricultural products to produce fuel Trend analysis
Food security Trend analysis

32
Stage 5: Identification of areas and options for mitigation and compensation. For areas and people
affected negatively by power plant and transmission line development, identify appropriate
compensation and mitigation approaches, based on national regulations and good experiences in Viet
Nam and other countries.

Assess the financial implications and financing options for mitigation and compensation measures,
including the potential of benefit sharing mechanisms based on Decree No. 99/2010/ND-CP dated 24
September 2010 on Payment for Environmental Services.

Propose monitoring and management programs to achieve environmental protection targets.

Stages 6: Conclusions and Recommendations

At this stage, the SEA report is completed and submitted to the government for appraisal.

The figure below illustrates the process of undertaking the SEA and the relation between the SEA
working
Figuregroup
7-3: and the PDPIntegration
Suggested VII workingofgroup.
SEA into PDP VII!

Demand Forecast Generation Planning Model

Model

Development Policies, Strategies and Plans Alternative Technical- Recommended

Scenarios Economic Power
Supply Cost Development
EE&C Activities Power Demand Forecast (Power Plan
Supply
Source and
Transmission)
Potential for Primary Energy Supply and
Socio-
Power Interconnection
economic Data

Economic-Technical-Environmental Data
Situation of
on Existing and Candidate Projects
Load System
Evaluation of
Scenarios
Fuel Price Forecast

Internalizing of Externalities (Air

Pollutants and Greenhouse Gases)

GIS Database

Other Environmental Measures for

Social Data Issues Abatement

Water Resource Data Social Issues

Bio-Ecological Data Other Issues

Figure 1. Integration
Legend: of SEA
Capacity into PDP
Building VII
Needed (This figure has been modified)
Fields

!
3.3. Organization and Implementation of the SEA
!
The Institute of Energy (IE) was in charge of the plan and has made the following arrangements:
"#$%!&'()&*!
33
+,- .&&(&&$%/!(%0$12%3(%'#4!5#3#/(!62&'&!721!#$1!)2448'#%'&!#%5!/1((%928&(!/#&(&!
+:- ;%'(1%#4$<$%/!'9(&(!(='(1%#4!62&'&!$%'2!/(%(1#'$2%!)4#%%$%/!325(4!
The IE set up the SEA working group, consisting of 12 members who are experts from different fields
including environment, economics, electricity, etc. 5 members of the SEA group were also members
of the PDP VII working group. The SEA working group is headed by IE Director, who is also the
chairman of PDP VII, and IE Vice-Director and vice-chairman of PDP VII.

Other members of the SEA working group are strategic environmental experts in the fields of
environment, environmental economics, biology, etc. International expertise was provided by an
expert from the Stockholm Environment Institute, a GIS specialist from the Environment Operations
Center of the GMS Core Environment Program of the ADB, and an energy specialist from the ADB.
The cost of the international experts was covered by the ADB.

The SEA working group established the scope and methodology and identified strategic
environmental factors, impacts and indicators for assessment.

The power development scenario was developed based on the power demand scenario. The PDP VII
consists of two main components, which are power sources development (or power production
development) and transmission line development. Power production development is divided into 4
categories: (1) Thermal power development from coal, oil and gas; (2) Hydropower development; (3)
Nuclear power development; and (4) New and renewable power development. The national
transmission line development is the expansion of the 220 kV and the 500 kV transmission lines.

In May 2010, the power development scenario was completed and sent to the SEA working group for
assessment and analysis. Important details of this scenario are:

(1) Hydropower: compared with PDP VI, the total capacity of all hydropower plants in PDP
VII is lower but the number of hydropower plants is higher. The two new hydropower plants
in the North are the Ba Tuoc 1 and Ba Tuoc 2 with combined capacity of 120 MW. Ba Tuoc 2
is currently in operation phase and Ba Tuoc 1 is still under construction. In the Centre, the
new Serepok 4A with total capacity of 70 MW is currently under construction and expected
to be in operation in 2013. The new project in the South is the Dong Nai 6, which is
expected to be in operation in 2016.

(2) Thermal power: compared with the forecast in PDP VI, the number of thermal power plants is
lower in PDP VII. However, this number and the planned capacity still seem to be too
ambitious: the plan is to produce 4,185 MW in 2011 (PDP VI planned for 9,655 MW in 2011),
86,625 MW in 2020 and 94,625 MW in 2030. In the PDP VII power development scenario, all
gas-fired thermal plants will be converted to coal-fired thermal plants after 2017 when gas
runs out and all new thermal power plants are designed to be coal-fired.

(3) Power generation from renewable energy only accounts for 3.1% of the total power production,
which is in line with the renewable energy availability.

(4) Nuclear power: the plan is to build 8 nuclear power generators in the South.

After reviewing this power development scenario, the SEA working group concluded that it was
unsustainable for the following reasons:

(1) According to this power development scenario, Vietnam will have to import coal for power
34
generation after 2015. Vietnam will need to import 79% of the coal for power generation by
2020 and 71% by 2030.

(2) This scenario shows a weakness in the power supply structure that might seriously threaten
national energy security because it leads to a heavy reliance on the world fuel market when
fuel price is climbing, and fuel supply is limited and unstable.

(3) Most thermal power plants are planned to be near rivers and in coastal areas to take advantage
of the good water supply and transportation conditions. However, these areas are often densely
populated and the environment is usually already compromised by pollution from local
industrial activities. Therefore, the pressure of environmental impacts of these projects will be
very high.

This power development scenario of PDP VII did not meet the national targets for the environment and
socio-economic development. The SEA working group discussed this issue with the PDP VII
working group and proposed a reduction in the reliance on thermal power in power production by
cutting down the number of proposed coal-fired thermal power plants in order to reduce coal
consumption and its consequences.

In July 2010 the adjusted power development scenario was completed and sent to the SEA working
group. In this version, thermal power generation is much reduced but still at a desirable level. The
plan in this power development scenario is:

(1) Hydropower: unchanged

(2) Thermal power: the number of gas-fired thermal power plants remains unchanged. A few
more gas-fired thermal plants using imported LNG are proposed for the Central Region.
This means there is the need to look for LNG sources for import.

(3) Power generation using renewable energy increases to 4%, mainly by small hydropower
development.

(4) Nuclear power: three more nuclear power generators are proposed for the Central Region.

After a discussion with the PDP VII working group, the SEA working group concluded that this
adjusted power development scenario was the optimal scenario for analysis in the SEA. This adjusted
power development scenario is now considered the base case scenario (see Appendix 1). Important
details of this base case scenario are:

a. Power supply sources:

< Hydropower development in the PDP VII base case is similar to PDP VI, as discussed above. It
is planned to take full advantage of the forecasted hydropower potential. In the PDP VII base
case there are two projects that have significant biological impacts, namely the Dak Mi 1 and
the Dong Nai 5.

< Coal-fired thermal power generation is planned to increase strongly to around 15,365 MW in
2015, 32,385 MW in 2020, and 77,160 MW in 2030. Power generation from renewable energy
is planned to accounts for 4% of the total power supply, which is around 4,900 MW. This is
higher than the target of 3.1% - 3.8% for the period 2015-2020 in the National Target35Program
for Energy Efficiency and Conservation and the Master Plan for Renewable Energy
Development in Vietnam).

< Nuclear power development will only happen after 2020. Therefore, only basic information on
nuclear power development is included in the PDP VII base case.

b. Transmission line development: In the base case, the transmission line expansion connects
220 kV substations in the whole country with total capacity of 53,700 MVA, 90,000 MVA,
128,600 MVA, and 176,000 MVA in 2015, 2020, 2025, and 2030, respectively. The
contingency set of this power system is N-1.

Although this PDP VII base case scenario was assessed as the optimal scenario, the SEA working
group and the PDP VII working group have considered more possibilities based on demand and
supply forecasts and various options to increase energy efficiency in power production and
reduce energy loss in the transmission grid in order to reduce the number of coal-fired thermal
power plants and to ensure adequate power supply at the same time.

The SEA provides assessment and calculations of the costs and benefits of the main impacts of
the proposed power development projects. The SEA working group also produced a thermal
power plant impact ranking based on national policies and targets.

From the impact assessment and analysis of the PDP VII base case, a set of mitigation,
monitoring and management measures was produced and proposed to the PDP VII working
group. The PDP VII working group then included additional power development options, which
take account of changes in power supply – demand, in the PDP VII. The SEA working group also
took these options to form the basis for the development of desirable mitigation measures. The
proposed mitigation measures were approved at the final consultation workshop of the project.

The working process described above reflects a close collaboration between the SEA working
group and the PDP VII working group.

3.4. Members of the SEA Working Group

No. Full name Specialization/area of Organization

contribution to
the SEA
I. National experts
1 Dr. Pham Khanh Toan Energy Economics Director of IE and Chairman of PDP
VII.
2 Associate Prof. Dr. Nguyen Environmental Technology Head of Environmental Technology
Thi Ha Subject, Faculty of Environment,
Hanoi University of Natural
Sciences, National University.
3 Associate Prof., Dr. Le Thu Environmental Economics. Head of Faculty of Environment and
Hoa Urban Area, Hanoi University of
Economics

36
4 Mr. Phan Mach Ecology and Environmental Institute of Ecology & Biological
Protection. Ecological Resources
impact assessment.

5 Dr. Nguyen Van Du Ecology and Environmental Institute of Ecology & Biological
Protection. Ecological Resources
impact assessment.

6 Dr. Bach Tan Sinh Social Environment and Institute of Strategy – Ministry of
Climate Change Science and Technology

7 Dr. Pham Quang Tu Social Impact Assessment Vietnam Institute of Social Affairs

8 Pham Quang Lam, Msc. Health Impact Assessment Institute of Community Health

9 Nguyen Anh Tuan Electricity System Vice-Director of IE, Vice Chairman

of PDP VII
10 Dr. Hoang Tien Dung Thermal Power Vice-Director of IE
11 Đoan Ngoc Duong, Msc. Thermal Power Director of Centre for Thermal
Power, Nuclear Power and
Environment Consulting Services, IE

12 Nguyen Thi Thu Huyen Environmental Engineering Vice-Director of Environmental

(Head of the SEA working Technology Office, Centre for
group) Thermal Power, Nuclear Power and
Environment Consulting Services,
IE
13 To Thi Ngoc, Msc. Environmental Engineering Environmental Technology Office,
Centre for Thermal Power, Nuclear
Power and Environment Consulting
Services, IE
14 Le Hoang Anh, Bsc. Hydrology Environmental Technology Office,
Centre for Thermal Power, Nuclear
Power and Environment Consulting
Services, IE
15 Nguyen The Bac, Msc. Electricity System Electricity System Office, IE
16 Nguyen The Thang, Bsc. Electricity System Head of Electricity System Office,
IE
17 Nguyen Khoa Dieu Energy Economics Energy demand management and
Ha, Bsc. Economic forecast Office, IE

37
18 Phan Thi Thanh Thuy Energy Economics Centre for Renewable Energy and
Clean Development, IE
19 Đang Huong Giang Environmental Chemistry Centre for Renewable Energy and
Clean Development, IE
20 Ngo Thi Truc Ha, Bsc. Hydrology Hydropower Office, IE
21 Nguyen Tuan Nghia, Bsc. Thermal Power, GIS Environmental Technology Office,
Centre for Thermal Power, Nuclear
Power and Environment Consulting
Services, IE
22 Vu The Uy, Bsc. Thermal Power, GIS Environmental Technology Office,
Centre for Thermal Power, Nuclear
Power and Environment Consulting
Services, IE
23 Nguyen Trong Luong, Bsc. Power Grid Planning Office, IE

II. International Experts

1 Prof. John Soussan Strategic Environmental Stockholm Environment Institute
(Group Leader) Assessment

2 Dr. Romeo Pacudan Energy Economics ADB

(Responsible for internalizing costs
and benefits traditionally treated as
“externalities” in to cost calculation
of power development projects)

3 Mr. Lothar Linde GIS ADB, GMS, Environment

Operations Center

38
Chapter 1: Project Summary and the Key Environmental Issues
of PDP VII

1.1. Project Implementing Agency

- Project Implementing Agency of PDP VII: Ministry of Industry and Trade

- Address: 54 – Hai Ba Trung, Hanoi

- Telephone: 04-22202222

- Fax: 04-22202525

- Person in charge: Hoang Quoc Vuong

- Position: Vice-Minister,
Ministry of Industry and Trade, in charge of Energy Sector

1.2. Project Summary

1.2.1. Summary of the PDP VII

Power Developments Plans (PDPs) are the main strategic planning tool for the power sector. A
PDP includes the following: (i) an Electricity Demand Forecast to predict the capacity (MW) and
energy (GWh) demand in the future; (ii) a Least Cost Expansion Plan giving the infrastructure
needed to meet that demand at all times for the forecast period and at the lowest possible cost, while
maintaining system reliability and quality of supply; (iii) a Transmission Expansion Plan to transmit
the generated electricity to the customers; (iv) a Fuel Supply Assessment to determine the energy
resources (coal, gas, oil) available for energy generation; (v) a Rural Electrification Program for
electricity supply to remote areas that cannot be covered by the national grid; and (vi) an Investment
Program on how to finance investments in the power sector.

1.2.1.1. Objectives of the PDP VII

The objectives of PDP VII are:

< To secure a safe, adequate and reliable electricity supply for all parts of the country to
meet socio-economic development needs, with power production for the whole
country in 2015, 2020, 2025, 2030 at the base case of 184.2 billion kWh, 318.5
billion kWh, 494.1 billion kWh and 737.9 billion kWh, respectively.

< To produce an analysis and assessment of the current power situation and the
implementation of the previous master plan to propose solutions for reinforcing the
strength and addressing the weaknesses.

< To assess the primary energy potential and supply sources for power production to
propose a suitable plan for importing primary energy for power production.

< To develop the most appropriate plan for meeting needs with total installed capacity
39
for the whole country in 2015, 2020, 2025, 2030 at the base case of 43000MW,
65,400MW, 95,000MW, 135,700MW, respectively. This total installed capacity
ensures a safe supply of electricity for the whole country, which only allows less than
24 hours of under-supply per year.

< To develop a transmission line system that connects 220 kV substations in the whole
country with total capacity of 53,700 MVA, 90,000 MVA, 128,600 MVA, and
176,000 MVA in 2015, 2020, 2025, and 2030, respectively. The contingency set of
this power system is N-1.

< To identify grid connection possibility with neighboring countries and to provide
direction for power grid connection with ASEAN countries and China to achieve
regional primary energy efficiency.

< To develop investment plans for the development of the power sector by stages and to
propose an investment structure and investment mobilization options for the
development of the power sector.

< To evaluate the social and environmental impacts and solutions for minimizing these
impacts from the power development plan.

1.2.1.2. Main Content of the PDP VII

The PDP VII consists of 15 chapters and 1 appendix as follows:
Chapter 1: The Current Situation of the National Power System.
This section provides a description and analysis of the current situation of the national power
system in many aspects:

< Evaluation of the power demand for the period 2001 – 2009, which includes
information about power supply at national and regional level and across sectors.

< Evaluation of the power production, power generation equipment and technologies of
the existing power plants.

< Evaluation of the current power grid, information and regulatory system of the national
power system.

This Chapter also presents an assessment and analysis of what have been done well in the past and
weaknesses of the power system that need to be addressed in the future.

Chapter 2: Overview of the Implementation of PDP VI in the Period 2006-2015.

The overview covers the following aspects of PDP VI:

< Comparison and analysis of the actual power demand and the PDP VI’s power demand
forecast for the period 2006-2009.

< Evaluation of the PDP VI’s power source development plan and transmission grid
expansion plan.

< Evaluation and analysis of EVN’s financial situation in the period 2006-2008.
40
This Chapter includes comments and recommendations based on the evaluation of PDP VI for the
subsequent chapters.

Chapter 3: Overview of the Socio-economic Situation and the Energy System in Vietnam.
This Chapter presents an overview of the current socio-economic situation and development
trends in Vietnam. It also includes an energy demand-supply forecast for the whole country.

Chapter 4: Power Demand Forecast. Based on information provided in Chapter 1-3, Chapter 4
presents a power demand forecast in both national and regional scale in three development
scenarios: high scenario, base scenario and low scenario. This Chapter also provides some
analysis about the effects of the Demand Side Management (DSM) program on national power
demand.

Chapter 5 presents an analysis of technical and investment criteria for power source development
and power grid expansion.

Chapter 6 provides an evaluation on primary energy sources, with information about exploration
potential, and exports and import potential, and a fuel price forecast.

This Chapter includes an assessment of the exploration potential of primary energy sources, such
as coal, oil, gas, hydropower, uranium, and new energy sources, such as wind, tide, solar,
biomass etc. The methodology for this assessment is also clearly explained in the Chapter. A fuel
price forecast for both Vietnam and the international fuel market is also included in this Chapter.

Chapter 7: Power Source Development. Selected contents of this Chapter are:

< Plan for power source development that includes hydropower, thermal power, and
nuclear power development. Power generation from renewable energy should be
encouraged. Power import and cooperation with neighboring countries are also
favorable options. The plan thrives for optimized results in power development.

< Evaluation of input data and power development options.

< Analysis of power development options: cost calculations for power development
following the high and base scenarios.

Chapter 8: Power Grid Expansion. Selected contents of this Chapter are:

< Objectives, requirements, methodology and criteria for power grid expansion. The
objective of power grid expansion is to ensure safe and reliable power supply with a
contingency set of N-1.

< Power grid development plan should follow the power development base scenario.

< Analysis of the operation of the power system with the existing power grid.

Chapter 9: Regional Power Grid Connection. This Chapter presents information about the
possibility to connect with the power grids of ASEAN countries and China to achieve regional
energy efficiency.

Chapter 10: Power Development Program for Rural, Mountainous, and Island Areas. This
41
Chapter presents information about power demand and power supply targets of the rural power
development plan to 2020, including details about connecting rural areas with the national power
grid and new energy development for remote and island areas.

Chapter 11: Information and Regulatory System. This Chapter presents information about the
function, responsibility and direction for further development of the information and regulatory
system in the power system.

Chapter 12: The Environment and Environmental Protection in the National Power
Development Plan. This Chapter provides an assessment of environmental impacts of the power
development plan and proposes mitigation measures that can be applied in power generation and
power grid expansion.

Chapter 13 and 14 are about an investment plan for the development of the power sector and
financial analysis for the expansion of the power grid.

Chapter 15 consists of information about the national power management structure.

1.2.1.3. Development Viewpoints and Direction of the PDP VII

In PDP VII, a power sources and power grid development plan was prepared based on the
following key viewpoints:

a. Power sources development:

In the present, power supply sources are located as follows:

• Most coal-fired thermal power plants are located in the North where big coal reserves are.
From 2015, thermal power plants will have to rely on imported coal. Therefore, new
thermal power plants can be located in other regions like the Centre or the South.

• Gas-fired thermal power plants are located in the South where the natural gas reserves are.
However, it is necessary to look for an alternative fuel source to replace gas in power
production to meet the increasing demand of this region because the gas reserves are
limited.

• Hydropower potential, mostly in the North and the Centre, is being fully explored.

• Nuclear power plants in Vietnam are now relying on imported Uranium because of limited
domestic supply.

• Imported energy and electricity in the North mostly come from China, Central Laos,
Cambodia and Thailand.

Regional power development will need to find a balance with regional primary energy
availability in order to ensure reliable power supply. Good inter-regional power connections are
also required to reduce power loss in transmission and to share power reserves (power generated
during rainy season) during dry season. In Vietnam, 50% of the power is consumed in the North,
40% in the South and only 10% in the Centre. However, it is important to avoid excessive
investment in power development in the North and the South where most power is consumed
42
without taking advantage of the favorable conditions for power development in terms of primary
energy availability and locations in the Centre. Having to transfer significant loads of power from
one region to another will put pressure on the transmission lines and compromise the reliability of
power supply.

It is recommended to increase the use of domestic coal for thermal power plants, including
thermal power plants in the Centre and the South.

It is further recommended to maintain coal-fired thermal power production at below 60% of the
total power production. This is a target that the PDP VII working group has agreed with the SEA
working group. It is a rational target considering that the domestic coal reserves and land area for
thermal power development are both running out. It is necessary to build more gas turbine
combined cycle power plants in the South and to develop new gas turbine combined power
projects for the Centre in the period 2019-2020.

The development of small hydropower plants and power plants using renewable energy should be
encouraged. Power generated from these plants should be mostly for local supply to avoid power
loss in the transmission.

Power generation using renewable energy (wind, solar, biomass etc.) is recommended for areas
where these energy sources are available.

It is advised to develop pumped storage hydropower plants where possible, especially in the
South, in the near future to reduce reliance on thermal power production.

More nuclear power plants should be built to reduce the use of fossil fuel, and greenhouse
emissions. The two nuclear power plants planned in Phuoc Dinh and Vinh Hai have the capacity
of 4x1000MW each. First generators of these two plants are planned to be in operation in 2020-
2021. The construction of both plants should be completed between 2025 and 2027. After 2025,
there will be more nuclear power development projects in the Centre with bigger capacity (1,300-
1,400MW/generator)

Vietnam should continue to import electricity from Laos, Cambodia and China. Investment
should be prioritized for the development of hydropower plants in areas bordering Vietnam in
southern Laos and eastern Cambodia.

b. Power grid expansion:

The goal is to ensure safe power supply to every consumer when the power grid operates with a
contingency set of N-1 (if accident happens to any element of the transmission system, power
supply to all consumers is maintained and all of the other elements of the transmission system
should still work as normal).

Development of power sources should be consistent with power grid expansion to avoid
power loss transmission.

Power grid expansion maps need to be simple, flexible, and taking into account power reserves as
well as ensuring power supply quality (voltage, frequency) for the benefits of the customers.

In designing power grid expansion, it is necessary to consider factors such as the transmission
43
distance and load-carrying capacity to choose between super-voltage line and high voltage line,
with the tendency to limit the use of super-voltage line if possible.

In the context where land area available for transmission line expansion is limited and
environmental protection requirements are increasingly high, the approaches recommended are:
(i) use of large distribution lines; (ii) use of tower/pole that can take multiple circuits of
multiple voltage levels, or compact poles; (iii) improvement to existing towers/poles to take
more circuits – this allows the use of existing transmission lines therefore reduces the land area
lost to development of new lines.

For big cities like Hanoi, Hai Phong, Ho Chi Minh City, Dong Nai, Can Tho, etc., it is
recommended to use double circuit or ring circuit, multi-phase transmission line, 500 kV cable
with cross section between 1,300mm2 and 2,400mm2, 220 kV cable with cross section between
660mm2 and 1400mm2; and tower/pole that can take multiple circuits of multiple voltage levels.

In designing substations of high capacity (500/220kV or 220/110kV) in big cities, it is

recommended to use GIS to minimize land loss. Substation step-down transformers need to be
designed with 3 or 4 transformers (900MVA – 2,000MVA transformer for 500kV substations
and 250MVA or bigger transformer for 220/110kV substations). When possible, multilevel
transformers should be installed inside the substation to save space.

1.2.2. The PDP VII in Relation with Other National Development Plans
(1) Socio-Economic Development Plan for the period 2011-2020 with 2030 vision

Electricity supply is closely linked with GDP progress. Therefore, one important task of the PDP
VII is to propose a power development plan that ensures adequate power supply for socio-
economic development needs for the period 2011-2020 with 2030 vision. On the other hand, the
Plan for Socio-economic Development for the Period 2011-2020 with 2030 Vision provides data
for developing power demand forecast and calculating power supply capacity. These data
include:

- Population growth: at the end of 2008, Vietnam population was 86,161 people. The table
below presents population growth forecast until 2020 by the Population Committee:

Table 1.1. Population Growth Forecast

Year 2008 2010 2015 2020 2030

Population (Thousand People) 86,160 88,038 92,499 97,187 102,421

- Economic growth:
At the moment, there is no official forecast of economic growth in Vietnam from the government.
However, a group of experts from the Ministry of Planning and Investment has developed 3
economic growth scenarios based on the current situation of the national economy and a
view of the world economy to the year 2020 and beyond.

Vietnam’s ability to accelerate economic growth is evaluated based on the challenges and
44
opportunities presented to the Vietnam’s economy, and growth factors such as investment capital
(FDI, ODA, total social investment capital), technological advancement, and international
development models and experiences. The three economic growth scenarios are:

High growth scenario: GDP growth rate is 9.11%, for the period 2011-2015, 9.58% for the period
2016-2020, and 9.82% for the period 2021-2030. The industry-construction and service sectors
will experience high growth rate.

Base scenario: GDP growth rate is 7.46% for the period 2011-2015, 8.09% for the period 2016-
2020, and 7.79% for the period 2021-2030. The industry-construction and service sectors will
experience stronger growth.

Low growth scenario: GDP growth rate is 7.09% for the period 2011-2015, 7.66% for the period
2016-2020, and 7.58% for the period 2021-2030.

- Energy efficiency: According to the Energy Efficiency Policy, which was approved by MoIT,
the target is to achieve an energy efficiency level of 3-5% in 2015 and power savings of 1-3%
across sectors.

- The effect of electricity price on power demand: To have an evaluation the effect of electricity
price on power demand, it is necessary to have electricity price forecast, which is based on the
current average electricity price and crude oil price fluctuations. International experience shows
that if electricity price increases by 1%, demand for electricity will decrease by 10% (China is an
example). Therefore, the effect of electricity price on demand is an important factor to consider
in energy efficiency strategy.

80000
0
70000
Low
0
case
Base
60000 case
High
0
case
Figure
50000 1.1.
MW 0
h 40000 Power
0 Demand
30000
0
20000
0
10000
0
0
200 201 201 201 201 201 202 202 202 202 202
9 1 3 5 7 9 1 3 5 7 9

Forecast Figures for the Period 2011-2030

The low power demand scenario is based on the low growth scenario: power production growth is
11.7% per annum for the period 2011-2015, 8,6% per annum for the period 2016-2020, 7.7% per
annum for the period 2021-2025, and 7.1% per annum for the period 2026-2030.
45
The base power demand scenario is based on the base scenario: power production growth is 13%
per annum for the period 2011-2015, 9.4% per annum for the period 2016-2020, 8.5% per
annum for the period 2021-2025, and 7.6% per annum for the period 2026-2030.

The high power demand scenario is based on the high growth scenario: power production
growth is 15.6% per annum for the period 2011-2015, 11.3% per annum for the period 2016-
2020, 9.7% per annum for the period 2021-2025, and 8.8% per annum for the period 2026-2030.

Table 1.2. Power Demand Growth Rate for the Period 2010 - 2030

Sales Electricity Power Production

Period Low Base High Period Low Base Hight

2006-2010 13.5% 2006-2010 13.0%

2011-2015 11.8% 13.1% 15.8% 2011-2015 11.7% 13.0% 15.6%

2016-2020 8.7% 9.6% 11.4% 2016-2020 8.6% 9.4% 11.3%

2021-2025 7.7% 8.5% 9.7% 2021-2025 7.7% 8.5% 9.7%

2026-2030 7.2% 7.7% 8.9% 2026-2030 7.1% 7.6% 8.8%

The power generation and transmission line development plan will be developed accordingly to
satisfy the power demand of the base case. A plan will also be developed according to the high
growth scenario as an alternative.

Table 1.3. Power Demand Forecast Figures until 2030 – Base Case Scenario

Unit 2010 2015 2020 2025 2030

Sales Electricity GWh 85,932 159,202 251,763 378,379 548,800

Power Production GWh 98,886 182,154 286,094 429,977 620,113

Pmax MW 15,731 28,876 45,197 67,693 98,318

Forecast figures show that the power demand will be higher in the industry and service sectors
and lower in domestic use. The distribution of sales electricity is illustrated in figure below.

46
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)#!!!

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0)Ӌ&$1ă&($/ѭӧ&($ $
The figure below shows that there are similarities between power demand forecasts for the period
23$
4Ӄ,$56ҧ$7ӵ$8"#$%'#$,'ҩ9:$&'6$%ҫ6$ÿ)Ӌ&$();)$ÿ#ҥ&$ÿӃ&$<3<2$=>Ĉ$0??$@A$=>Ĉ$0?$ӣ$'B&'$7ѭӟ)$(ҫ&$
until 2025 of PDP VII and PDP VI.
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D<E$Figure 1.3. Comparison of PDP VII’s and PDPÿӃ&$
=69$ '#ҥ%'$F'",$,-)Ӈ&$&(A&'$,';&$0)Ӌ,$1;G$ VI’s&ăG$
Power Demand
<3H2$ Forecasts
@A$ ,-)Ӈ&$ @ӑ&($ ÿӃ&$ &ăG$ <3<2$ @A$
=69$'#ҥ%'$,ә&($,'Ӈ$F'",$,-)Ӈ&$&(A&'$%+&($&(')ӋF$7ҫ6$@A$I'J$0)Ӌ,$1;G$();)$ÿ#ҥ&$ÿӃ&$&ăG$<3H2:$
(2) Master Plan for Development of the Coal Sector in Vietnam until 2015 and vision to 2025
ÿӏ&'$'ѭӟ&($ÿӃ&$&ăG$<3<2C$
and Master Plan for Development of the Oil and Gas Industry in Vietnam until 2015 and
=>Ĉ$0??$ÿK$LMG$LN,$I'ҧ$&ă&($%6&($%ҩF$,';&$@A$7ҫ6$I'J$,-#&($&ѭӟ%$,-#&($,'ӡ)$();&$,ӟ)$ÿӇ$,J&'$
direction to 2025.
,#"&$I'ҧ$&ă&($F'",$,-)Ӈ&$&(6ӗ&$ÿ)Ӌ&$,ӯ$%"%$/#ҥ)$'B&'$&ă&($/ѭӧ&($Oѫ$%ҩF$&A9C$$
In PDP VII, domestic supply of coal, oil and gas in the near future has been reviewed so that
?̫#6%&'%@'%A͝#6%$ͫB%+̫#%C˱ͫ#6%-$D4%.$,3%.$D#%+̩3$%ÿ͇#%#ăE%(878%
calculations of power production from each of these primary sources can be established.
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Pҧ&$/ѭӧ&($,-)Ӌ6$,ҩ&$ QQRQS# 22R2T# S3:2RSU:2 SQ:2RSS:2# V2#
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&ă'( 6787 6789 6767 6769( 67:7
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XY$%ѫ$Oӣ$DH3S$,ҩ&E$ 7898 :;9; :;9< :79<$ ::
Z-#&($ÿ[$&ӝ)$ÿӏ;$DH3S$,ҩ&E$ 7=9; 7<9; 7:9> 89?$ @9?
Table 1. 4. Domestic Coal Supply Forecast for the Period 2011-2030
Year 2011 2015 2020 2025 2030
Coal (million tonnes) 44-46 55-58 60.5-63.5 64.5-66.5 75

Table 1. 5 Domestic Oil and Gas Supply Forecast for the Period 2010-2030
Year 2010 2015 2020 2025 2030
Crude oil
Base case (106 tonnes) 19.9 20.0 20.7 21.7 22
Domestic (106 tonnes) 15.0 17.0 12.4 9.3 6.3
Gas
Base/High scenario (million 7.98 12.4-12.6 14.2-19.6 11.1-18.2 9.6-13.4
m3)

From analyzing the domestic supply forecast of coal, oil and gas it was possible to calculate the
import amount. Other factors such as coal prices and reliance on the international coal market
were also considered.

(3) National Program for Energy Efficiency and Conservation

PDP VII also supports the national energy efficiency and conservation targets of 3-5% for energy
savings and 1-3% for electricity savings. These targets were developed based on actual results of
projects implemented in Vietnam.

(4) National Energy Development Strategy until 2020 with 2050 vision.

PDP VII was developed on the basis of the targets set out in the National Energy Development
Strategy until 2020 with 2050 vision, which was approved in the Prime Minister’s Decision
No.1855/QD-TTg dated 27 December 2007. This strategy set out the orientation for power
development in Vietnam in four sectors: electricity, coal, oil and gas, new and renewable energy.
The objectives of this strategy are:

“To ensure an adequate power supply for socio-economic development; To develop oil
refineries, to increase the total capacity of oil refineries to 25-30 million tonnes of crude oil
by 2020; to raise the level of national strategic petrol and oil reserves to the equivalent of 45 days
of average consumption by 2010, 60 days by 2020, and 90 days by 2025; To complete the
program on rural and mountainous energy; To strongly switch the operation of the electricity,
coal and petroleum industries to competitive market mechanism regulated by the State, to form a
competitive electricity retail market in the post-2022 period, to form coal and petroleum trading
markets in the period from now to 2015; To actively prepare for the launch of the first nuclear
power generator in 2020. By 2050, nuclear power will account for about 15-20% of the total
national commercial energy consumption; To strive to connect the regional electricity grids (of a
voltage up to 500 kV) in 2010-2015, and to connect to the regional gas system in 2015-2020”.

The strategy also set out development orientations for the 4 energy sectors (electricity, coal, oil
and gas, and new and renewable energy), 3 development policies regarding national energy
security, energy price, and environmental protection, and 3 implementation solutions concerning
48
development investment, financial mechanism, and human resource development and
organizational mechanism. MoIT is responsible for managing and directing the implementation
of this strategy. Other ministries (MoNRE, MoF, MPI, MoST, and MoET), departments, local
governments, and relevant businesses, organizations and individuals are obliged to implement
this strategy accordingly to their responsibilities and functions.

(5) Other national infrastructure development plans.

The PDP VII in Relation to Regional Multipurpose Water Resources Management Plans

Water resources are needed not only for hydropower development but also for irrigation, water
supply for domestic use, and production activities. According to the overall natural resources
management plan, the plans for water resources development in different regions are as follows
(these plans do not include hydropower):

The Northern Economic Focal Region: Water from Da River, Red River, and Duong River
supplies to the urban areas of Mieu Mon, Xuan Mai, Hoa Lac, Son Tay, Ha Dong, Hanoi, urban
projects in Red River Basin as part of the larger Hanoi area and Hoa Binh, and the industrial
zones north of Red River (in Hanoi, Bac Ninh, Hai Duong, Hung Yen, and Vinh Phuc).

The Southern Economic Focal Region: Water from Tri An reservoir and Dong Nai River supplies
to urban areas and industrial zones located in the western part Dong Nai, southern part of Binh
Duong, and Ho Chi Minh City. Water from Dau Tieng reservoir and Sai Gon River supplies to
the southern part of Binh Duong and Tay Ninh, Ho Chi Minh City, and the eastern part of Long
An (where the Long An thermal power project is planned to be). Water from Tien River supplies
to the southern part of Tien Giang, and Long An.

Northern Middle Land and Mountainous Region: Big irrigation projects will be built in the Da
River, Lo River, Cau River and Luc Nam River to: (i) irrigate over 372,027 ha of agricultural
land; (ii) supply domestic water for residents in border areas in Ha Giang, Cao Bang, Lao Cai,
Lai Chau, etc.; and (iii) to protect Phu Tho and some communes in Bac Giang and some other
areas from flood.

Red River Delta: A multi-reservoir management system needs to be completed for the Red River
and Thai Binh River basin areas. Main objective is to improve the existing irrigation systems and
build more water supply facilities in Bac Hung Hai, Nhue River, Bac Nam Ha, Tich River, Day
River, An Kim Hai and Bac Duong, etc., to supply enough water for 860,000 ha of production
land for at least 85% of the time. Improvement plans for this area aim at increasing soil quality
by taking advantage of sediments from floodwater, expanding winter crop areas, cultivating 4,000
ha of the Red River flood plain, and increasing water supply for the industrial triangle of Hanoi,
Quang Ninh and Hai Phong and other industrial and urban areas.

North Central Region: There is a plan for management and protection of water resources in this
region, which involves an irrigation project for Ma River, Ca River, Huong River, and Chu River.
A multi-reservoir management plan will be developed for the river basin areas of Ma River, Ca
River and Huong River to improve water supply for domestic use, industrial activities, and to
irrigate 515,790 ha of production land. This will contribute to reduce desertification in dry sandy
land. Projects under development in Cua Dat, Ta Trach, Binh Dien, etc. should be completed.
49
Small and medium sized reservoirs should be built in Ban Mong, Ngan Truoi, Thac Muoi, Chuc
A, and other areas for hydropower development and better flood control for downstream areas.

South Central Region: A water resource management plan will be developed for the Tranh 2
River, A Vuong 1 River, Dac Drinh River, Dong Mit River, Dinh Binh River, Tro 1 River, Ba Ha
River, Ea Krong Ru River, Tra Khuc River, Thu Bon River, Ba River, Lai Giang River, Tra Cau
River, Ban Thach River, and Cai Nha Trang River, etc., for hydropower development, irrigation,
flood control and water supply for domestic, industrial and tourism activities. This plan will
contribute to improve flood control for lowlands such as Thoa and Tam Ky River Basins and
urban areas near the coast. Water discharge from the Hinh River hydropower plant will be used to
irrigate 91,968 ha of agricultural land.

Central Highland Region: An integrated water resource plan will be developed for big projects
on the mainstreams of Se San River, Srepok River, Ba River and Dong Nai River for water
supply, flood control, and hydropower development. This plan will ensure adequate irrigation
water for 486,921 ha of agricultural land to sustain crop yields in rainy season and enable the
expansion of cultivated land in dry season. It also should provide water for domestic and business
activities in resettlement areas, and remote residential areas along side the Ho Chi Minh highway.

South-East Region: An integrated water resource plan will be developed for Dong Nai 3 River,
Dong Nai 4 River, La Nga 3 River, Tan My River, Ta Pao River, Ly River, Phuoc Hoa River,
Ray River, and Vo Dat River, etc. This plan is to facilitate: (i) water supply for agricultural,
domestic and industrial activities (especially for the industrial triangle of Ho Chi Minh City – Ba
Ria Vung Tau – Dong Nai); (ii) hydropower development, aquaculture, flood control, and
environmental improvement. This plan should enable a water supply volume at 919,600 m3/day
for 342,082 ha of land, and a power generation capacity of 451 MW.

Other smaller plans will be developed to use water from Dinh River, Tam Bo River, Ca Stream,
Phuoc Thai River, Thien Tan pump station, Dong Phu group of lakes, Tan Hung water supply
facility, Tay Ninh pum station, and Ben Than pump station, etc. to supply for domestic and
income generating activities such as tourism and aquaculture at household level, and production
in industrial zones on the coast, and to contribute to fight desertification.

There is also the need to develop a mechanism for multi-reservoir management for this area and
to ensure the aquatic benefits of these rivers. This mechanism will provide a basis for
management activities of all relevant stakeholders.

Mekong River Delta: The water management plan for this area involves taking fresh water from
Tien River and Hau River and other big river systems such as the Tu Giac Long Xuyen, Quan Lo –
Phung Hiep, Nam Mang Thit, Dong Thap Muoi, O Mon – Xa No, Ba Lai, and Tra Su – Tha La to
supply for coastal districts in Bai Lieu, Soc Trang, Tra Vinh, Ben Tra and Ca Mau where people
have no access to fresh water. The plan will provide water for domestic and agricultural activities
and improve sanitation situation in residential areas during flood season. It will also provide the
means to shift the production structure in many areas from rice cultivation only to rice cultivation
combined with shrimp farming.

The water management plan for this region requires some adjustment in response to climate
50
change and changes in water use patterns in upstream countries.

It is obvious in these regional water management plans that water resources are used for many
other purposes rather than hydropower development. To achieve these purposes, the top issues of
concern are protection of water resources and development of multi-reservoir management
mechanisms for hydropower projects in PDP VII to ensure adequate domestic water supply.

The PDP VII in Relation to the Transport Development Strategy

The Vietnam’s Transport Development Strategy until 2020 with 2030 vision involves
improvement to the North-South road systems including expansion and improvement of the
National Highway No.1 section from Huu Nghi Quan to Nam Cam, improvement and connection
of sections of Ho Chi Minh Highway from Cao Bang to Dat Mui, construction of the North-South
Express Way and coastal road systems, and up-gradation of the Thong Nhat train line to national
and regional standards. The plan also initiates research for the development of a national North-
South express train line and a North-South passenger sea transport route.

The North: The plan is to build two new corridor expressways and a ring road for the Vietnam-
China economic region, sections of the North-South highway, several roads to city centers, and
ring roads around Hanoi to improve traffic conditions. Part of the plan is also to connect and
upgrade all national highways in the northern corridor and along the coast, to complete the
construction of the ring roads on the border and to upgrade all other national roads to meet with
technical standards.

A new section of the North-South express train line will be built to connect Hanoi and Vinh. New
high-speed train lines will also be built for the two corridors and the ring area of the Vietnam-
China economic region, for connections with seaports and big economic areas. The existing train
lines will be upgraded.

Within this plan, the seaports in Hai Phong and Quang Ninh will be expanded, and the Lach
Huyen international port will be built to handle ships of up to 80,000 DWT. Priorities will go to
developing container and specialized ports, and constructing passenger ports in Hai Phong and
Quang Ninh. Main ports in Ninh Binh - Ninh Phuc, Da Phuc, Viet Tri, and Hoa Binh will be
upgraded and expanded. The Phu Dong container port will be rebuilt. New passenger ports will
be built in Hanoi, Hai Phong and Quang Ninh. Research will be done on converting the Hanoi
port to passenger-only for tourism purposes.

The Noi Bai and Cat Bi international airports will need continual development work. The Dien
Bien and Na San airports will be upgraded. New airports will be built in Quang Ninh and Lao
Cai.

The Centre and Central Highlands

The transport development plan for this region includes construction of the central section of the
North-South highway, up-gradation and new construction of roads in the East-West economic
corridor and across-country-roads that connect the central coast and the highland provinces, and
connect seaports in Vietnam with neighboring countries such as Laos, Thailand and Cambodia.
Part of the plan is to connect and upgrade the roads along the coast, and also to improve all the
51
other national roads to meet technical standards. The plan also involves construction of corridor
roads near the border, the road system for the western part of central provinces from Thanh Hoa
to Quang Nam, and the East Truong Son road from Da Nang to Lam Dong.

For train line system improvement, the plan involves construction of central section of the North-
South express train line, a train line that connects Vung Ang and Cha Lo (Mu Gia), and train lines
connecting the highland provinces. The construction of a train line to support the exploration and
production of aluminum in the highland provinces and to connect the Central Highland with
seaports is also part of the plan.

Construction of the two piers of Van Phong international port will be completed. The operation of
these two piers is the first step to make Van Phong port a regional and international transshipment
port. The construction, up-gradation and expansion of Nghi Son, Cua Lo, Vung Ang, Da Nang,
Dung Quat and Quy Nhon ports will continue. More specialized ports will be constructed for
thermal power development and for aluminum export. Some locations will be selected to build
more international passenger terminals in Hue, Da Nang, and Nha Trang.

International air terminals in Da Nang, Phu Bai, and Cam Ranh will continue to develop. Chu Lai
airport will be upgraded to be a regional air cargo transport hub. Airports in Vinh, Dong Hoi, Phu
Cat, Tuy Hoa, Lien Khuong, Pleiku and Buon Ma Thuat will be upgraded to meet international
standards for domestic airports when possible.

The South

The plan for this region includes construction of the southern section of the North-South
highway, expressways connecting Ho Chi Minh City with other provinces and ring roads around
Ho Chi Minh City. It also includes up-gradation of existing roads and construction of new roads
for the main North-South route, connections of roads along the coastline, and improvement of
other national roads to meet technical standards.

Part of the plan is also to complete water routes connecting Ho Chi Minh City with the south west
provinces, to upgrade sea routes along the coast from Ho Chi Minh City, Ben Tre, Tra Vinh, Soc
Trang and Ca Mau. Existing domestic passenger and cargo ports will also be upgraded and new
ports will be built.

The express train line between Ho Chi Minh City and Nha Trang (part of the North-South
express line), between Bien Hoa and Vung Tau will be built. The train line between Di An and
Loc Ninh will also be built and connected to the trans-Asia railway. Construction of the train line
connecting Ho Chi Minh City with My Tho and Dong Thap is also part of the plan.

Improvement, up-gradation and new construction are required for the four groups of seaports in
the South-East, including:

- Cai Mep, Ben Dinh Sao Mai, and Vung Tau Group: international ports for the Southern
Economic Focal Region;

- Ho Chi Minh City Group: Hiep Phuoc port can handle ships of up to 50,000 DWT, Cai Lai port
can handle ships of up to 30,000 DWT, and Sai Gon, Nha Be port can handle ships of up to
50,000 DWT. The plan is to move all inner city ports to Cai Lai-Hiep Phuoc and Cai Mep-Thi
52
Vai areas. The Sai Gon port will be restructured to fit in with the city planning.

- Dong Nai Group: including ports in Dong Nai, Phu Huu, Nhon Trach, Phuoc An and Go
Dau.

- Ba Ria – Vung Tai Group: including ports in My Xuan, Phu My, Dinh, and Vung Tau.

A new water way will be developed to in Hau River to handle ships of between 10,000 DWT and
20,000 DWT. The Can Tho-Cai Cui port group will be developed to be the main port for the
South West region.

Investment will go to construction of Long Thanh international airport to make it a competitive

passenger and cargo airport in the region. The Tan Son Nhat airport will also develop to play a
supporting role for Long Thanh airport in the future. Can Tho international airport and Phu Quoc
airport will continue to receive investment to upgrade. An airport will be built in Vung Tau for
special service flights and other airline services. Airports in Ca Mau, Rach Gia and Con Dao will
continue to expand and upgrade.

The Multipurpose Water Resource Management Plan as well as the Transport Development
Strategy and land use plans were considered in PDP VII in order to avoid any nonconformity to
these plans and strategies. Assessment shows that there are advantages and challenges in these
plans and strategies that concern PDP VII. For example, the development of roads will reduce
some infrastructure costs and some other unpredictable losses of power development projects.

The Plan for Land Use and Industrial Parks

Total land area of Vietnam is 33,168,855 ha, including around 9.3 million ha for agriculture. On
average, it is 0.4 ha per capita. Around 7 million ha is flat land, and 25 million ha is sloping land.
Over 50% of the land in the delta and nearly 70% of the land in the mountainous area has poor
quality and low fertility level (including nearly 3 million ha of infertile soil, 5.76 million ha of
stony soil, 0.91 million ha of saline soil, and 12.4 million ha of sloping land at more than 25o).

By December 2010, 255 industrial parks were approved for development in a total area of 69,253
ha in a Prime Minister’s Decision. 171 industrial parks (43,580 ha) were in operation and 84
industrial parks (43,580 ha) were still in site clearance and construction phase. Only in 2010, 21
new industrial parks were developed in the country, taking up an additional area of 3,958 ha.
Total investment for infrastructure development of these industrial zones was at nearly 7,000
billion VND. According to the Prime Minister’s Decision No. 1107/QD-TTg, dated 21 August
2006, there will be total of 115 new industrial parks by 2015, which will take up around 26,400
ha, and 27 other industrial parks will be expanded, increasing the land area taken for industrial
activities to 30,000 ha for this period. Within three years from 2006 to 2008, 20,500 ha were
converted to land for industrial park development. Between now and 2020, 209 new industrial
parks will be developed in a total area of 64,210 ha.

According to the approved industrial development plan, more industrial parks will be located in
the poorer northern middle-land and mountainous areas (Yen Bai, Tuyen Quang, Hoa Binh, Bac
Can, etc.), the Central Highland (Đak Lak, Đak Nong, Gia Lai, Kon Tum, Lâm Đong, etc.), and
the South West region (Hau Giang, An Giang, Soc Trang) to promote development in these areas.
53
The figure below demonstrates the industrial growth rate in these areas:

Figure 1.4. The Number and Land Area of Industrial Parks by Economic Region, 2008.
Source: MPI; Survey data by the Environment Bureau, October 2009

Economic growth presents some advantages and challenges to power development. For example,
power development projects in areas with developed industrial activities or in underdeveloped
areas that are receiving investment for industrial projects will have more advantages than power
projects in areas without some level of development.

The biggest barrier for power projects in areas with developmental advantages is that the
compensation cost and payments for environmental services will be higher.

54
!"#$%"#$Ĉ"&'$()"$*+)$,-ѭӡ&($.')Ӄ&$/ѭӧ%$ $
$

45&'$6727$!ҧ&$ÿӗ$89:$'#ҥ%'$%"%$;.1$ӣ$0)Ӌ,$1<=$

Figure 1.5. Development and Planning of Industrial Parks in Vietnam

0)Ӌ&$1ă&($/ѭӧ&($ $ 23$
58
!"#$%"#$Ĉ"&'$()"$*+)$,-ѭӡ&($.')Ӄ&$/ѭӧ%$ $
$
Plans for National Parks, Nature Reserves, Special-use Forests, Biosphere Reserves, Areas
for
!"#$Tourism, and)ѭӡ*$
%&ҥ'%$ '('$ Wetlands
+"ӕ'$ ,-./$ 0%"$ 1ҧ&$ 2ӗ*$ 2%-3*$ *%-3*/$ 4ӯ*,$ ÿһ'$ 5ө*,/$ 0%"$ 5ӵ$ 24ӳ$ 6-*%$
+"#Ӈ*/$0%"$5"$7ӏ'%/$)8*,$ÿҩ2$*,ұ9$*ѭӟ'$$
There are a total of 50 national nature reserves and 16 marine nature reserves (in the islands of
4'5#$ 678$
Tran, '#ҥ%'$
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Son, Nam Yet, and in Nha Trang Bay, Nui Chua, Phu Quy, Hon Cau, Con Dao, and Phu Quoc).
.ӗ&$.ӓ=$Gҧ)$0I&$J$Kѫ&$4-B=$.L$F<#$.'BE=$FM$Kѫ&=$1<E$NӃ,=$0ӏ&'$1'<$4-<&(=$1O)$.'O<=$P'O$
Around 0.24% of the sea area in Vietnam is in marine protected area (according to the Prime
Q7M=$GH&$.<7=$.+&$Ĉҧ#=$P'O$Q7ӕ%$Aӟ)$:'#ҧ&($@=RST$U)Ӌ&$,V%'$AL&($;)Ӈ&$0)Ӌ,$1<E$&ҵE$,-#&($
Minister’s Decision 742/QD-TTg, dated 26 May 2010, on approval of the marine nature reserves
%"%$:'7$;ҧ#$,ӗ&$;)Ӈ&$WQ78Ӄ,$ÿӏ&'$Xӕ$YSRZQĈJ44($AӅ$A)Ӌ%$9'?$U78Ӌ,$678$'#ҥ%'$'Ӌ$,'ӕ&($:'7$;ҧ#$
in Vietnam until 2020).
,ӗ&$;)Ӈ&$0)Ӌ,$1<E$ÿӃ&$&ăE$R@R@=$&(B8$RDZ2ZR@C@$%ӫ<$4'ӫ$,ѭӟ&($.'V&'$9'ӫ[\$
The locations of these nature reserves and marine nature reserves are taken into account in PDP
0ӏ$,-V$%"%$:'7$;ҧ#$,ӗ&$,')?&$&')?&$AB$;ҧ#$,ӗ&$;)Ӈ&$ÿѭӧ%$]"%$ÿӏ&'$ÿӇ$'ҥ&$%'Ӄ$]IE$9'ҥE$U#$%"%$Uӵ$
VII to minimize the impacts of the proposed power development projects. A list of these nature
"&$9'",$,-)Ӈ&$ÿ)Ӌ&$ÿӅ$]7ҩ,\$^<&'$X"%'$%"%$:'7$;ҧ#$,ӗ&$,')?&$&')?&$ÿѭӧ%$ÿѭ<$%')$,)Ӄ,$,-#&($9'ө$/ө%$
reserves is included in the appendices of this report.
;"#$%"#\$$
1.2.3. Core and Prioritized Projects and Programs in the PDP VII
:;<;=;$>('$'%ѭѫ*,$24?*%/$5ӵ$(*$24ӑ*,$ÿ-Ӈ@$)A$ѭ"$2-3*$24&*,$!BĈ$C$$
The core and prioritized projects and programs in PDP VII were selected based on evaluation of
."%$%'ѭѫ&($,-_&'$AB$Uӵ$"&$,-ӑ&($ÿ)ӇE$ѭ7$,)?&$XӁ$Uӵ<$,-?&$&'ӳ&($9'I&$,V%'$AB$ÿ"&'$()"$,_&'$'_&'$
the implementation of PDP VI. In PDP VI, power demand forecast was based on the three growth
,'ӵ%$')Ӌ&$QGĈ$0`\$4-#&($QGĈ$0`=$&'7$%ҫ7$ÿ)Ӌ&$ÿѭӧ%$&(')?&$%ӭ7$Uӵ$;"#$,'5#$a$:ӏ%'$;ҧ&$,ă&($
,-ѭӣ&($C2T=$CDT=$AB$CYT$%'#$()<)$ÿ#ҥ&$R@@DJR@C@$,ѭѫ&($ӭ&($Aӟ)$R$:ӏ%'$;ҧ&$,ă&($,-ѭӣ&($b^P$
scenarios of 15%, 16% and 17% per annum for the period 2006-2010, with the GDP growth
Y=2T$ AB$
rates c=2T\$and
at 7.5% 0ӟ)$ 8.5%.
,)?7$ %'V$With
&I&($an%<#$ :'ҧ$ &ă&($
ambition to %7&($ %ҩ9$power
improve ÿ)Ӌ&=$ ÿҧE$ ;ҧ#$
supply <&$ &)&'$and
capacity &ă&($
to /ѭӧ&(=$
ensure
.'V&'$9'ӫ$ÿd$9'?$U78Ӌ,$QGĈ$0`$,'5#$9'ѭѫ&($"&$,ă&($,-ѭӣ&($CYTZ&ăE$WQ78Ӄ,$ÿӏ&'$CC@ZQĈJ
energy security, the Government approved the high scenario of 17% per annum in Decision No.
44($,'"&($YZR@@Y[\$478$&')?&=$,)?7$,'ө$ÿ)Ӌ&$,'ӵ%$,Ӄ$()<)$ÿ#ҥ&$R@@DJR@@3$%'Ӎ$,ă&($,-ѭӣ&($;_&'$
110/QD-TTG in July 2007. However, power demand growth was at only 13.6% per annum in
67I&$
the Ca=DTZ&ăE$
period U#$ ;ӏ$due
2006-2009, ҧ&'$
to'ѭӣ&($ ;ӣ)$ :'ӫ&($
the financial '#ҧ&($
crisis. :)&'$power
In 2009, ,Ӄ\$ 1ăE$ R@@3=$ ÿ)Ӌ&$
generation was Xҧ&$
at 87]7ҩ,$
TWh, ÿҥ,$with
cY$
a4e'=$%+&($X7ҩ,$,#B&$'Ӌ$,'ӕ&($:'#ҧ&($Ca\cDY*e=$,-#&($ÿ>$ÿ)Ӌ&$,'ѭѫ&($9'ҭE$/B$YD$4e'$&'ѭ$Xѫ$
total production of 13,867 MW, including sales electricity at 76 TWh, as illustrated in the figure
ÿӗ$Uѭӟ)$ÿI8\$
below.

Figure 1.6 Power consumption in the period 2001-2009

!"#$%ҫ#$ÿ&Ӌ'$())*+()),

+$$$$ !+#$%
!"#$%
"$$$$ !&#&% !,#$%
!"#$%ҫ#$ÿ&Ӌ'-. / "0

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!(#)% !(#+% !(#+%
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!$#$%
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+#$%
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($$! ($$( ($$' ($$* ($$& ($$, ($$" ($$+ ($$)

$
!"#$%&'(%%)*+,%-$ͭ%ÿ*͏#%.*/*%ÿ0̩#%122&31224%

0)Ӌ&$1ă&($/ѭӧ&($ $ 59
23$
The average economic growth rate in the period 2006-2009 was also lower than predicted, at
only 7.35% per annum. Economic growth rate for 2010 was estimated at below 6.7%. The
tables below present data of sales electricity growth rate by region, power production, and the
progress of the power grid and substation development projects.

Table 1.6 Sales Electricity Growth Rate by Region

Average Average Average

Region Indicator 2009 Growth Rate Growth Rate Growth Rate
2001-2009 2006-2009 2008-2009
Sales Electricity 76,046 14,3% 13,6% 12,8%
(GWh)
National Power Production 87,109 13,7% 12,9% 14,7%
(GWh)
Pmax (MW) 13,867 11,9% 10,6% 9,7%

Sales Electricity 29,445 13,8% 13,4% 14,5%

North (GWh)
Pmax (MW) 6,207 12,3% 12,4% 22,5%
Sales Electricity 7,426 14,1% 12,4% 13,7%
Centre (GWh)

Pmax (MW) 1,482 11,7% 10,9% 17,7%

Sales Electricity 39175 14,7% 13,8% 11,6%
South (GWh)
Pmax (MW) 7001 12,9% 11,4% 11,9%

Table 1.7 Power Production in PDP VI

2006 2007 2008 2009 đến 2010 2006-2010
Approved target -MW 861 2096 3271 3393 4960 14.581
Actual - MW 756 1297 2251 2286 3151 9.741
% 87.8% 61.9% 68.8% 67.4% 63.5% 66.8%

Table 1.8. Power Grid and Substation Development in PDP VI

Newly constructed and Plan Actual (%)

expansion (2006-2010) Qty. MVA-km Qty. MVA-km Qty. Capacity
500kV Substation 16 8,400 12 5,850 75% 69,6%
DZ 500kV 12 1,339 6 593 50% 44,3%
220kV Substation 89 19,326 63 13,001 70,8% 66,8%
DZ 220kV 121 4,666 66 3,238 54,5% 68,5%

60
PDP VI only achieved 66.8% of power production and 65% of power grid development against
the planned targets. Main reasons for this are:

(1) The global financial crisis: PDP VI was prepared in the context when Vietnam was
experiencing strong growth. Vietnam was expecting stronger growth in industries,
services, FDI, and an increasing power demand for industrial parks and other business
activities. In the years of 2008 and 2009, Vietnam’s economic growth was slowed down
by the global financial crisis, which consequently affected power demand. In 2009,
growth in sales electricity was at 12.8% per annum, which was lower than in 2006 and
2007 (14.4% and 13.9%, respectively). In 2009, growth in sales electricity was at 13.6%
per annum.

(2) Many power projects were implemented at the same time, which put pressure on
investment. Many investors did not have enough financial and human resources, which
undermined their ability to obtain loans.

(3) There was a lack of capacity and experience in tendering, selecting contractors and
consultants, and establishing management boards;

(4) Prices for equipment and material increased, which discouraged investors;

(5) Thermal power projects in the South struggled to import coal.

(6) There was a slow progress in site clearance. Collaboration with local authorities was also
lacking.

Learning from the lessons of the previous power development plan, prioritized projects in PDP
VII should aim to ensure the following conditions:

- If a project is included in the power development plan, the land acquisition plan should be
approved ahead of time.

- Investor for a project should have proven capacity to mobilize adequate investment capital and
access to fuel sources.

- A project can only be approved if it is proven to be efficient, produce little gaseous emissions,
and have little impacts on areas of ecological sensitivity such as national parks, nature reserves,
scenic areas, and cultural structures.

- Power grid development projects that have little impacts on nature reserves, natural forests,
areas of biological significance, and residential areas, should be prioritized. Priority should also
go to transmission line expansion projects connecting power stations with big cities that have
adequate financial resources.

1.2.4. General Approach of the PDP VII

After PDP VII is approved, it is recommended that the government maintain a Central
Government Steering Committee for the implementation of PDP VII as for PDP VI. It is also
recommended that representatives from IE, who were in charge of the development of PDP VII,
participate in meetings of the Central Government Steering Committee to consult the committee
61
and propose solutions for the implementation of PDP VII if needed.

Relevant ministries, departments, local governments and relevant agencies need to collaborate
closely during the implementation of PDP VII. Responsibilities of all involved are specified
below:

MoIT is responsible for:

- Regularly assessing the power demand-supply situation and supervising the implementation of
power source and power grid development projects. When necessary, MoIT should propose
adjustment to the plan (such as for the projects, selection of investors, implementation progress,
etc.) to reflect changes in the electricity sector in the implementation of the power development
plan.

- Approving site selections and detailed development plans for thermal power and hydropower
development projects, and calling for investment from national and foreign investors for these
plans. MoIT also provides direction for the exploration and extraction of natural gas for power
generation and other industrial and domestic use.

- Taking the lead, in collaboration with relevant ministries and departments, in developing a
financial mechanism for attracting investment to new and renewable energy development
projects.

- Taking the lead, in collaboration with relevant ministries and departments, in negotiating and
signing cooperation agreements and power import/export contracts with neighboring countries,
and agreements about the participation of Vietnam in the GMS power grid system.

- Providing direction and ensuring that investors and local governments make the right progress
in rural energy development.

- Directing research activities, pilot manufacture and use of new equipment in thermal power and
hydropower development.

MPI is responsible for developing policies and mechanisms to attract ODA and to use ODA in a
rational manner to enable sustainable and consistent development in the electricity sector.

MoF is responsible for taking the lead, in collaboration with relevant ministries and departments,
in developing mechanisms for mobilizing investment capital for the implementation of the PDP
VII.

The State Bank of Vietnam is responsible for taking the lead, in collaboration with relevant
ministries and departments, in developing suitable policies and mechanisms to motivate
investment for the sustainable development of the electricity sector.

Electricity of Vietnam is responsible for ensuring safe and stable power supply for socio-
economic development needs. EVN is also responsible for implementing power source and power
grid development projects in a consistent and efficient manner.

Part of EVN’s responsibility is to develop infrastructure for thermal power development projects
that are either fully or partially funded by EVN. EVN is also expected to apply measures to
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reduce power loss in transmission and implement power saving programs in power production
and consumption to achieve sustainable development.

Local governments, organizations and individuals:

- Local governments are expected to collaborate with project investors on issues such as site
clearance, compensation, and resettlement for power development projects.

- Agencies, organizations and individuals working in the electricity sector are responsible for
implementing Decision No.79/2006/QD-TTg, dated 14 April 2006 by the Prime Minister on
approving the National Program for Energy Efficiency and Conservation, and Circular No.
19/2005/CT-TTg, dated 2 June 2005 by the Prime Minister on power savings in power
consumption.

It is further recommended to develop a reward – penalty scheme for investors who have
permission from the Government to develop power projects to increase their accountability.

A big issue for the implementation of PDP VII is investment capital, especially the mobilization of
investment capital. It is recommended that the government develop a mechanism through which
EVN and power production investors can approach ODA, OCR, and low-interest loans, etc. Power
projects developed under the Build-Own-Operate (BOO) and the Build-Own-Transfer (BOT)
arrangements play an important role in promoting competitiveness in the electricity market and
reducing pressure on government budget. It is also recommended that the government create a
legal framework to facilitate the implementation of power source development projects.

1.3. Scope of Research of the SEA

1.3.1. Scope of Research of the SEA

1.3.1.1. Geographical Coverage

The national power development plan provides options for power development (i.e. thermal
power, hydropower, nuclear power, and renewable energy), and power grid expansion to ensure
safe, adequate, and reliable electricity supply for economic development, social welfare, and
national security and defense in Vietnam.

The geographical coverage of the SEA is in line with the power development projects included in
the PDP VII:

(1) All power development projects are designed to work well with regional features, based
on a development principle of: “Finding a balance in power development in each region,
considering the efficiency and limitation of the transmission system to ensure safe and
reliable electricity supply in every region and nation-wide”. A list of power projects with
operation timeframe can be found in Appendix 1.

- The North West: focus is on hydropower and pumped storage hydropower projects.

- The North East and the Red River Delta: focus is on coal-fired thermal power projects
using domestic coal.

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- The North Centre and South Central Coast: focus is on developing big coal-fired thermal
plants and nuclear power plants in the eastern part of the region, and hydropower projects
in the western part and in Laos.

- The Central Highland: focus is on hydropower projects and collaborative power projects
with Laos and Cambodia.

- The South East and Mekong Delta: focus is on developing big coal-fired thermal power
plants using imported coal, and gas-fired thermal plants.

(2) The power grid expansion plan has a regional focus:

- The national power grid is divided into three systems:

The northern power grid system: including all northern provinces up to Ha Tinh (the Ha
Tinh 500 kV substation).

The central power grid system: including provinces from Quang Binh to Dak Nong (Di
Linh substation)

The southern power grid system: including all provinces south of Dak Nong.

The SEA only covers large and medium sized hydropower projects with capacity of over 30 MW
which are included in PDP VI and PDP VII. Small hydropower projects approved by provincial
governments are not included for assessment in the SEA.

Most of the 70 power development projects in PDP VII were also in PDP VI. Therefore,
assessment in this SEA only focuses on around 17 new hydropower projects that either are under
construction or will soon be under construction.

The SEA includes assessment only for the 220 kV and 500 kV transmission lines in the national
power grid.

The SEA does not take into account independent power projects in island areas.

The GMS is working to develop several cross-border power transmission projects. One of the
projects is the ADB funded “Facilitating Regional Power Trading and Environmentally
Sustainable Development of Electricity Infrastructure in the Greater Mekong Sub-region”. This
project will be implemented in several phases. A strategic environmental impact assessment will
be conducted for these projects. At the time this SEA was being conducted for PDP VII, this
strategic environmental impact assessment had not started. Therefore, information on this subject
is still limited. In this SEA, it was only possible to have some indicative information about where
the cross-border power transmission lines might be in the future if the power trade negotiations
are successful.

Geographical coverage of the SEA is illustrated in the map below:

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1.3.1.2. Timeline
Research in this SEA focus on two periods: between 2006 and 2010 (the PDP VI period) and
between 2011 and 2030 (the PDP VII period). The overlapping period of the two plans is 2011-
2020.

For the period 2006-2010, there is enough information for assessment of environmental trends in
the past.

For the period 2011-2015, there is adequate information from the SEAs and there are also
records of site planning for power development projects.

For the period 2016-2020, detailed information is only available for a few projects, which by that
time will be at a more advanced stage.

There is almost no information available from the projects planned for the period 2020-2030.
Therefore, assessment for this period is only indicative.

In short, in-depth assessment is provided for projects within the period 2011-2020. For the period
2020-2030, assessment is only indicative.

Under the scope of research of this SEA, key environmental impacts of PDP VII are assessed
based on the characteristics of each region.

1.3.2. The Key Environmental Issues of PDP VII

The scale of PDP VII raises a wide range of environmental and social issues that need to be taken
into account in the SEA. The plan covers the whole country, affects all sectors of the economy
and every section of the society, and has impacts on all aspects of the environment. In some
cases, such as greenhouse gaseous emission, acidification, or electricity import from hydropower
plants in neighboring countries, the environmental impacts of the PDP VII go beyond the borders
of Viet Nam. The scale of these diverse impacts is hard to assess in the SEA due to the fact that
there was not enough time for consultation and detailed assessment of all the aspects of the
potential impacts. Only main and recognized impacts are included in this SEA.

With properly implemented mitigation measures, many of the negative environmental and related
social impacts of power development projects can be reduced to acceptable levels. As will be
discussed later in this report, mitigation measures can effectively prevent, minimize, or
compensate for most adverse impacts, but only if they are properly implemented. These include
anticipatory measures that need to be put in place before the planning and implementation of
individual projects starts: for example the adjustment to original plan, the creation of an adequate
system for handling radiological materials or the extension of the protected area system.

There are, however, environmental impacts which occur at some power development projects that
cannot be avoided, but can only be mitigated at an acceptable level to ensure a balance between
economic growth and environmental sustainability. These include:

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(i) Loss of forest and biodiversity Some unique natural habitats are affected by
power sources development or power grid development projects;
Ecosystems and biodiversity impacts are an important issue in relation to power
development, with potentially serious and widespread impacts from
hydropower, transmission lines and thermal power stations. Some reservoirs
permanently flood extensive natural habitats, with local and even global
extinctions of animal and plant species. Particularly hard-hit are riverine forests
and other riparian ecosystems, which naturally occur only along rivers and
streams. From a biodiversity conservation standpoint, the terrestrial natural
habitats lost to flooding are usually much more valuable than the aquatic
habitats created by the reservoir. One occasional exception to this rule is that
shallow reservoirs in dry zones can provide a permanent oasis, sometimes
important for migratory waterfowl and other terrestrial and aquatic fauna.

Hydropower projects often have effects on fish and other aquatic life.
Reservoirs positively affect certain fish species (and fisheries) by increasing
the area of available aquatic habitat. However, the net impacts are often
negative because
(a) the dam blocks upriver fish migrations and affects downstream passage.
Fish passage facilities frequently cannot restore the pre-dam ecological balance
of a river, in terms of species composition or fish migrations;
(b) many river-adapted fish and other aquatic species cannot survive in
artificial lake;
(c) changes in downstream flow patterns adversely affect many species;
(d) water quality deterioration in or downstream of reservoirs kills fish and
damages aquatic habitats. Freshwater molluscs, crustaceans, and other benthic
organisms are even more sensitive to these changes than most fish species, due
to their limited mobility.
The impacts of cooling water on the surrounding ecosystems vary depending
on the location and capacity of the nuclear power plants. Cooling water can
have serious impacts on ecosystems that are sensitive to temperature changes,
Special attention should be paid to marine ecosystems in areas such as coral
reefs and riverine ecosystems where the cooling water discharge is more than
the river water flows.
Transmission lines also have big impacts on ecosystems and biodiversity.
Construction of new lines, based on a 45 meter clearance tract for 500kv lines
and a 23 meter clearance tract for 220kv lines, results in thousands of hectares
of forest cleared and fragmentation of areas of sensitive ecosystems.
(ii) Downstream hydrological changes, issues related to sustainable water
resource management and concern about potential downstream salt intrusion:

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Major downstream hydrological changes can affect riparian ecosystems dependent
on periodic natural flooding, exacerbate water pollution during low flow periods
and increase saltwater intrusion near river mouths. Sedimentation can reduce
longevity and water level in reservoirs. Construction of dams results in reduced
sediment and nutrient loads downstream of dams can increase coastal erosion and
damage the biological and economic productivity of rivers and estuaries. The
construction of a dam inevitably alters the water flow within a river, and in basins
where several dams are located the cumulative impact can be profound. If managed
appropriately, this can be beneficial through reducing flood risks and improving dry
season water flows, but this requires multi-purpose objectives in the management
system.
(iii) Impacts on environmental quality
Impacts on water quality: The biggest effect of thermal power is the use of large
quantities of cooling water, which can cause significant impacts on water resources
and aquatic ecosystems. The use and release of cooling water can affect riverine
and marine ecosystems and water quality due to changes in oxygenation and
dilution of pollutants.
The damming of rivers can cause serious water quality deterioration, due to the
reduced oxygenation and dilution of pollutants by relatively stagnant reservoirs
(compared to fast- flowing rivers), flooding of biomass (especially forests) and
resulting underwater decay, and/or reservoir stratification. If effectively
implemented, watershed management can minimize sedimentation and extend a
reservoir’s useful physical life, through the control of forestry, road construction,
mining, agriculture, and other land use in the upper catchment and lower river basin
area. Aside from watershed management, other sediment management techniques
for hydroelectric reservoirs may at times be physically and economically feasible;
they include, among others, upstream check structures, protecting dam outlets,
reservoir flushing, mechanical removal, and increasing the dam’s height.
Impacts on air quality: Human health impacts from both gaseous pollutants and
particulate matter releases. Acid rain is caused by gaseous emissions such as SO2.
Acidification of soils and water caused by SO2 and gaseous pollutants. Acidification
caused by sulfur and nitrous oxides in rainwater is an increasing issue at regional
scale for the Mekong region. Many parts of Vietnam suffer from the impacts of
acidification, affecting water catchment and wetlands. The electricity sector is one
of the main sources of these gaseous pollutants, accounting for 25% of the total
gaseous emissions of Vietnam. Although the existing measuring system is not
accurate enough to produce an overall picture, forecast measurement and
modeling of future trends show that both the scale and level of impacts by
acidification will increase significantly in the future.
(iv) Solid waste and toxic waste: This is not an issue for hydropower plants but for
thermal power projects, especially coal-fired thermal plants. The transmission grid
also emits a large quantity of oil from the transformers.
(v) Natural resources efficiency and conservation: This is an issue related to power
development plan, which use fossil fuels such as coal, oil and gas for power
generation. These natural resources are limited and at risk of exhaustion.69Other
natural resources such as soil, water, and limestone are also often used in power
development projects, especially in the construction phase. The exploitation and use
of these natural resources need proper planning and direction.
(vi) Environmental risks and accidents: there are impacts on the environment that are
not human-induced. These impacts often result in big and serious losses. It is not
easy to predict and avoid these impacts. Environmental risks and accidents can be
human-induced or natural. Some of these risks and impacts are fire, explosion,
radioactive leak and toxic waste, flood, drought, etc. Some of these impacts are
resulted from climate change.
(vii) Climate change: Climate change is caused by emissions of CO2 and other
greenhouse gases. Power generation using fossil fuels (especially coal) is one of the
biggest sources of greenhouse gases. Another source of greenhouse gases is
hydropower reservoir. The greenhouse gaseous emission per capita in Vietnam is
still lower than in developed countries. However, it is increasing fast. Vietnam
already has national policies and international commitments in reducing greenhouse
gaseous emissions. There needs to be specific action plans to reduce greenhouse
gaseous emissions, especially in the development of the electricity sector.
(viii) Energy security in the context when traditional primary fuels are running out.
There is increasing reliance on the international fuel market when fuel prices are
climbing.
Environmental conflicts, risks and accidents happen in many areas such as conflicts
over water resources, natural resources, land resources for project development,
forest resources, etc. The scale and severity of these problems vary depending on
their characteristics. However, they tend to persist and result in heavy
consequences.
(ix) Social issues, resettlement and impoverishment: The biggest impact is
displacement of people due to the construction of power plants, dams or reservoirs.
Hydropower development results in the largest number of displaced people.
According to regulations, resettlement should at least not worsen the situation of the
displaced people and should aim to improve the living standards of the displaced
people through the compensation package.
Vietnam currently has developed policies and regulations on resettlement and
compensation based the 2004 Law on Land. However, these policies and regulations,
as reviewed in the previous section, only focus on compensation and support for
short-term verifiable losses such as loss of land, plants and houses. Long-term
impacts such as loss of livelihood, and other psychological aspects, such as tradition
and cultural conditions, sense of belonging, etc., are not determined for
compensation. Resettlement and compensation are currently handled at project
level. Investors are expected to follow provincial regulations about resettlement.
Strategic environmental assessment is mandatory for all power development
projects. However, because social impact assessment is currently not mandatory, it
is still a challenging job to undertake. Pressing issues are the preservation and
promotion of cultural assets (including in sacred areas) due to reservoir filling and
construction of power plants and changes to the labor force and population structure
in affected areas.
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(x) Livelihood: Up to now, resettlement in Viet Nam has been aiming at stabilizing
people’s livelihoods in the short term, with the hope that this would lead to
subsequent development. However, experiences show (Hoa Binh, Yali, Song Hinh)
that in the long term, displaced people’s living standard has not been improved.
Rather, in many cases, the living standard has deteriorated. Generally, displaced
people, of which a great majority are ethnic groups other than Kinh, has had
difficulties in adapting to the new situation in the resettlement areas. This is not only
due to the fact that the resettled areas are alien to the newcomers, but also that the
host people often is of another ethnic group, that in-migration is attractive due to the
‘new frontier’ atmosphere, that new agricultural plants and techniques are
introduced, that the existing forest is not open for exploitation, that the housing style
and location is not according to the preferences of the displaced people etc.
(xi) Community Health: Community health is directly related to elements of the
environment such as water, soil and air. If these elements of the environment are
affected, community health is also affected directly through exposure to polluted air
and food, or indirectly by pollutants that are stored in plants or animals in the food
chain. The severity of health impacts depends on the level pollution of the
environmental elements.
(xii) Agriculture and food security: With the level of industrial development as planned,
it is expected that agricultural land would rapidly reduce to 3.8 million ha. Vietnam’s
population is increasing and land quality is deteriorating. Food security is an issue
of national interest. Climate change might also affect national food security.
With properly implemented mitigation measures, many of the above impacts can be reduced to
acceptable levels. The single most important environmental mitigation measure for a new power
project is good site selection, to ensure that the proposed dam, plant or transmission line will be
largely benign in the first place. Adverse environmental impacts can be properly mitigated by
corresponding mitigation options and risks associated with all of these types of impacts can be
reduced through good project site selection.

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Chapter 2: The Environmental Issues Related to PDP VII

2.1. Brief Description of Environmental Conditions

2.1.1. Topographic, Geographic and Geological Conditions
a. The North West: This area locates on the left of Red River and upstream of Da River.
Elevation ranges from 100 - 800 m above sea level. Sharing its borders with China and Laos, this
area has national defense and security importance. High mountains in this area include Pu Si
Lung (3,076 m), Pu Dinh (1,886 m), and Pu Huoi Long (2,178 m). This area is the most
mountainous area in Vietnam with hundreds of mountain ranges running North West to South
East from Lai Chau to Son La, including many peaks of between 2,090 – 3,080 m above the sea
level. The topography of this area consists of high mountains, steep slopes, and sharp
fragmentations with rivers, streams, and narrow valleys in between. It is rare to see large, level,
and continuous strips of land in this area. This topography is favorable for hydropower
development. Many big hydropower plants and projects are located in this area.

The North West has unfavorable climate conditions for living and agricultural development.
However, this is the area with lots of mineral resources such as coal, iron, manganese, nickel,
copper, lead, zinc, mercury, rare earth, gold, mineral water, limestone, clay, etc. Rare earth
reserves in this area account for almost 100% of the national rare earth reserves. This North West
area also has high hydropower development potential, accounting for 56% of the national
hydropower development potential.

Regarding land use, about 240,000 ha in this area can be used for agriculture and 1,783,000 ha for
forestry and other economic activities. Quality of land in this area is relatively good, although
facing deterioration. Soil quality is suitable for many types of high market value plant to grow
and yield well.

Annual rainfall varies between 1,500-1,800 mm, providing adequate water for domestic and
economic activities. However, due to the topography of the area, access to water during dry
season is limited in many mountainous parts, affecting living and production activities.

b. The North East

This area covers mountainous and middle land of the North with many limestone and soil
mountains. The eastern part of this area is lower with four curvy mountain ranges starting from
Tam Dao, and running East-West to the sea, namely Song Gam, Ngan Son, Bac Son and Dong
Trieu. The height ranges between 50-500 m. These mountain ranges extend to the South China
Sea, creating the renowned Ha Long Bay.

The North East consists of the mountainous and hilly land left of Red River and the thin delta
strip along the coast in Quang Ninh province. This area has 250 km of coastline on the East side,
facing around 3,000 islands. It is possible to build deep-water ports in several locations in this
area, which can be of importance not only to the northern Vietnam, but also to the southwestern
China. This area shares 1,180 km long land border with China in the North (out of the total of
nearly 1,150 km long land border between Vietnam and China).
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Although located within the tropical rainfall climate zone, this area is directly affected by the
North-East seasonal winds. This area therefore is divided into many sub-climate areas, enabling a
diverse range of crop and husbandry varieties, including many of high economic value such as tea
(Tuyen Quang, Thai Nguyen, snow tea, yellow tea), anise, cinnamon, lacquer tree, plum, apricot,
peach, many precious herbs, etc.

The North East is rich in minerals, including those with large reserves such as coal (90% of
national reserves), apatite (100% of national reserves), and copper (70% of national reserves).
There are also limestone (for cement production), iron, lead, zinc, tin, etc. The availability of
mineral reserves is the strength of this area. It forms the basis for the mineral exploration and
processing industry, which contributes to the regional and national modernization and
industrialization. This is also the area with high concentration of thermal power plants using
locally available coal.

Land resources in this area are suitable for the development of agriculture and forestry. Total land
area is about 5 million ha, including 1 million ha for agriculture and 4 million ha for forestry. Parts
of the land resources are used for industrial parks and urban development. This area has much
potential for developing agriculture (industrial plants, specialty plants, and big cattle), industry
(energy resources, metal and non-metal resources), tourism, marine economy, and forestry (only
to some extend – as the forestry resources in this area are much deteriorated).

c. The Red River Delta

This area covers a large part of the east, centre and northwest of northern Vietnam. The eastern
part of this area consists of a coastline, lowland areas of 0-2 m above sea level, and coastal
strips of sand dunes. The central part of the area is 2-4m above sea level with large fields suitable
for growing crops.

The Red River Delta is an economic hub for the North East, North West, the northern
mountainous areas, and the Central Region. Thanks to its location, the Red River Delta has many
favorable conditions to accommodate economic, trade, and international transport activities. It is
also a large electricity consumption centre of the country. Therefore, there is a need for
developing thermal power plants in this area in PDP VII to accommodate local power demand
and reduce transmission loss.

All big rivers running through the Red River Detla start from the mountainous areas in the North
and end in the South China Sea. All impacts on the environment upstream of these rivers such as
loggings and soil erosion directly affect the Red River Delta.

d. The North Centre and South Central Coast

The North Centre is adjacent to the Northern Economic Focal Region and is where the Central
Focal Economic Region is located. All the North-South train lines and roads, and some East-West
roads (number 7, 8, 9, 29) pass through this area. There are also many seaports in this area,
which make inter-provincial, regional and international transport convenient. This area is
typically long and narrow. The Truong Son Mountains occupy the western part of this area and the
South China Sea is on the east side. This area also has narrow deltas, mountainous, hilly and
coastal lands, and islands, which are good conditions for a diverse economy. Regional topography
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is complex. Regional weather conditions are hash and unpredictable. There are many deep-water
areas and river mouths in this area, suitable for the development of small to large seaports to
accommodate inter-provincial, regional and international transport.

Weather conditions in the North Centre are not favorable for living and production activities.
80% of the land in this area is either mountainous or hilly, and the remaining 20% of the land is
coastal delta with many sand dunes and flood plains. Land area available for agriculture is
limited. There are land sites suitable for industrial and urban development. This area ranks second
to the Central Highland in terms of forest resources. However, most forests in this area are of
poor quality.

Marine resources are abundant with 670 km of coastline, 23 river mouths, many beautiful
beaches and swamps, and a wide continental shelf offering many resources. This area has
potential for developing tourism and economic activities using marine resources.

Mineral resources: 60% of national iron reserves 80% of national tin reserves, and 40% of
national limestone reserves are located in this area. Large reserves of stones (marble, limestone)
and clay can also be found here. There is also potential for oil and gas exploration in this area.
These are good conditions for developing industrial activities such as mineral exploitation, metal
and construction materials production, making the North Centre an outstanding area for industrial
development.

Hydropower potential in this area is estimated at around 7 billion kWh in 30 locations that do not
require large areas for reservoir filling. The economic structure of this area can be developed to
take full advantage of its potential for irrigation, hydropower, transportation, agriculture,
forestry and aquaculture.
The South Central Coast covers the coastal provinces from Da Nang to Binh Thuan. The western
part of this area consists of many mountains and hills, with some peaks of the South Truong Son
reaching over 1,500 m above the sea level. Elevation decreases gradually from the west to the
east of the area. The eastern part of the area covers the coastal delta from Hai Van Pass to end of
Binh Thuan province. The northern part of the area consists of three relatively large delta areas in
Quang Nam, Quang Ngai and Binh Duong. The southern part of the area covers narrow delta
strips in Khanh Hoa and Ninh Thuan, which are separated by Cu Mong and Ca mountain passes.

The South Central Coast has great geographic advantages. It is located in most land, sea, and air
travel routes. It is also close to Ho Chi Minh City and the South East economic triangle. It is the
gateway to the Central Highland and it is where the trans-Asia route can connect with
international seaways are. The long coastline offers many beautiful beaches, scenic spots and
renowned cultural and heritage sites. This area can potentially become one of the biggest tourist
destinations in Vietnam and South East Asia.

Marine resources are the biggest natural advantage of this area, both in terms of fishing and
aquaculture. There are also a series of deep-water ports that can handle big ships. Developed
infrastructure and land availability around ports provide good conditions for the development of
industrial parks. With great geographic advantages, the South Central Coast can be chosen to be
the sea gateway for the “trans-Asia” route.
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Mineral resources in this area are quite diverse. However, mineral reserves are not big. Some
minerals are of high economic value such as glass sand, bentonite, graphite, titanium, granite,
gold, and mineral water. There is also a potential for oil and gas exploration in the sea.

e. The Central Highlands

Elevation ranges from 100-800 m above sea level. This area shares borders with both Laos and
Cambodia in Kon Tum province. This area covers a large plateau surrounded by high mountains
and the South Truong Son range in the East.

The Central Highlands is divided into three sub-climate areas: the North Central Highlands (Kon
Tum and Gia Lai), the Mid-Lowlands (Dak Lak and Dak Nong), and the South Central Highlands
(Lam Đong). With the advantage of having bazan red soil at the elevation of from 500 – 600 m
above sea level, the Central Highlands offers great conditions for industrial plantation such as
coffee, cocoa, pepper, mulberry, cashew, and rubber. This area also has great mineral resources,
which are currently unexplored, except for bauxite.

The Central Highlands is divided into many sub-areas with different ecological conditions, which
can support the development of a wide range of plants and animals.

The Central Highlands also has large forest areas with diverse vegetation and high potential for
tourism. The Central Highlands can be considered the roof of the Central Region, providing great
protection for the entire region. However, illegal loggings and exploitation of forest products in
this area can potentially lead to damages to natural resources, exhaustion of forest resources, and
changes to the ecology and environment at a high level in North Central Highlands and South
Central Highlands.

Surface water resources: there are four main river systems in the area: (i) the upper Se San River
with total river basin area of 11,450 km2; (ii) the upper Srepok River with total river basin area
of 11,721 km2; (3) the upper Ba River with total river basin area of 11,410 km2; and (iv) the
Dong Nai River with total river basin area of 22,600 km2. Average water flow in the Central
Highlands is at 50 billion m3 per annum. Water is unevenly distributed throughout the year in
this area. This is the main reason for flooding in rainy season and prolonged drought and severe
water shortage in dry season. Irrigation and multipurpose water resources management of
reservoirs is a decisive factor for the socio-economic development of this area. Large
quantities of the annual rainfall are stored in rock aquifers. Therefore, groundwater is an
important resource in the Central Highlands.

Forest resources: The Central Highlands has the most intensive forest systems in the country,
accounting for 31.9% of national forest area and 36.3% of national forest reserves (41.2% of rich
forest and 51.2% of medium range forest). This is the only area in Vietnam where forests
resembling tropical rainforest can be seen.

Mineral resources: bauxite, gold, construction materials, precious stones, peat and brown coal are
available in this area. Apart from that, nonferrous metals such as Sn, W, Pb, Zn, Sb, and Pirit can
also be found in the Central Highlands.

The Central Highlands is a strategic area in terms of economic development, political stability
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and national defense for Vietnam and Indochina. With elevation ranges from 250-2,500 m above
sea level, the Central Highlands is the source of four big river systems. The road system in the
Central Highlands consists of national roads number 14, 19, 20, 24, 25, and 27. There are close
socio-economic and environmental ties between the Central Highlands and the South Central
Coast. The Central Highlands is also directly next to Laos and North East Cambodia.

f. The South East

This area has an elevation of less than 50 m above sea level. It borders with Cambodia in the
West, with the Mekong Delta in the South and South West, and with the South Central Coast
and South China Sea in the East and South East, respectively. Geographic advantages help this
area to be one of the best economic areas in Vietnam and South East Asia.

The South East is one of the key economic areas in Vietnam with Ho Chi Minh City as a centre
for economic and commercial activities. The biggest industrial area of the South East is in Dong
Nai province, with high concentration of large industrial parks in Bien Hoa City.

The South East is a developed industrial area with established infrastructure and experiences in
socio-economic development. The transportation network in this area is especially more
developed than in other areas, both in land and river transport. Sea and air transport in this
area is also quite developed. Land resources are also available for industrial, infrastructure and
urban development without affecting agriculture, especially wetland rice cultivation.

Land resources: Around 1.3 – 1.4 million ha are suitable for industrial and fruit tree plantation and
forestation.

Water resources are not abundant in this area. Water supply mainly comes from Dong Nai River
and Sai Gon River.

There are oil reserves in the continental shelf in this area, with an estimated amount of around 3-4
billion tonnes of oil and 500 billion m3 of gas. These are important sources of energy for power
generation, industrial development, domestic use and export.

g. The Mekong Delta

The Mekong Delta is located around the last section of the Mekong River. It has a total area of
3.96 million ha, which is 5% of the total area of the Mekong River Basin. The Mekong Delta
covers 12 provinces, accounting for 12% of the total land area of Vietnam. The Mekong Delta
borders with Cambodia, is near Laos, and next to the Central Highlands and the South East. The
topography is level with an intensive network of rivers and canals, making water transport in
this area the most convenient in the country.

The Mekong River Delta is one of the most fertile deltas in South East Asia and in the world. This
is an important area for food production, aquaculture and fruit tree plantation in the country.
This area is also recognized as having great potential for power generation using husks in
the future.

The Mekong Delta also has some favorable and unique weather conditions. This area is more
protected from natural disasters like typhoon. 76
Water resources: Water supply for the Mekong Delta comes from the Mekong River and
rainwater, both of which are highly seasonal. The intensive canal network in the Mekong Delta
plays a big role in supplying water all year round for this area.

The Mekong River has created many types of natural habitats, ranging from tidal plain, sand
dune, wetland, floodplain, lowland, peat swamp, to fertile alluvial soil adjacent to Mekong River
and alluvial soil layers further away from the river.

There is a potential for oil exploration on the continental shelf in the South China Sea near the
Gulf of Thailand. Minerals available in this area are limestone, granite, clay, stone and peat, etc.
The Mekong Delta has a long coastline of over and around 360,000km2 of exclusive economic
zone adjacent to the South China Sea and the Gulf of Thailand, which is very convenient for
developing marine economic activities. The Mekong Delta is located near the Southern
Economic Focal Region, which is the most developed economic area in Vietnam, and other
South East Asian countries (Thailand, Singapore, Malaysia, the Philippines and Indonesia, etc.),
which present opportunities for important market and partnership development.

Many important sea and air routes are connected to this area, especially the South Asian and
South East Asian routes. The Mekong Delta is also next to Cambodia, Laos, the Central Highland
and the South East, which have rich mineral and forest resources for the development of power
generation using oil, gas and coal.

2.1.2. Climatic and Hydrological Conditions

(Source: Regions, Provinces, and Cities under State Management: Potentials and Prospect until
2020, Institute of Strategy and Development, Ministry of Science and Technology, National
Political Publishing House, 2009)

a. The Red River Delta

This region has tropical monsoon climate, with seasonal cold winds from the North. It has a cold
winter with little sun and drizzling rain, which makes it possible to diversify crops. Summer is
hot with lots of rain. The rainy season almost overlaps with the hot season.

Average hours of sunshine range from 1,400-1,700 hours per year.

Average annual temperature is from 23-24oC. Average temperature of the hot months is from 28
– 29oC. Highest temperature ranges from 38-41oC.

Mean annual rainfall is from 1,400-1,800 mm. Rainy season is from April to October. Rainfall
mostly occurs in July, August and September. The dry months are often the winter months.

Average humidity throughout the year ranges from 82-85%.

Average wind speed is from 1.5-2 m/s, with highest wind speed reaching from 30-40 m/s.
Common winds in winter are from the East and North East. Common winds in summer are from
the East and South East.
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The Red River Delta is under strong influence of the South China Sea, especially in terms of storm
and flood during rainy season. In dry season, salt intrusion often affects river water and
production activities along the coast. Reverse flow in high tide carries salt water in land
through river mouths to up to 20 km in Red River and 40 km in Thai Binh River. Wash-off
from river basins is also quite strong. Red River carries the largest amount of sand and silt of all
rivers in Vietnam. This amount of wash-off from river basins creates hundreds of hectares of
new land towards the sea. Sand and mud often block many estuaries and navigation canals and
dredging is often required.

b. The North West

Typical weather feature of this area is a cold winter with a considerable amount of sun and frost in
some years and not so much drizzling rain. Summer in this area is hot with dry hot winds from the
West. This area is not directly affected by tropical storm and typhoon. It has considerable rainfall
in rainy season, which almost overlaps with winter.
Average hours of sunshine range from 1,800-2,000 hours per year. Most months have more than
100 hours of sunshine. Average annual temperature is from 18-22oC. Average temperature of the
hot months is from 26-27oC. Highest temperature ranges from 38-40oC. Average temperature of
the cold months is from 13-16oC. Lowest temperature ranges from -2-2oC.

Mean annual rainfall is from 1,200-1,600 mm in Son La and from 1,600-2,000 mm in Lai Chau
and Dien Bien. Rainy season is from April to September. Rainfall mostly occurs in June, July and
August. The least rainfall is in November, December and January. Droughts often occur in winter
and spring.

Average humidity throughout the year ranges from 82-85%.

Average wind speed is from 0.8-1.5 m/s. Winds come from the East for most of the year. Highest
wind speed is no more than 35 m/s.

Water resources are abundant and of good quality, distributed evenly in rivers, streams, lakes, and
rice fields in the area.

c. The North East

Typical weather feature of this area is a cold winter with little sun, and a lot of frost and drizzling
rain. Summer is hot with a lot of rain. Rainy season almost overlaps with hot season.

Average hours of sunshine range from 1,400-1,800 hours per year.

Average annual temperature is from 18-23oC (from 14-18oC for the Hoang Lien Son area).
Average temperature of the hot months is from 26-28oC. Highest temperature ranges from 38-
41oC. Average temperature of the cold months is from 12-16oC. Lowest temperature ranges from
-2-2oC. There is snow and snow rain sometimes in this area.

Mean annual rainfall is from 1,400-2,000 mm. Rainy season is from May to September. Rainfall
mostly occurs in June, July and August. Dry season is in winter although there is a lot of
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drizzling rain at the end of winter.

Average humidity through out the year ranges from 82-85%.

Average wind speed is from 1-2.5 m/s. Highest wind speed rages from 30-40 m/s. Winds in
winter are from the East and North East. Winds in summer are from the East and South East.

Water resources are abundant and of good quality. There are many big river systems in this area,
including Red River, Thai Binh River, Ki Cung River, Bac Giang River, Cau River, etc. There
are also many small rivers along the coast in Quang Ninh province. This presents good
conditions for water supply for domestic use and production activities. There are considerable
ground water resources in some areas. However, water shortage is an issue in mountainous and
coastal areas.

d. The North Centre and South Central Coast

The North Centre has elevations of generally less than 100 m above sea level and the following
weather features:

Winter is rather cold with little sunshine, and occasional drizzling rain and frost in some places.
Dry and hot winds from the West are experienced in summer with high temperature and a lot of
rain in the second half of the year. Rainy season does not overlap with hot season.

Average hours of sunshine range from 1,500-2,000 per year.

Average annual temperature is from 23-25oC. Average temperature of the hot months is from
285-30oC. Highest temperature ranges from 40-42oC, reaching 42,7oC in some places. Average
temperature of cold months is from 16.5-19.5oC. Lowest temperature ranges from 3-8oC, down to
-0.2oC in some places.

Mean annual rainfall is from 1,400-2,000 mm. Rainy season is from August to December.
Rainfall mostly occurs in August, September and October. Droughts mostly occur in the middle
of summer when dry and hot winds come from the West.

Average humidity through out the year ranges from 84-86%.

In winter, winds come from the North (North West, North, and North East) and in summer, winds
come from the South (South East, South, and South West). Average wind speed is from 1.5-3 m/s.
The highest wind speed ranges from 30-40 m/s.

Water resources: Total volume of surface water is around 154,300,000 m3 per year (18.39
m3/year/person). However, rainfall is unevenly distributed through out the year, causing flash
flood and draughts.

The South Central Coast has elevations of generally less than 100 m above the sea and the
following weather features:

Winter is not cold with a lot of sunshine and dry and hot winds from the West. Rainy season
starts in the end of summer and ends in the beginning of winter. The most southern part of the
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area has very little rain and a lot of sunshine.

Average annual temperature is from 25-27oC. Average temperature of the hot months is from
28.5-30oC. Highest temperature ranges from 4042oC (from 6-9 months of the year average
temperature is above 25oC). Average temperature of the cold months is from 20-24oC.
Lowest temperature ranges from 8-13oC.

Mean annual rainfall is from 1,200-2,000 mm in the Northern part and from 1200-1600 mm in
the Southern part. Droughts occur from the end of winter to the middle of summer.

Average humidity through out the year ranges from 80-84%.

In winter, winds come from the North (North West, North and North East) and in summer, winds
come from the South (South West, South and South East). Wind speed averages from 1.5-3.5 m/s.
The highest wind speed ranges from 30-40 m/s.

The coastal area from Hai Van Pass to Khanh Hoa province is quite narrow with the land sloping
West-East. Rivers and streams in this area are often short and steep. Forests in the area are
heavily damaged. This area suffers from hash weather conditions and disasters at increasing level.

e. The Central Highlands

There are two distinctive seasons in this area: rainy season from May until the end of October and
dry season from November to April. March and April are the two hottest and driest months in the
year.

In most plains of 400-500 m above sea level, the weather is often cool with a lot of rain. In higher
plains (more than 1,000 m above sea level) such as Da Lat, the weather is cool all year round –
similar to temperate weather.

Average temperature is rather low. Temperature comes down below 20oC in the middle of winter
(December and January) then increases rapidly and peaks during transitional time between winter
and summer (April and May). There is a lot of rain in summer and very little rain in winter.
Serious droughts can be experienced in the hot months the end of winter and beginning of
summer. There is a distinctive difference between the rainy and dry seasons in the Central
Highland and in the South.

Average hours of sunshine range from 2,000-2,500 hours per year.

Average annual temperature is from 24-28oC. Highest temperature ranges from 37-40oC.

Mean annual rainfall is from 1,400-2,000 mm. Rainy season is from May to October. Rainfall
mostly occurs in July, August and September. Droughts often occur in the second half of winter
until the beginning of summer.

Average humidity throughout the year ranges from 78-84%.

In winter, winds come from the North and North East, and in summer, winds come from the West
and South West. Average wind speed is from 1.5-3.5 m/s. The highest wind speed ranges from
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20-35 m/s.

There are four main river systems in the area. Surface water resources are abundant. However,
rainfall is unevenly distributed in time, causing flood, serious droughts and water shortage.

f. The South East

This area has a lot of sun, and high temperature throughout the year. Rainy season is in summer.
Dry season is from the middle of winter to the beginning of summer. There is a distinctive
difference between the two seasons.

Average hours of sunshine range from 2,400-3,000 hours per year.

Average annual temperature is from 26.5-27.5oC. Average temperature of the hot months is from
28-29oC. Highest temperature ranges from 38-40oC. Average temperature of the cold months is
from 24-26oC. Lowest temperature ranges from 14-18oC.

Mean annual rainfall is from 1,600-2,000 mm. Rainy season is from May to October. Rainfall
mostly occurs in August, September and October. Average rainfall is more than 200 mm/month
during the rainy season. Average rainfall is less than 50 mm/month in the dry season. Droughts
often occur in the end of winter and spring.

Average humidity throughout the year ranges from 78-84%.

In winter, winds come from the North and North East, and in summer, winds come from the South
and South East. Average wind speed is from 1.5-3.5 m/s. The highest wind speed ranges from 20-
35 m/s.

The two big rivers in the area are the Dong Nai River and the Sai Gon River. These two rivers
bring 37-40 billion m3 of water to the sea every year. The lowest water flow of these two rivers is
at about 55-56 m3/s. After the Tri An hydropower plant was built, river flows were improved to
180 m3/s. After the construction of a series of hydropower plants in Dong Nai River, river flows
were improved to 250-260 m3/s, equaling 22 million m3/day.

Groundwater resources in the South East are quite diverse but unevenly distributed. Groundwater
extraction in the Southern Economic Focal Region are only gives around 500,000 m3/day, which
is barely enough for water supply in some places, especially in dry season. This is the biggest
economic area in the country. Therefore, power demand in this area is very big. Power
development in this area focuses on gas-fired and oil-fired thermal power.

g. The Mekong Delta

This area has high and stable temperature. Average temperature is at 28oC.

Average hours of sunshine range from 2,226-2,709 hours per year.

Rainfall mostly occurs in summer. Dry season is mostly in the middle and last months of winter.
Mean annual rainfall is from 1,600-2,000 mm. Largest volume of rainfall in a day is around 150-
350 mm. Rain season is from May to October. Rainfall mostly occurs in August, September 81 and
October. During the four to six months of rainy season, average rainfall is more than 200 mm
per month. During dry season, average rainfall is less than 50 mm per month.

Average wind speed is from 1.5-3.5 m/s. The highest wind speed ranges from 20-35 m/s. In
winter, winds come from North East, North and South East. In summer, winds come from South
West and South. In general, the Southern region has the same level of wind power as the Central
Highlands, which is higher than the Northern region.

Average humidity throughout the year ranges from 78-84%.

Water resources are abundant, thanks to the Mekong River. There is an intensive network of
canals in this area.

h. Abnormal weather phenomena

Abnormal weather phenomena include El Nino, La Nina, snow, hail, frost, tornado, flood, etc.
These are common phenomena that are hard to predict and prevent. These phenomena are often
changing in terms of intensity and frequency. They often cause heavy consequences. They can be
referred to as disasters.

In the recent years, Vietnam has suffered from serious impacts of disasters and negative weather
conditions. Vietnam lies in the tropical monsoon region, which means it is directly affected by
Asia Pacific monsoon regime - one of the five biggest monsoon regimes in the world. As one of
the ten countries in the world that are subject to the highest frequency of disaster, Vietnam
often suffer many types of disaster ranging from storm, typhoon, flash flood, landslide, and
drought, etc. The most frequent and serious disasters are typhoon, tropical depression, flood and
inundation.

According to statistics, in the last 50 years (1956 - 2008), Vietnam suffered from 390 typhoons
and tropical depressions. From 80-90% of the Vietnam’s population is affected by typhoon. On
top of that, flood and inundation in cities often cause serious traffic jams, affecting people’s life
and economic activities. Landslides also frequently happen in rivers, streams, mountains, etc.,
causing death and severe loss of assets and houses, as well destroying the environment. Droughts
have also occurred in the recent years in many parts of the country, resulting in heavy
consequences. Severe droughts in some years reduced crop yields by 20-30 %. Between 1996 and
2008, disasters of different types resulted in a total number of 9,600 deaths and missing persons.
Total loss of assets was estimated at 1.5% GDP per annum. Disasters in Vietnam are increasing
in quantity, scale and frequency and becoming more and more unpredictable.
(Asia Pacific Forum on Disaster Mitigation and Climate Change Adaptation, Hanoi, 2009)

Natural disaster is a threat to the sustainable socio-economic development as it increases poverty.

In addition to climate change, the situation of disasters is expected to worsen with increased
frequency and intensity of typhoon, rain, landslide, inundation and spreading diseases.

At the moment, there has not been a thorough study to confirm that these negative weather
conditions are the results of human doings. However, by looking at the nature of these conditions
it is easy to see that flood often occurs in areas with mountains, valleys and intertwined rivers and
streams. When the heavy rains come in wet season, water accumulates quickly on the ground and
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flows to rivers and streams, causing flood in the area. Floodwater comes from the rain (or snow),
which means that floods often occur in rainy season. Flash flood is most dangerous. The level of
impacts of flood often depends on the level of vegetation in the area. In the last 10 years, forest
area in Vietnam has decreased dramatically, which contributes to the increased frequency and
intensity of flood and inundation, especially flash flood in the northern provinces, the Central
Region and the Central Highlands. These are areas where many hydropower projects have been
built, which resulted in a strong decrease in forest coverage.

Droughts occur when there is a lack of rain for a prolonged period. In the incidence of a drought,
the humidity in the air and the level of water stored in soil both decrease, water flows in rivers and
streams are reduced, and the level of water in ponds, lakes, and in underground aquifers go down
low. This results in negative impacts on crop growth and on the environment. It also contributes to
the spreading of poverty and illnesses.

There are two main causes of droughts:

Natural cause: Unusual weather conditions resulting in reduced rainfall. This might be
temporary or prolonged lack of rain. This situation often occurs in arid or semi-arid areas. It can
be either an unusually prolonged period when the rainfall is much lower compared with the
average rainfall in similar period of many years, or a period of slightly lower rainfall following a
period of not enough rain for production and for the surrounding environment.

Human-induced cause: Deforestation results in reduced groundwater level that leads to depletion
of water resources. Inappropriate agricultural practices, such as growing water intensive crops in
areas experiencing water shortages, also leads to depletion of water resources. Wrongdoings in
water supply planning, such as building a small water supply facility in an area with high water
demand or a big facility in an area short of natural water sources, also have negative impacts.
Unfortunately it is not uncommon that development plans for socio-economic development are
not taking into account the availability of water resources. The risk of drought is increasing as
the result of water resource mismanagement.

In Vietnam, droughts occur in many areas at various levels of intensity and in different times,
causing serious impacts on the socio-economic development and affecting both the water
resources and agricultural production. Within the last 40 years, there have been many serious
droughts. In the North, big droughts occurred during the winter - spring crop in 1959,1961, 1970,
1984, 1986, 1989, 1993, and 1998 and during the summer crop in 1960, 1961, 1963, and 1964.
In the Central Region and the South, droughts occurred in 1983, 1987,1988, 1990, 1992, 1993,
2003, and 2004, and most seriously in 1993 and 1998.

The 1993 drought severely affected agricultural production in provinces from Thanh Hoa to Binh
Thuan when nearly half of the summer – autumn crop area was affected, of which 24,093 ha died
out.

Annual rainfall in 1998 was at only 30-70% of average rainfall of many years. The Central
Highlands, Central Region, South East, and Mekong Delta barely had any rain. The temperature
through out 1998 was from 1-3oC higher than average temperature of many years. Water level
in all big rivers was from 0.5-1.5 m lower than average river water level of many years. Small
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streams in the Central Region, Central Highlands, and South East had very little flow or no flow.
Some of the medium lakes and all small lakes dried out (579 lakes in Nghe An, 110 lakes in
Quang Binh, 85 lakes in Quang Tri, etc.). Water level in some big and medium lakes almost
touched dead level. In the Central Region and the Southern Region, salt intrusion affected as far
as 15-20 km inland. Many fresh water sources were also contaminated with salt water, which
affected water supply for irrigation and domestic use. This drought had serious impacts on
agricultural production in the whole country: 750,000 ha of crops were affected, of which
120,000 ha were completely lost; 236,000 ha of industrial and fruit tree plantation were affected,
of which nearly 51,000 ha were completely lost. About 3.1 million people had limited access
to water. Total loss of this drought was estimated at around 5,000 billion VND. There were
other losses that could not be calculated such as long-term impacts on the economy and the
environment (erosion, desertification), lack of food, malnutrition, impacts on physical and
psychological health of millions of affected people.

In 2001, the provinces of Phu Yen, Quang Nam, Quang Binh, and Quang Tri were severely
affected by droughts. Droughts in Phu Yen province affected 7,200 ha of sugar cane plantation,
500 ha of cassava plantation, 225 ha of wet-rice field, and 300 ha of dry rice field.
Only in the first 6 months of 2002, droughts in the South Central Coast, Central Highlands and
South East caused damages to crops, and forest fires in large scale, including fires in the upper
and lower U Minh natural forest.

In 2003, droughts in the Central Highlands affected 300 ha of rice field in Kon Tum, 3,000 ha of
rice field in Gia Lai, and 50,000 ha of cultivated land in Dak Lak. 100,000 families had limited
access to water. The estimated cost of the drought impacts in Dak Lak only was around 250
billion VND.

During the period of 2004-2005, in the Northern Region, water level of the Red River in Hanoi
went down to 1.72 m, which is the lowest level between 1963 and 2005. In the Central Region
and Central Highlands, the weather was hot and sunny for a long period, resulting in low flows
in rivers and streams in the area. Some streams completely dried out. Many reservoirs and
dams were operating at maximum capacity for water supply. Ninh Thuan was most affected in
20 years. Most rivers, streams, ponds and lakes in the province dried out. Water level in Tan
Giang lake went down below dead level with only 500,000 m3 of water. Da Nhim reservoir, the
main source of water supply for Ninh Thuan province, had one third of the water volume of same
time the year before. There were 47,220 people without access to adequate water supply. In Binh
Thuan province, most rivers dried out or had very little flow. Water level in most lakes in the
province was lower than dead level, ranging from 1.7 to 2.2 m. The remaining amount of water
in reservoirs was not enough to supply water for domestic use and cattle raising. Droughts and
water shortage resulted in inadequate domestic water supply for 50,000 people, impoverishment
of 16,790 households, food shortage for about 123,800 cows and drinking water shortage for
more than 89,000 cows, goats and lambs.

In 2008, impact value of droughts and salt intrusion in the Mekong Delta was estimated at 720
billion VND. Salt intrusion in Tien River, Hang Luong River, Co Chien River and Hau River was
from 60-80 km inland. Salt intrusion hit the record of 120-140 km in Van Co River. Surface water
from rivers, canals, ponds and lakes, etc. and groundwater are the main sources of water supply
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for domestic use and production activities. When a drought occurs, both surface water and
groundwater are reduced, affecting water supply for domestic use and agricultural production. In
the 2008 drought in Binh Dinh province, 18,840 ha of rice field were affected or at risk of being
affected, of which 2,500 ha were severely affected. The drought also affected water supply for
11,850 households, mostly in Phu Cat and Phu My district. These two districts received support
from the neighboring districts to get daily access to water. The local governments had to use
trucks to transport water from the town centre to the villages.

Most recently, in 2010, a long period of hot and sunny weather boosted power demand to a high
level. Power production was extended to an average of 260-265 million kWh per day, with top
power generation days reaching 277 million kWh per day, or even higher. The lack of rain during
this period also forced reservoirs in the Northern Region to discharge 3 billion m3 to supply for
the winter-spring crop. This resulted in the lowest water level in reservoirs in the Northern
Region in the last 100 years. There was not enough water for hydropower plants to operate at
their capacity. Prolonged droughts were affecting many parts of the country.

The upstream area of Red River in Lao Cai province was also experiencing droughts.

The lower river basin of Thu Bon River in Quang Nam province suffered from salt intrusion,
which posed threat of water shortage for irrigation for more than 600 ha of winter – spring crop in
Duy Xuyen district. Serious water shortage also affected water supply for domestic use and
production in Da Nang City.

The Central Highlands and Southern Region suffered from the most severe drought in many
years. Forest fire was detected at level V (extremely dangerous) in many forest areas including
national parks such as Tri Ton, Tinh Bien (An Giang province), all of Ca Mau province, Chu Pah,
Duc Co, Chu Prong, Chu Se and Mang Yang (Gia Lai province), Phu Quoc (Kien Giang
province), etc. The Central Highlands experienced extreme drought in large scale. Water level in
rivers, streams, ponds and lakes went down to the lowest level, resulting in water shortage for
thousands of households in the affected area. In big rivers in the Central Highlands, such as Ba
River and Se San River, water level was from 0.5-1.5 m lower than water level in the same time
the previous year. This is the result of reduced forest area and reservoir filling for hydropower
generation.

The Dong Nai River in the South, which is the main water supply source for nearly 17 million
people and 12 provinces and cities in the Southern key economic area, also experienced low
water level. River water level was reduced by 20 cm and salt intrusion occurred 2 months earlier
than in the previous years. This was a big concern of managers of domestic water supply
facilities.

Prolonged heat also put mangrove forests in An Giang, Kien Giang and Ca Mau at high risk of
fire. Most notably, in the lower U Minh forest area (Ca Mau), around 36,000 ha of mangrove
forest and 700 ha of forest in Khoai and Chuoi islands were at risk level 4 and 5 (extremely
dangerous levels). On top of that, under the pressure of droughts, 6,000 local households around
mangrove forests have to access the forest for food and income, which increases the chance of
forest fire.

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According to the Bureau of Statistics, in the first 2 months of 2010, the area of forest destroyed as
the result of fire and illegal loggings was 1,210.8 ha, which was 2.6 times higher than the same
time in the previous year. The forest area destroyed by fire was 1,029.4 ha, which was 7.2
times higher than the same time in the previous year. The forest area destroyed by illegal
loggings was 181.4 ha, which was 42% less than the same time in the previous year.

There have been some opinions about the fact that hydropower development at upstream river
affects the ecosystem of river basin area. For example, the Central Highlands used to have 4
layers of vegetation. Now there is only 1 layer. Forest area is being reduced dramatically. An
obvious consequence is reduced water storing capacity in soil, and stronger water flows that
damage river edges. Water from upstream flows to downstream and through canal systems to the
sea faster, causing flood, including flash flood, and deep inundation in lower river basin. Flood
season is often followed by severe droughts in dry season when water level goes down low.
There is no doubt that hydropower development has significant impacts on rivers. However,
water resource mismanagement of local governments is also a contributing factor and is an issue
that requires more attention.

In conclusion, negative weather conditions have significant impacts on the natural environment,
social, economic and political environment, and human health. Negative weather conditions also
contribute to the spreading of poverty, illnesses and conflicts over shared water sources. Serious
impacts include damages to the fauna and flora, threats to desolate animals, decrease in air and
water quality, forest fire, and land erosion. These impacts might be prolonged and irreversible.
Changes in the weather can have direct impacts on human such as loss of life and asset in flood,
and impacts on the economy such as loss of crop or reduced productivity in food production as
the result of water shortage, unusual cold weather and frost. This in turn increases production
cost in agriculture and reduces profit for farmers. It also increases food price. The total value of
husbandry is reduced. Hydropower plants encounter many challenges during operation phase.

2.1.3. Oceanographic Conditions

Vietnam has a large territory in the South China Sea (referred to as the East Sea in Vietnam),
including the continental shelf, territorial waters and exclusive economic zones with many small
and large islands. The total area of the South China Sea that belongs to Vietnam is nearly 1 million
km2.

The South China Sea is the second largest sea in the Pacific Ocean and the third largest sea in the
world, with total area of 3,447 million km2 and total volume of 3,928 million m3, and two large
bays, which is the Gulf of Tonkin (150,000 km2) and the Gulf of Thailand (462,000 km2). The
oceanological conditions of the South China Sea influence the oceanological system of Vietnam.
The East Sea of Vietnam has two important features: it is a protected sea and it is governed by the
winter and summer monsoons.

Sea water temperature: average annual temperature of the surface layer is more than 23oC and
varies according to season, region and depth. In the shallow bays and the Gulf of Tonkin,
temperature of the bottom layer is only 1-2oC lower than the surface layer. Further out in the deep
ocean, the temperature gaps between layers are bigger, especially at the depth of from 100-400 m.
86
Salinity: average salinity is from 32-33‰, and varies according to season, region and depth.
Further from shore, salinity is high and stable. Near the coast, salinity is influenced by the
presence of fresh water inputs from rivers. There is a clear difference in salinity in different
seasons and in three parts of the country from North to South.

Salinity is higher in dry season and lower in rainy season. When there is a large volume of fresh
water inputs from rivers, salinity level at the river mouth can reduce to less than 24‰ and the
water becomes brackish water.

Wave: Waves in the East Sea are generally not big, and are influenced by seasonal winds and
other coastal features. There are more waves and stronger waves when the winds come from the
North East. There are less waves and smaller waves when the winds come from the South West.
Whenever there is a storm, the waves become much bigger, especially in the Central Region. In a
storm, if the winds get to a speed of 200 km/h there might be waves of up to 12 m. At the same
time, on the coasts of the Philippines or in protected bays, waves are much less and smaller.

The Central Coast has much more and stronger waves, especially in Con Co and Phu Quy where
the average height of waves is at level IV. The Gulf of Thailand experiences much less and much
smaller waves, usually at level I or II. The Gulf of Tonkin is protected buy the Hainan Island.
Therefore, there are less waves and smaller waves compared with the Central Coast. Average
height of waves in the Gulf of Tonkin is level II or III. In winter when the winds come from the
North or in case of storms there can be big waves. For examples waves can get up to 6.1 m in Co
to, up to 7 m in Bach Long Vi and up to 11 m in Hoang Sa and Truong Sa (Spatlys Islands).

Tide: The tidal regime on the coast of Vietnam is very special. There are distinctive regional
differences in tidal regimes from Mong Cai to Ha Tien. In general, regular and irregular diurnal
tidal regimes dominate the coast of Vietnam. Some areas have typical diurnal tidal regime, with
a tidal range of over 20 m (i.e. Hon Dau).

Hoang Sa diurnal waves are the strongest on the coasts in the Northern Region. From there they
start becoming weaker until Hue, where they start picking up again on the coasts on the Southern
Region. Semi-diurnal waves are the strongest on the coasts in the Southern Region, then
becoming weaker northwards and towards the Gulf of Thailand. There are six different tidal
regimes in six sections of the coast of Vietnam as follows:

- A tidal regime from Mong Cai to Thanh Hoa

- Tidal regime from Nghe An to Quang Binh

- Tidal regime from Quang Tri to Da Nang

- Tidal regime from Da Nang to Ba Khiem

- Tidal regime from Ba Kiem to Ca Mau

- Tidal regime from Ca Mau to Ha Tien

Hydrology: The East Sea is a protected sea like the Mediterranean Sea. There are local currents,
which are influenced by the monsoons and the coastal landscape. Currents coming down from the
North or in from the Pacific Ocean only make these local currents stronger. Currents in the
87
East
Sea change according to seasonal and regional changes and are much dependent on the time and
zone of influence of seasonal winds.

In winter, the North East winds create a current running North East – South West along the coast
of Vietnam. This is a cold current, partly because of the impact of the extreme tropical air mass
and partly because of the influence of the cold current coming from the North through the Taiwan
Strait. The average current speeds in winter are from 60-70 cm/s (more than 1 nautical
mile/hour). In the middle of winter (December to February), the North East winds are strong and
constant, resulting in faster speeds of the North East – South West currents of up to 2-3 nautical
miles/hour.

In summer, the South West winds create a current running in the reversed direction from South
West to North East. This current runs along the Central Coast, veering East as it goes
Northwards.

Tsunami:

According to research results and simulation studies of the national Institute of

Hydrometeorology, there is a chance of Tsunami in the East Sea, on the coast of Vietnam and in
the Vietnamese islands in case of an Mw= 9,0 earthquake in the submerged suction Manila.

If an earthquake occurs in the submerged suction Manila, except for the western part of the
Vietnamese coast in the Gulf of Thailand, the rest of the coast from Mong Cai to Ca Mau will
experience Tsunami of more than 1 m high. The coast from Nam Dinh to Vung Tau is subject to
Tsunami of more than 2 m high. The coast in Quang Ngai province is subject to Tsunami of more
than 10 m high.

It takes about 2 hours for a Tsunami to travel from the submerged suction Manila to the central
coast of Vietnam. It takes much less time for a Tsunami to reach the islands: about 40 minutes to
get to the Paracels Islands and about 1 hour to get to the Spratlys Islands. It’s likely to take about
1 hour 40 minutes for a Tsunami from the submerged suction Manila to have the first hit on the
Central coast in Phu Yen.

There is a chance that Vietnam might be subject to Tsunami. More studies are needed to fully
evaluate the possibility and effects of Tsunami on specific areas.

2.2. The Past Environmental and Socio-economic Development Trends and

the PDP VII Baseline Situation
Information in this section is based on the National Environmental Impact Assessment reports
from 2006 to 2009 and the Environmental Impact Assessment reports of the power sector reports
in 2007 and 2008. The analyses of past environmental and socio-economic development trends
and pre-PDP VII baseline situation take into account all economic sectors, including the power
sector with information from the PDP VI. Assessment of environmental elements and
development trends of key environmental issues is presented below.

2.2.1. Current Situation and Development Trends of Natural Conditions

Development trends of natural conditions are much dependent on socio-economic development
activities and people’s awareness. Inappropriate water exploitation and uncontrolled wastewater
88
discharge will have impacts on water resources, living conditions, health and business activities
of local residents and people living in lower river basin area. Irrational exploitation will exhaust
natural resources and lead to other environmental, social and economic impacts. Loss of forest
will result in undesirable impacts such as soil quality deterioration, desertification, reduction and
loss of biodiversity value, etc. Limestone exploitation for cement production in limestone
mountain areas and minerals extraction, especially bauxite exploitation in the Central Highlands
where there is high forest coverage, are examples of irrational natural resources exploitation.

Changes to the environment are inevitable results of economic development in all countries in the
world. Pressure of population growth only worsens the situation. However, if mitigation measures
are properly implemented, there might be less negative impacts and some changes to the
environment can even be positive as experiences show in some developed countries.

The natural environment of Viet Nam has experienced a number of human-induced changes in
recent decades that have, in many cases, led to a deterioration of environmental quality. This has
affected all aspects of the environment: the atmosphere, land resources, water resources and
biotic resources including biodiversity. Whilst Viet Nam is in many ways still rich in
environmental resources, the trends are such that there must be serious concerns about the future
integrity of the environment in many parts of the country unless sustained efforts are made to
reverse current trends and protect the natural resource base. The deterioration of the environment
in much of the country is in many ways a reflection of the rapid and sustained economic growth
and development that Viet Nam has experienced in the last two decades. Economic growth has
been between 5% and 10% per annum throughout this period, with much of the growth coming
from sustained industrial development so that more than 40% of GDP now comes from industrial
output. Personal incomes have also steadily increased, meaning a rapid growth in consumer
demand for timber products and reliable services such as tourism, housing, resort, etc. These
trends underlie the sustained increase in demand for electricity of around 15% per annum, which
means increased pressure on power generation and power grid development. This in turn
increases fuel consumption, gaseous emissions, land acquisition, loss of forest, and impacts on
the ecosystems.

2.2.2. Environmental Impacts

2.2.2.1. Loss of Forest and Biodiversity

Current forest cover: According to statistics collected from local authorities, as of 2008, there are
more than 12.9 million ha of forest in Vietnam, including 10.3 million ha of natural forest and 2.6
million ha of planted forest. Forest cover in Vietnam is currently at 38.7%. From 1991 to the
present time (after the Law on Forest Protection and Development was issued), forest protection
activities have resulted in some improvement as the Law being implemented. Some forest areas
have been recovered. Vietnam became the only country in the region with increasing forest
cover.

Forest area has been increasing in the last few years thanks to regeneration and forestation efforts.
Statistics show that in the 5 years between 2002 and 2007, forest cover increases by 0.5 % per
annum on the average. This is a positive result of Vietnam’s efforts in forest management,
protection and development.
89
/3+&$%F#$'ѫ&$?)Ӌ&$,B%'$-ӯ&($Oӏ$()ҧ5$ÿ)C$D'ӕ&($6@$4Ӆ$?)Ӌ&$,B%'$-ӯ&($,-@&$ÿ:;$%'#$,'ҩ;A$ÿӝ$%'E$<'ӫ$
-ӯ&($,#=&$I3ӕ%$8$&ă5$I3F$LGHHG$Y$GHHTN$,ă&($OZ&'$I3:&$(ҫ&$HA89$5ӛ)$&ă5A$6Ӄ,$I3ҧ$&=;$/=$%ӕ$
(ҳ&($-ҩ,$/ӟ&$,-#&($%+&($,"%$I3ҧ&$/[$Oҧ#$4ӋA$<'",$,-)Ӈ&$-ӯ&($%ӫF$0)Ӌ,$1F5C$
Although national forest cover has been increasing in the last few years, deforestation is still an
*һ%$?\$,ә&($?)Ӌ&$,B%'$-ӯ&($,#=&$I3ӕ%$,ă&($,-#&($&'ӳ&($&ă5$I3FA$&'ѭ&($?)Ӌ&$,B%'$-ӯ&($Oӏ$5ҩ,$
issue.
%]&$ ӣ$ 5ӭ%$ According
%F#C$ to ,ӯ$
D'ӕ&($ 6@$ statistics fromÿӃ&$
&ă5$ 7KK7$ 1991,'"&($
to October 2008,
7H^GHH2A$ a total
,ә&($ ?)Ӌ&$area
,B%'$of-ӯ&($
399,118 ha was
Oӏ$ 5ҩ,$ /=$ lost, on
the average of 57,019 ha/year. In 2009, a total area of 3,221 ha was lost to fire and loggings,
QKKC772'FA$OZ&'$I3:&$8TCH7K'F^&ă5C$1ă5$GHHKA$,ә&($?)Ӌ&$,B%'$-ӯ&($Oӏ$%'";$4=$Oӏ$%'һ,$<'"$/=$
which is 18.8% less than in 2008, of which 1,658 ha were lost to fire (1.2% less than in 2008),
QGG7$'FA$()ҧ5$72A29$>#$4ӟ)$&ă5$GHH2A$,-#&($ÿJ$?)Ӌ&$,B%'$-ӯ&($Oӏ$%'";$7R82$'FA$()ҧ5$7AG9S$?)Ӌ&$
,B%'$ -ӯ&($and 1,563
Oӏ$ %'һ,$ ha 78RQ$
<'"$ were 'FA$
lost()ҧ5$
to loggings
QHAQ9C$(30.3%
1'ӳ&($less
ÿӏF$than I 2008).
<'ѭѫ&($ Loggings
%J$ ?)Ӌ&$ mostly
,B%'$ -ӯ&($ happened
Oӏ$ %'һ,$ <'"$ in Binh
Phuoc (489 ha), Lam Dong (488 ha), Dak Nong (284 ha), and Son La (227 ha).
&')Ӆ3$/=P$!Z&'$_'ѭӟ%$`2K$'FS$U:5$Ĉӗ&($`22$'FS$Ĉҳ6$1+&($G2`$'FS$aѫ&$UF$GGT$'FC$
!"
!'"%##"###$

!'"###"###$

!&"%##"###$

!&"###"###$

!!"%##"###$

!!"###"###$
&##& &##' &##( &##% &##) &##* &##+

$
Figure 2.1. Forest Area in Vietnam in the Period 2002-2008
!)#*$+,-,$."͍#$/"͇#$0"͏#$%12*$&ͳ#'$3"͏%$456$%ͳ$#ă6$+77+8+779$
(Source: National forest situation in the period 2002 – 2008, MARD, 2009)
:4';͛#($<=#'$/͙$*"͏#$%&̩#'$&ͳ#'$%>?#$@;͙2$2A2$#ă6$%ͳ$+77+$B$+779C$D͡$44EF4FC$
+77GH$
Impacts on ecosystems and key biodiversity areas are mainly due to loss of forest and forest
aӵ$5ҩ,$ÿ)$%"%$'Ӌ$>)&'$,'")$4=$,B&'$ÿF$?ҥ&($>)&'$'ӑ%$%'ӫ$;Ӄ3$/=$?#$>ӵ$5ҩ,$-ӯ&($4=$>3;$,'#")$-ӯ&($
deterioration, especially as the result of:
(:;$&@&A$ÿһ%$O)Ӌ,$/=$?#P$$
- Unsustainable exploitation of timber and non-timber products: legal and illegal logging is
one of the main causes of the reduction in forest cover. The government allows logging of
around 150,000 m3 of natural forest every year. However, according to the website of the
0)Ӌ&$1ă&($/ѭӧ&($ Forestry Department, this figure
$ is a lot higher at around 2 million m3 every
22$ year. The
consequence is the loss of big area of forest. In the recent historical flood, big wood logs
and tree roots were seen floating down a river covering a big section of this river as an
obvious evidence of this situation.

- Conversion of forest to industrial tree plantation and agricultural land: recently, thousands
of hectares of “poor” forest land were converted to coffee and rubber plantation for profit.
On top of that, many families, especially ethnic minority families, also started to grow
coffee and rubber plants instead of tending forests and continued with their shifting
cultivation practice, which caused loss of forest land and forest deterioration.

- Conversion of peat swamp forest to aqua-farming land: increasing area of mangrove

forest in Vietnam has been replaced with shrimp farms. To date, there are only 200,000 ha
of mangrove forest in the whole country. Economic gain is the main motivation: a family
can earn hundreds of million VND per year from one hectare of shrimp farming while
they only get paid 100,000 VND by the government for one hectare of forest they protect
in one year.

- Conflict of interests is one of the main reasons. According to the current Vietnamese
90
constitution, the State government owns all natural resources, including land resources.
Forests are managed by Forest Management Boards and State Forest Enterprises. The
people and communities only have access to poor forests or barren lands.

- Other reasons: forest areas are reduced for many other purposes such as hydropower
development, industrial park development, mineral extraction, civil projects, or due to
inappropriate planning and management, etc.

- Illegal wildlife hunting and trade. According to statistics, in 2002, the revenue of national
and international wildlife trade via Vietnam was up to 3,050 tonnes, equivalent to USD 66
millions3. Illegal exploitation of non-timber products.

- Invasive alien species.

- Increasing impacts of climate change on ecosystems and biodiversity.

Biodiversity value, reserves and quality are well maintained and preserved in special-use forests
with designated management units. However, the more common situation is that natural forests
are loosing their values. Primary forests and rich forests can only be seen within special-use or
protected forest areas. Of the 3,105,647 ha of natural forest only 652,645 ha (21%) are rich and
medium stocked forest, and 2,453,002 ha (79%) are poor and regenerated forest.

Table 2.1. Forest Land Area and Forest Cover

Land Area (ha)
Year Total Natural Plantation Forest Cover (%)
1998 9,432,900 8,099,858 1,333,042 28.80
1999 10,915,592 9,444,198 1,471,394 33.20
2000 11,314,626 9,675,700 1,638,926 34.40
2001 11,685,835 9,942,920 1,742,915 35.50
2002 11,784,589 9,865,020 1,919,569 35.80
2003 12,094,517 10,004,709 2,089,808 36.10
2004 12,306,805 10,088,288 2,218,517 36.70
2005 12,616,700 10,283,173 2,333,527 37.00
2006 12,873,850 10,410,141 2,463,709 38.00
2007 12,895,396 10,340,284 2,555,112 38.20
2008 13,118,773 10,348,591 2,770,182 38.70
2009 13,258,842 10,339,305 2,919,538 39.10
Source: SEA for Vietnam Forestry Master Plan 2010 - 2020

3
Nguyen Van Song, 2008, Wildlife trade and solutions for wildlife conservation in Vietnam. Environment and Construction
Magazine. Issue 17, volume 2, 2008. P 145-165. 91
Figure 2.2. Forest Cover Change in Vietnam in the Period 1983-2004
Source: SEA for Vietnam Forestry Master Plan 2010 - 2020

Vietnam is one of the world’s 10 most biologically diverse countries - containing about 10 % of the
world’s species, even while covering less than 1 % of the earth’s surface (World Bank, 20024).
Vietnam’s valuable biodiversity include tigers, elephants, and 5 of the most valuable and rare
primates in the world. Flora diversity can be seen in over 13,000 reported species. The unique
climate and geography of Vietnam have resulted in many ecological areas, ecosystems, habitats,
and high endemism. The forest ecosystem has the highest biological value in Vietnam in
comparison with other ecosystems such as those of grassland and limestone mountains (MoNRE,
20085).

Biodiversity in Vietnam is rather high. However, it is being threatened by industrial and domestic
pollution, construction activities, overfishing, and destructive fishing methods.

Aqua-habitat

The freshwaters of Vietnam are tropically rich in flora and fauna biodiversity including species of
fish, shrimp, crab, snail, mussels, amphibians, insects and plants. In different fresh water systems,
there are about totally 20 species of freshwater weeds; 1402 species of algae; 782 of invertebrates;
544 of fish species and 52 species of crabs6.

4
Vietnam Environment Monitor 2002, World Bank, Ha Noi
5
MoNRE, Vietnam Environment Bureau, 4th Country Report: Vietnam Implementing the Biodiversity Convention, Hanoi,
2008

6
Source: Vietnam Environment Monitor 2003, WB 92
pecies of
rtebrates;
M2D O7 M2+: <P.)2.+ 82+-123=-2*$ 2$ K2.-$&/
bution of
7.

or inland
oration of
ver, there
danger of
Red Book
birds, 24
d 1 insect

eshwater
Ca River
art of the
<*=1).> E%)% M%-2( '& (,BB2+2&) -'#+I2- I'D$,""2( M7 0,-*2+7 L2-2+%I*
southern Figure 2.3. Fish Species Distribution in Vietnam
J&-),)#)2 J= >??Q5
eshwater Saltwater and brackish water ecosystems are quite diverse, with distinctive features of the uplands.
National To date, around 5*611,000 phytoplankton
!7 8.)%2$. and marine
2$ 91.+:;&-.1 species have been identified, including 537
92+:.12.+
ges in the species of phytoplankton, 667 &$'species of seaweeds, 657 species of zooplankton, 600 species of
32*'24.1+2-,
benthic species, 225 species of shrimps, 2,038 fish species, and nearly 300 species of corals.
ruction of Decline
Apart from is seenthere
that, in various reservoirs
are also andoflakes
50 species in Vietnam.
sea snakes In thetoxic
and other Ba algae.
s loss of Be lake fish species have been disappearing at a rapid rate from 1998
('& )*+,--% Coastal andOver
to 2001. marine
thisecosystems
short period 20 species have disappeared, out of
which 15 are Cypranidae.
rivers in The very diverse ecosystems distribute along the coastline. More than 2,000 fish species are
Thisinisthe
found a continuation
sea waters of
of aVietnam,
steady decline over decades.
approximately The fish of which are economically
130 species
catches have gone down since the 1960s:
important. Additionally, there are more than 1,600 species of crustaceans and 2,500 species of
mollusks
?.12*' with an annual allowable catch?1*'=)-2*$
<*=1). of 50,000-60,000
@2.%' and 60,000-70,000 tonnes
waters of respectively. Approximately 45,000-50,000 tonnes of seaweed can be exploited. Many of these
A-B ACDE:
species are endangered.
nomically &E,1B
00 species Among these ecosystems,
1961-62 Nguyen Vanthe most
Hao important are 38
(1964) wetlands, 85.0
coral reefs, and sea grass. These
with an ecosystems
1962-67provide habitats,
Mai Dinh Yen,sprawning fields, and 20
Bui Lai (1969) food for many
45.0 species. These ecosystems not
only 1975
serve as the lungs Van
Nguyen for Hao
many(1975)
areas and act as15protective33.4
shields in case of typhoons and
00-70,000
floods. However, these ecosystems are declining rapidly
1993-97 Nguyen Van Hao 11
both in24.5
size and quality.
ach year
2000 Nguyen Trong Hiep (2001) 7 15.0

<*=1).> 0,-* 0%#&% ,& 1% 12 3%425 6/#72& 8+'&/

C,2)&%D5

2-'#+I2- 'B
N),",-%),'& 'B "#$% (& R!< !,)7 S'#)* T#" U= >??Q

93

!"
!"
Book (2002) ;%<(. =4 5%>$, /$%&'%( %)* +%,-). ./$&0&'.+&
wls living in
?/$&0&'.+& @-&',-<9'-$) ?&'-+%'.*
3 marine fish,
.A-&'-)2
marine crabs, %,.% BC%D
d 26 mollusk Agro-systems Concentrated in the Red and 5,500,000
Mekong River Delta
Aquaculture Entire coastline 10,000
Tidal wetlands Mainly concentrated in areas 1,000,000
of river mouths and around
the coastline
some islands
re wetlands, Lagoons 12 lagoons at the coast from 100,000
Thua Thien Hue to Binh
Thuan province
Sand beaches Broad extent along coast 600,000
Mangroves Estuaries, sheltered bays, 156,608
lands. These
primarily North and
Mekong River South coast
stline. The Sea grass North to south, inshore and 6,800
tland sites in offshore
International Coral reefs (in near shore and some offshore 7,532
6m depth)
ed such site
Islands about 2,779 inshore islands 1,630
huy National recorded
he Red River
8$9,/.&:Table 2.2. Main
E'$.$%"+)( coastalGH&
D'/9 F.&>)% andI/$?
marine
122J@ ecosystems
8$)+%"9 F"+$/%"# *)+5
re plans for #"%( G/%,)'0"+$/% "%( -"%".)9)%+ K+'"+).>? */'L,H/M !'/<))($%., "%( NOP
him National Wetlands
64A15;CQ !'/R)<+? ABBB@ N')" D$.&') D/' 9"%.'/0), $, M'/0$()( S> :=!=? ;)5
er Delta. Can M/'+ +/ +H) Q/8? ABB1@
Vietnam is rich in freshwater and marine wetlands. These are mainly distributed in the Red River
ted area was
and the Mekong River Deltas and along the 3,260 km coastline. The Directory of Asian Wetlands
by UNESCO
lists over 25 wetland sites in Vietnam that meet the criteria of ‘Wetlands of International
Importance’. Despite this the only designated such site under the Ramsar Convention is the Xuan
Thuy National Park - a 12,000 ha mangrove park.
1-2 34 5%)2,$6. ($&& -) 7-.')%+
nam has lost Mangroves
ge in shrimp
Over the last 50 years of development, Vietnam has lost more than 80% of mangrove forest. The
of mangrove
surge in shrimp farming emerges as one of the leading causes of mangrove forest destruction. The
area is largest
loss of mangrove forest area is largest in the Mekong (Cuu Long) Delta, Quang Ninh and Hai
nd Hai Phong
Phong provinces. Other causes for mangrove losses include conversion to agricultural and
sses include
construction lands, war destruction, fuel wood collection.
n lands, war

Quang Ninh
close to forty
Only 15,700
stimated that
angrove func- 8$9,/.: 12345122678$)+%"9 :/'),+ ;),/&'<), =%0)%+/'> "%( -/%$+/'$%. !'/5
.'"9? :=!=@ ABB1?1222 "%( ABB17 C,+$9"+)( ("+" D'/9 0"'$/&, ,/&'<),@
be in the rage 94
1-2 34 5%)2,$6. ($&& -) 7-.')%+
am has lost
in shrimp
f mangrove
ea is largest

06E01F# GFH+F:I8<F1J >

d Hai Phong
es include
lands, war
K)&9LM$%&) $.D N$)-.&
Quang Ninh
ose to forty
nly 15,700
alls that
imated 1$23& 4$5 67$3-%* (, #()$3 8&&,9 -. :-&%.$;
17
ess-
grove func- Figure 2.4. Mangrove
8$9,/.: 12345122678$)+%"9 Loss in=%0)%+/'>
:/'),+ ;),/&'<), Vietnam"%( -/%$+/'$%. !'/5
eiet-
in the rage Coral Reefs
.'"9? :=!=@ ABB1?1222 "%( ABB17 C,+$9"+)( ("+" D'/9 0"'$/&, ,/&'<),@
#$%&'()* +&,-.-%-(. / 0)&$
eefs Excellent of coral>75%
The coverage reef inlive coral Vietnam 1.4
northern generally falls between 25 and 50%. Based on the
IUCN Good 50-75%coral
criteria for assessing live reefs,
coral only 1.431.0
% of the reefs studied in southern Vietnam are in
and
or 1999 and excellentFair condition. The 25-50% live of
number coral 48.6
poor reefs occupied 37.3% and the reefs considered to be in
able
(Fig 8). fair and
Poorgood condition occupied
<25% 48.6% and 31%
live coral respectively (Table 6). The total area of coastal
37.3
. In "#$% !& */'#( P"%L? T1222U? V WH) 8
X&"%. F$%H "%( I"$ !H/%. G/",+"# ;)5
coral reefs is about 40,000 ha2O)0)#/M9)%+?Y
. In general,K)9$%"'
coral /%
reefs are found
D/' G/95in three areas: in the west of
t of <(7)=&> .$/%7
,"#%- EM+$/%, D/' G/9M')H)%,$0)
&')".#/') 01)232.2'4 56654 EM+$/%,
7&''() $2 #3)8 31 *".29'$)2 :)3$;<
Tonkin Gulf,O)0)#/M9)%+
M')H)%,$0) in Central $%Vietnam
+H) X&"%. and in "%(
F$%H the I"$
eastern
!H/%.Siam Gulf.
G/",+"# The marine areas with the largest
;).$/%@
am coral reefs are in the Spratly and Paracel Archipelagos. The main threats to the reefs are
the destructive fishing methods, over-fishing, sedimentation, and pollution from territorial sources.
the
Table425
1$23& 2.3. Live
?-@& Coral
=()$3 Coverage
=(@&)$'& in Some
-. 9(;& Sites
9-%&9
ng,
ces. Location Live coral
and cover (%)
efs. Co To Archipelago 51.2
hile Ha Long Bay 34.2
Cat Ba Islands 47.7
50%
Long Chau Archipelago 42.1
Bach Long Vi Island 31.0
Son Duong-Mui Ron Islands 50.0
Con Co Island 23.8
s of Son Tra-Hai Van 50.5
vide
<(7)=&> =313)2#> "( ?3)9'#>@0A!B4 566C;
ug-
like
Con
in 7
Viet Nam Forest Resources Inventory and Monitoring Program, Institute of Forest Resources Inventory and Planning,
ded 2001
1$23& A5 1(B "C 3$)'&9% 9&$')$99 2&D9 -. :-&%.$;
8
Reefs at risk in South East Asia, World Resources Institute and Ministry of Fisheries 95
and
Name of location Area (ha) Number
of species
Bach Long Vi Island 31.0
Son Duong-Mui Ron Islands 50.0
Con Co Island 23.8
15 species of Sea grass: covers an areaVan
Son Tra-Hai 50.5species9 of sea grass have been identified.
of 6,800 ha in Vietnam. 15
eds provide The sea grass beds provide habitats of rare and endangered marine species such as dugong and
<(7)=&> =313)2#>"(?3)9'#>@0A!B4566C;
such as dug- sea turtles and support food for many species like fishes, shrimps, crabs and sea mammals. Phu
species like Quoc and Con Dao have the most diverse seagrass composition in Vietnam. Seagrass beds have
uoc and Con also been severely degraded from inappropriate fishing, aquaculture production, and pollution
from waste discharges.
position in
ly degraded Table 2.4. Top 10 Largest Sea Grass Beds in Vietnam
1$23&A51(B"C3$)'&9%9&$')$992&D9-.:-&%.$;
duction, and
Name of location Area (ha) Number
of species
Tam Giang – Cau Hai lagoon 1000 2
Thuy Trieu lagoon-Cam Ranh Bay 800 7
(Khanh Hoa province)
Phu Quoc island 500 9
Nha Mac marsh (Quang Ninh province) 500 1
Cua Gianh estuary (Quang Binh) 500 1
Thu Bon river mouth (Quang Nam) 500 1
Phu Quy island (Binh Thuan province) 300 6
Han river mouth (Da Nang) 300 1
Cu Mong marsh (Phu Yen province) 250 5
Con Dao archipelago 200 8

<(7)=&9> D$3E9"1+01)232.2'"(F/'$1"+#$G9>45665;
The biggest consequence of loss of forest and biodiversity is the loss of forest biological services
such as medicinal herbs, livelihoods (especially of ethnic minority people), water source
protection, soil protection (sedimentation, erosion, soil deterioration), environment for scientific
research, and tourism potential, etc. The consequences of loss of forest are the most heavy
considering that Vietnam is one of the most vulnerable countries to climate change.

The area of forest lost to hydropower reservoirs only accounts for a small proportion of the total
area of forest loss in Vietnam every year, which was recorded at 161.1 km2 according to survey
statistics collected in 2006 during the implementation of the PVP VI. However, hydropower
development provides entries for motorized vehicles, which will open forest areas up to further
encroachment and degradation.
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2.2.2.2. Changes to Hydrological Regimes, Water Resource Management and
Downstream Salt Intrusion
All natural water resources are distributed unevenly in time and space. Human’s demand for
water also varies in time and space. However, human’s demand for water and water availability
are often out of sync. Appropriate water regulation according to human’s demand through the use
of reservoirs is one of the most effective solutions for this issue.

Reservoirs stabilize flows by regulating water supply capacity from the natural flow. A reservoir
can change the flowing regimes of a river dramatically in time and space. Apart from that, the

9
Hai Phong Institute of Oceanography, 2002. 96
presence of a reservoir can change the potential and kinetic energy in portions of the river. This
feature is applied in hydropower development. The establishment of dams is considered an
effective method in water management, especially in flow, flood and drought control for
downstream area. Other benefits of reservoirs include irrigation for agricultural production,
domestic water supply, water transport, fish farming, climate regulation, tourism, water sport, and
recreation, etc.

There are many benefits of hydropower reservoirs that cannot be quantified in figures.
Experiences from the Lower Mekong Basin flood control projects by the Mekong River
Commission (1960 – 1981) and the Netherlands Delta Team (1974) show that if a dam is built in
Tongle Sap to check the volume of water going to the lake, the dam gate can be closed when
flood water starts to flow downstream to reduce flow load in the Mekong Delta. Water in the
Great Lake can be discharged gradually during the dry season for irrigation, water transport and
salt intrusion reduction. Modeling studies show that this dam can reduce flood water level in
Phnom Penh by 0.41 m, in Chau Doc by 0.2 m, and in Tan Chau by 0.19 m. However, if the dam
is built there will be considerable impacts on the environment and ecosystems. For example, the
studies have not fully assessed the risk of reduced fish stock in the Great Lake, potential impacts
on water transport between Phnom Penh and Tongle Sap and possible changes to the natural
habitats for fauna and flora in the region.

Vietnamese farmers have a saying: “Thượng điền tích nước, hạ điền khan”, which can literally be
translated as “if the fields upstream are storing water, the fields downstream will have no water”.
This saying is not true for any big river basin because in reality water in the river comes mostly
from the rain. Rainfall in upstream area contributes about 25% of the total water volume in a
river. Water volume in the river is dependent on: (1) river basin area; (2) landscape of the river
basin; (3) vegetation; (4) river basin slope; (5) geological and soil conditions; and (6) most
importantly, volume and duration of rain. Therefore, it is not true to say that cascade
hydropower always has negative impacts on lower river basin.

However, if the water resources are not well managed and large quantities of water are stored
upstream, it will have big impacts on the lower river basin. Big river dams can result in many
changes to the geology, topography, and soil. Water in the reservoir can absorb through layers of
soil, causing water loggings and increasing the level of water saturation in soil, which can affect
the earth’s crust in the region. There has been incidence of earthquake and landslide in some areas
after the construction of reservoirs. If geological surveys are not done properly, water in reservoir
can seep through and dissolve underground salt deposits, causing negative impacts on crops.

Changes to hydrological regimes can result in a new situation of downstream erosion and
sedimentation. These changes partly affect the stability of river edges and riverine ecosystems.
There were opinions about how water discharges from hydropower reservoirs contributed to the
recent historical floods in the Central Region.

According to statistics, the water level in most reservoirs in Vietnam has declined from 20-40%
compared with annual average water level in many years. In the reservoirs of Hoa Binh
hydropower station – the biggest hydropower station in South East Asia – water level has reached
the lowest point in 40 years. Dryness can also be witnessed along the Mekong River. In the dry
season of 2004, most rivers and streams in the areas from Vientian and Savanakhet to Champasak
97
dried out. It was even possible to walk on the dry river floors. The rice paddies in Thailand on the
right side of the Mekong River were all dry and almost all lost. All the remaining forests in
Central Highlands of Vietnam on the left side of the Mekong River were at high risk of fire.
Coastal provinces in the Mekong Delta such as Ben Tre, Tra Vinh, Soc Trang suffer from deep
salt water intrusion. This situation has led many countries, organizations and scientists to study
the effects of the dams on upstream Mekong River and the reservoirs in Van Nam, China.

Deterioration of water quality and river ecosystems is also an alarming issue. There is a need for
strict mechanisms for water resources management.

All the above are environmental impacts before the PDP VII.

2.2.2.3. Changes to Environmental Quality

a. Air Quality

Air quality in all of Vietnam is deteriorating, most obviously in big cities, some industrial parks,
and craft villages. More details are provided below:

Air quality in urban areas and industrial parks

Particulate Matter (PM): Most urban areas in Vietnam are polluted with PM. In some areas,
the situation is very serious, even at alarming levels. The concentration of PM in the air in big
cities such as Hanoi, Ho Chi Minh City, Hai Phong, and Da Nang is from 2-3 times higher
than the standard. PM concentration in the air at intersections can be 2-5 times higher than the
permitted level, and at construction sites can be 10-20 times higher10.

Developed mineral extraction and industrial activities in Thai Nguyen and Quang Ninh cause
atmospheric pollution in nearby urban areas. Trucks coming in and out of the sites often do not
follow environmental sanitation requirements such as cleaning their tires or covering up the
material content in the back of the truck, and often transport more than their load limit, causing
serious PM pollution on their tracks.

In areas with developed industrial activities and heavy load of traffic (such as Bien Hoa and Viet
Tri), PM concentration in the air around roads, industrial parks, and nearby residential areas is
beyond the permitted level. 100 % of the one hour averaging time PM samples in all monitoring
points are above the permitted level. In some intersections, the PM concentration in the air is
sometimes 5 times higher than the permitted level. The pollution situation in these areas is not
likely to improve, except for in some roads that have recently been upgraded.

10
Source: Vietnam Environment Report 2009: Industrial Park Environment, MoNRE 2009 98
Figure 2.5. PM Concentration in the Air around Some Industrial Parks in the North and Central
Vietnam 2006-2008. (Source: Vietnam Environment Report 2009: Industrial Park Environment)
SO2 releases: The average SO2 concentration in most urban areas and industrial parks is lower
than the permitted level. Industrial and craft activities contribute to 95% of the total SO2 releases,
traffic contributes to 1.2% and urban living activities contribute to less than 1%. SO2
concentration around some industrial parks in Viet Tri city and Bien Hoa city is higher than in
other areas but still under the permitted level specified in the Vietnamese Standards QCVN
05:2009/BTNMT.

Figure 2.6. SO2 Concentration in Gaseous Releases from Some Factories in the North
Thang Long Industrial Park and Tien Son Industrial Park (Bac Ninh) 2006-2008.
(Source: Vietnam Environment Report 2009: Industrial Park Environment)

Note: VAP Co.: gaseous releases from casting, foaming, painting, wielding

Toto Co.: gaseous releases from drying and calcining

Acecook Co.: gaseous releases from oil-fired boiler

Granit Viglacera Co.: gaseous releases from drying/heating (Coal gasification technology)

99
Figure 2.7. SO2 Concentration in the Air around Some Industrial Parks in
Northern Vietnam in 2006-2008
(Source: Vietnam Environment Report 2009: Industrial Park Environment)

NO2 releases

NO2 concentration in the air is higher around roads in urban areas, especially in highly populated
cities such as Hanoi and Ho Chi Minh. From13-85% of the monitoring samples collected from
2002 to June 2007 in these two cities showed higher NO2 concentration than the permitted level.
In other urban areas, NO2 concentration at the times of observation is within the limit of the
Vietnamese Standards QCVN 05:2009/BTNMT.

Figure 2.8. NO2 Concentration in the Air around Some Industrial Parks in the Central Vietnam
2997 (Source: Vietnam Environment Report 2009: Industrial Park Environment).

CO releases

CO concentration in the air in most cities is within limit of the Vietnamese Standards QCVN
05:2009/BTNMT. However, in areas with heavy traffic, CO concentration is obviously higher. In
100
Bien Hoa, 20% of the samples collected from traffic routes in 2006 showed CO concentration
higher than the permitted level11.

Noise pollution

Along with urbanization, noise pollution from traffic also increases. Noise level measured on
traffic routes in big cities such as Hanoi, Hai Phong, Da Nang and Ho Chi Minh City is higher
than the permitted level in the Vietnamese Standards TCVN 5949:1998. In most second grade
urban areas, noise level on traffic routes is around the permitted level in the Vietnamese
Standards TCVN 5949:1998, except for in Bien Hoa city.

The level of noise pollution in industrial parks, product processing zones, and craft production
areas is quite high, especially between 22:00 and 06:00.

The situation of atmospheric pollution in urban areas and big industrial parks is measured from
atmospheric pollutant emissions. The table below presents data about atmospheric pollutant
emissions from the Environment in Industrial Parks, Vietnam Environment Performance Report
2009 by MoNRE.

11
Source: Vietnam Environment Report 2009: Industrial Park Environment, MoNRE 101
Table 2.5. Concentrations of Atmospheric Pollutants in Industrial Parks in Four
Economic Focal Regions. (Source: Vietnam Environment Report 2009: Industrial Park
Environment)

A study of the areas with high load of pollutants shows that the Southern Economic Focal Region
is quite polluted with pollutant concentrations above the limited level in some places (highlighted
in figure 2.9).

Other studies and survey results show that areas of high concentration of thermal power plants
also have high concentration of pollutants, such as Quang Ninh, Hai Phong, Ba Ria Vung Tau,
Dong Nai, and Bien Hoa.

The Central Region, the Northern Mountainous Region, and the Central Highlands have the
lowest pollutant concentration. These regions are in the process of industrial development and
have no big industrial project in the present. According to the industrial development plan
102
described in Chapter 1, there are many industrial estates planned for these regions but not at the
intensity of the economic focal regions. Industrial activities for these areas will have a strong
focus on mineral extraction and processing, timber extraction and processing, and agricultural
production and processing, which potentially result in higher pollution load.

Figure 2.9. Southern Economic Focal Region: Communes with Highest Pollution Load and
Industrial Estates.

Air quality in rural area

Air quality in rural Vietnam is quite good, except for in some trade villages. Atmospheric
pollution in trade villages mostly comes from fuel combustion and chemical use in the production
process. Coal (mostly low quality coal) is the main fuel used in trade villages. Coal combustion
103
emits large quantities of PM and other gaseous pollutants. Therefore, there are high
concentrations of pollutants such as PM, CO2, SO2, NOx, and volatile organic compounds in the
air in trade villages.
Changes to the atmospheric quality are inevitable consequences of industrial development. It is
predicted that high atmospheric pollution will occur in developed economic areas and areas with
rapid growth rate and high concentration of industrial activities such as the South East, the Red
River Delta, and the Mekong Delta. It is recommended that future development plans consider
the pollution threshold for these areas.
Air quality in areas around power projects

According to the PDP VI, air pollutant emissions to the environment if not properly controlled
are projected to be quite high: 137,538 tonnes of PM, 330,238 tonnes of SO2, and 476,820 tonnes
of NOx.

Year
Air pollutant
2006 2010 2015 2025

PM 23,826 37,513 45,495 137,538

SO2 58,606 73,728 114,943 330,238
NOx 94,685 158,548 289,875 476,820
(Source: SEA of PDP VI, 2006)

These emissions are expected to be much lower in reality because advanced waste treatment
technologies will be applied. This is evident from the air pollutant emission figures from power
stations in 2009 (Source: Institute of Energy, 2010):

PM: 7,862 tonnes/year

SO2: 31,550 tonnes/year

NOx: 51,203 tonnes/year

An assessment of ambient air quality in power production areas, based on assessment of the
baseline environment data of the electricity sector in 2007 and 2008, is presented below:

Hydropower:
The quality of ambient air in and around hydropower stations is very good. All samples show
very low concentrations of PM and other air pollutants. The level of noise and vibration in these
hydropower stations is also within limits, except for in Song Hinh station, Da Nhim-Ha Thuan-
Da Mi station, Tri An station, and Yaly station, where the noise level in the turbine station is
higher than the permitted level.

Thermal power:

Air quality in and around gas-fired thermal power stations is quite good. PM concentration in
104
several stations was recorded at above the permitted level due to the road condition (earth road)
and high level of traffic at intersections. These are thermal stations ran by the Phu My Thermal
Power Single Member Limited Liability Company, the Thu Duc Thermal Power Single Member
Limited Liability Company, the Can Tho Thermal Power Single Member Limited Liability
Company, and the Ba Ria Thermal Power Joint Stock Company. The noise level recorded in
some areas inside some thermal power stations was higher than the permitted level.

Air quality in and around coal-fired thermal power stations mostly satisfies basic standards in
current regulations. Localized pollution occurs in some stations, for example the Ninh Binh
thermal power station.
General assessment shows that atmospheric pollution is only an issue of concern in the area
around thermal power stations, especially old thermal stations such as the Pha Lai 1 and the Ninh
Binh stations. According to the assessment, atmospheric pollution situation has improved in the
recent years after a PM treatment facility for gaseous emissions was installed in these stations.
This proves that attention to environmental issues can reduce potential negative impacts12.

In conclusion, with or without PDP VII, the air quality is still affected by gaseous emissions from
other economic sectors and especially from thermal power plants of PDP VI.

b. Water quality

Surface water:

Water management in river basins is a complex issue. Water quality in many rivers is decreasing,
especially in river sections in urban areas, industrial parks, and trade villages. Water pollution in
the three basins of Cau - Nhue – Day and the Dong Nai river system is currently a pressing issue.
Water in these rivers is severely polluted due to untreated wastewater discharges from industrial
and domestic activities. In some places, water quality is decreasing rapidly. Some indicators such
as BOD5, COD, NH4, total N, and total P in water are many times higher than the permitted
level.

Water quality in the upstream of rivers is considerably good. Water pollution often occurs in the
middle and lower sections of rivers. Pollution situation in rivers becomes worse during dry
season when flows reduce. Surface water pollution in rivers, lakes, canals, etc., is increasing in
urban areas. The level of water pollution is often dependent on the level of wastewater discharge.
The figure below shows the total amount of wastewater discharge in national scale.

12
Environmental protection baseline data compilation for industries in Vietnam, EVN, 2007. 105
Figure 2.10. The Increasing Rate of Wastewater Discharges from Industrial Parks
and from All Economic Sectors in Vietnam
(Source: Vietnam Environment Report 2009: Industrial Park Environment)

The amount of wastewater discharges varies by sector and region, depending on the level of
industrial intensity. The largest amount of wastewater comes from the South East, accounting for
49% of the total wastewater discharge of the whole country.

Figure 2.11. Wastewater Discharges by 6 Economic Focal Regions

(Source: Vietnam Environment Report 2009: Industrial Park Environment)

There is an increasing number of canals, lakes and ponds that are becoming storage space for
industrial and domestic wastewater. Table 2.6 presents the total wastewater discharges and
pollutant loads in wastewater discharges to rivers from industrial parks in 4 economic focal
regions.

106
Table 2.6. Total Wastewater Discharges and Pollutant Loads in Wastewater
Discharges from Industrial Parks in 4 Economic Focal Regions in 2009.

(Source: Vietnam Environment Report 2009: Industrial Park Environment)

The changes in the level of some pollutants in wastewater discharges are observed every year to
monitor the development trend and speed of water quality in rivers. It is possible to see the
development trend of surface water quality from some detailed research and survey results.

Changes to the level of COD in rivers (especially the level of COD and DO in Thi Vai River)
where Ba Ria and Phu My thermal power plants are located, are very important. Water is taken
from rivers for cooling and other purposes in power plants. After that, the water is discharged back
to rivers. During the period of 2005-2008, pollution in these rivers increased rapidly due to
increased industrial activities.

107
Figure 2.12. Level of COD in Rivers during the Period 2008-2009
(Source: Vietnam Environment Report 2009: Industrial Park Environment)

Figure 2.13. Changes to Level of COD in Thi Vai River over the Years

Figure 2.14. Changes to Level of DO in Thi Vai River during the Period 2008-2009
(Source: Vietnam Environment Report 2009: Industrial Park Environment)

108
Figure 2.15. Level of NH4+ in the Thai Nguyen section of Cau River in 2009
and Level of DO in Cau River over the Years
(Source: Vietnam Environment Report 2009: Industrial Park Environment).

The level of pollution in upstream rivers, where the hydropower plants are, is usually not
high. The middle and lower sections of rivers are usually more polluted due to developed
economic activities and population density.

Groundwater: Groundwater in most coastal areas is contaminated with salt. Over-

exploitation of water and water extraction without proper planning reduce the level of
groundwater. This situation is widespread in the Red River Delta and the Mekong Delta.
Groundwater in many areas has shown signs of phosphate (P-PO43-) and Arsenic
contamination. Over-exploitation of groundwater also leads to salt intrusion in coastal
areas.

Shallow groundwater in some trade villages specializing in food processing, husbandry,

slaughtering, silk making and weaving, and leather processing, etc., has shown signs of
serious pollution: the level of NH4+ in groundwater in Duong Lieu village, which
specializes in starch production, and in Phung Xa village, which specializes in weaving
and fabric dying, is very high at between 17.75 and 18.46 mg/l; the level of H2S in
groundwater in Tan Phu Dong village in Dong Thap province, which specializes in starch
production, is at 28.4 mg/l. The level of Coliform in groundwater in these villages is also
between 2 and 100 times higher than the permitted level.

Groundwater related subsidence has been seen in Phap Van, Hanoi and Thi Nghe, Ho Chi
Minh City but there is no monitoring data.

Seawater: Seawater quality is generally good, except for in some areas near river mouths
and some highly populated coastal areas with industrial establishment and seaports.
However, the risk of sea pollution due to human activities is becoming more and more
obvious.

Water quality in hydropower zone of influence

According to the SEA of PDP VI in 2006, the amount of water supply to and water
109
discharge from power development projects in the period 2011-2015, when the power
production is expected to increase to 20,200 MW, and until 2025 when the power
production is expected to increase to 65,400 MW, are as followed:
- Water supply to power development projects:

0.83 m3/h x 20,200 MW = 16,833 m3/h

0.83 m3/h x 65,400 MW = 54,500 m3/h.

- Water discharge from power development projects:

0.2 m3/h x 20,200 MW = 4,040 m3/h

0.2 m3/h x 65,400 MW = 13,080 m3/h.

According to these figures, the level of water supply to and water discharge from power
development projects are already quite high, even without PDP VII.

The base environmental data report for the manufacturing sector in Vietnam in 2007 and 2008
included annual monitoring data from power production companies. Analysis of water quality
survey data in this report shows that:

Water quality in reservoirs: Water quality in most reservoirs is quite good, with standard physical,
metal, and bacteria levels. The level of coliform in Tri An reservoir and the level of Nitrogen in
wastewater outlets of La Nga Surgar Factory are both higher than the permitted levels. At the Song
Hinh hydropower station, samples collected from the upper section of reservoir B at 2,500 m and
700 m before flood gate, from the upper section of reservoir A at 2,800 m and 500 m before flood
gate, from the water intake, from the upper section at 300 m before the Song Hinh flood gate, and
from the middle of Song Hinh reservoir, all show high level of bacteria, as the result of increasing
migration, cultivation and husbandry activities along the Kon River section from the hydropower
plant to the management and operation office.

Surface water of rivers receiving wastewater discharges from thermal power plants, as data from
provincial departments show, is mostly contaminated due to human activities from residential
areas around the project sites. For example: surface water quality of Hau River and Tra Noc River
(at the section near Can Tho thermal power station) is only at B level. Some water quality
indicators are even above the limit of B level. On top of that, these rivers are still receiving on a
daily basis large quantities of cooling water and water discharges from other activities from
thermal power plants, which contain various pollutants. Wastewater discharges from power plants
are contributing to the pollution of river water.

Managers of hydropower plants claim that the pollution of surface water in rivers and reservoirs
is not from the operation of the hydropower plants but from agricultural and aqua-cultural
activities, and eco-tourism projects by local authorities in the reservoir area, which do not only
affect the water quality in the reservoir but also disturb the operation of the hydropower plants.

Wastewater quality: Wastewater from hydropower plants mostly comes from domestic activities.
Test results of wastewater from hydropower plants after treatment show that wastewater is at
level A before discharge.
110
Wastewater from thermal power plants comes from living, production, and other industrial
activities. According to survey results, wastewater from thermal power plants is often treated to
acceptable quality before discharge. However, test results of wastewater discharges from several
thermal power plants prove otherwise:

- Ninh Binh thermal power plant: the level of mineral oil is above limit.

- Line 1 of the Pha Lai thermal power plant: test results of many years show that the
wastewater discharges do not meet the standards for industrial wastewater. Some
monitoring parameters are many times higher than the permitted levels, such as Coliform
(1-3 times higher), COD, BOD and TSS (4-5 times higher), and mineral oil. The level of
TSS at Line 2 is also higher than the permitted level, which contributes to affect the water
quality of Kinh Thay River.

- Uong Bi thermal power plant: level of TSS and Coliform in wastewater is also higher than
the permitted level.

Groundwater quality: Analyses of annual data show that most monitoring parameters are lower
than limits, except for iron and Coliform.

c. Changes to Soil Quality

Vietnam’s economy relies on agriculture, mostly wet rice production. Other agricultural activities,
forestry and aquaculture (including crop growing, husbandry, agricultural and forestry product
processing) contribute to around 20.91% of the GDP and 22.12% of the NDP in 2009.
However, soil quality in Vietnam is deteriorating dramatically. According to data from the
coordination office for the United Nations Convention to Combat Desertification (MARD),
around 7,055,000 ha of land in Vietnam are affected by desertification, including 7,000,000 ha of
heavily degraded and lateritized land, 400,000 ha of sand dune and moving sand bank in the
central provinces, 120,000 ha of eroded land in the North West, Central Highlands and other
places, 30,000 ha of saline and sulfated land in the Mekong Delta (Long Xuyen Quadrangle), and
300,000 ha of seasonal or permanent drought land in the South Central provinces of Binh Thuan,
Ninh Thuan and south of Khanh Hoa13. This situation poses a threat to food security and
livelihood of Vietnamese people.
2.2.2.4. Solid Waste and Toxic Waste
Vietnam generates 15 tonnes of solid waste on the average every year. The amount of solid waste
in Hanoi is 730,000 tonnes per year, accounting for 5% of the total amount of solid waste of the
country, which is a very big for a small area. It is predicted that the amount of solid waste
generated in Hanoi will only increase. If appropriate and timely actions are not taken, this
situation will have serious impacts on human health and the environment.

Solid waste is categorized into two types: normal solid waste and toxic solid waste.

Normal solid waste include: grass, trash and garbage, mops and gloves which do not contain
toxic material, electricity cables, insulated ceramic conductors, glass insulators, metal, wood,

13
World Development Report 2010, Development and Climate Change, World Bank 111
stationery, papers, concrete, sand, soil etc.

Toxic waste include: filters, mops and gloves with oil stain, used batteries and lead
accumulators, insulating oil, lubricating oil, heat transferring oil, hydraulic oil, neon light bulbs,
fluorescent light bulbs and other materials that contain mercury, electronic and electrical
devices, waste products from paint scraping, peeling or varnish, aluminum lead, used
cartridges, used oil from machinery, metal cables that contain oil, break pads and other used
parts from cars that contain oil, chemicals, carbonate, silica gel with oil content, etc.

Apart from that, solid waste from coal-fired thermal plants, such as coal ash and clay, is also
increasing. This kind of solid waste raises concerns about the environment, especially because it
requires large areas of land for storage. According to statistics from the recent years, the whole
electricity sector has signed up for producing around 34,129 tonnes of normal waste per month,
including coal ash and clay. The amount of this kind of waste according to the PDP VI forecast is
presented below:

Year 2009 2011 2015 2020 2025

Coal ash and bi-products from SO2 2.61 3.57 7.19 11.74 14.13
treatment process (million tonnes)

The amount of solid waste is predicted to increase over the years, depending on the population
growth, production types and consumption patterns, and industrial development, of which the later
two are much influenced by the implementation of the PDP VI.

2.2.2.5. Natural Resources Efficiency and Conservation

Natural resources include fauna and flora resources, water and land resources, and mineral
resources. Fauna and flora resources and water resources have been reviewed in the previous
sections. This section particularly focuses on land resources and mineral resources, especially
fossil fuels, as the main primary energy.

In the last decade, the energy supply system in Vietnam, including extraction, production and
supply of primary energy such as coal, crude oil, gas and especially hydropower, has achieve
some strong progress and contributed to the economic development and life improvement in the
country.

The use of natural resources (coal, oil and gas, diesel, and hydropower) for electricity generation
affects the extraction and availability of these resources. Below is a review of energy extraction
and use:
Coal production: Growth at 9.6% per annum on average during the period 1991-2000, and 16.7%
per annum on average during the period 2001-2008. Total production in 1990 was 4.6 million
tonnes, in 2000 was 11.6 tonnes, in 2005 was 34.1 tonnes and in 2008 was 39.8 tonnes (Source:
Statistical Year Book of Vietnam National Coal and Mineral Industries Cooperation).

The table below presents information about coal consumption for electricity generation according to
forecast in the PDP VI.

Coal Consumption 2009 2011 2015 2020 2025

112
North - Domestic – million tonnes 8.309 11.56 19.99 27.68 39.58
North - Imported - million tonnes 7.05
Central - Imported - million tonnes 5.17
South - Imported - million tonnes 0.382 0.35 3.98 11.46 24.54
Total 8.69 11.91 23.97 39.14 76.34

According to the development forecast in PDP VI, total coal demand for electricity generation
is 11.9 million tonnes in 2010, 24 million tonnes in 2015, 39.1 million tonnes in 2020, and 76.4
tonnes in 2025. Imported coal is around 4 million tonnes in 2015, around 11.5 tonnes in 2020,
and around 36.7 million tonnes in 2030. Primary energy shortage will be the case even
without PDP VII. However, with the implementation of PDP VII, the issue of primary energy
shortage will be much pressing.

Oil and gas extraction: Crude oil extraction was at 40,000 tonnes in 1986, 2.7 million tonnes
in 1990, and 7.6 million tonnes in 1995. The rate of increase in crude oil extraction was at 23%
for the period 1986-1995. In 2000, crude oil extraction topped at 16.3 tonnes. From then it
started to decrease. In 2008, it was at 14.85 million tonnes. The rate of increase in crude oil
extraction was 19.7% for the period 1990-2000 and -1.2 % for the period 2000-2008. All of the
crude oil was for export. In 2008, 800,000 tonnes of crude oil were used for a pilot oil refinery
project at the Dung Quat oil refinery14.

Natural gas has been used for electricity generation since the end of 1995, when the pipe system
connecting Bach Ho oil field to Ba Ria power station was completed. Since 1999, gas has been
supplied to Phu My power station and LPG factory in Dinh Co. Natural gas extraction was at
1.6 billion m3 in 2000. In 2008, it increased by 5 folds to 7.9 billion m3. Average rate of
increase of natural gas extraction was at 22.4% per year for the period 2001-2008. The table
below summaries natural gas extraction progress in the period 1995-2008:

Table 2.7. Natural gas extraction in the period 1995-2008

Unit: million m3

Year 1995 2000 2005 2006 2007 2008

Extracted 183 1580 6890 7520 6860 7944

Gas for electricity 182 1224 4460 4950 5050 5410

generation

Source: Statistical Year Book 2009, Petro Vietnam

Hydropower: Hydropower plays an important role as one of the power sources in Vietnam. In
the period 1990-2002, the proportion of electricity produced from hydropower in total
electricity production changed every year, at the highest of 75% in 1994 and the lowest of 51%
in 1998. In the recent years, there have not been so many new hydropower plants but many new
thermal power plants with high capacity. Therefore, hydropower is decreasing in the power

14
Source: Statistical Year Book, Petro Vietnam. 113
sources balance, from 51.9% in 2000 to 32.8% in 2008 (Source: Institute of Energy).

Energy import/export: There is a strong increase in crude oil and coal export. Vietnam has
grown from an energy importer to an energy exporting country in the region. In spite of that,
Vietnam still has to import most oil products, which have mostly satisfied the country demand for
economic development in the past. The table below shows the energy import/export in the period
1990-2008.

Table 2.8. Energy import/export in the period 1990-2008

Unit: 1,000 tonnes

Year 1990 1995 2000 2005 2006 2007 2008

Oil product import 2,888 5,004 8,748 9,636 11,894 13,651 13,665

Crude oil export 2,617 7,652 15,423 17,967 16,442 15,062 13,908

Coal export 789 2,821 3,251 17,987 29,308 31,948 19,699

Electricity import (GWh) 383 966 2,630 3,220

Source: Statistical Yeark Book 2009, Custom Bureau, EVN.

Primary energy consumption: Demand for primary energy is increasing, from 5.6% in the
period 1990-2005 to 6.4% in the period 2006-2008. Demand for gas was the strongest increase at
20.5% per annum in the period 2000-2008. The table below shows the levels of consumption of
various types of primary energy:
Table 2.9. Primary Energy Import/Export Unit: KTOE

Year 1990 1995 2000 2005 2006 2007 2008

Coal 2,212 3,314 4,372 8,341 9,030 9,681 12,017

Petrol and oil 2,860 4,617 7,917 12,336 12,022 14,149 14,058

Gas 7.7 186 1,441 4,908 5,360 5,653 6,408

Hydropower 2,063 3,237 4,314 3,835 4,619 5,213 5,881

Non-commercial 12,421 12,872 14,191 14,794 14,767 14,748 14,724

Electricity import 33 83 226 277

Total 19,564 24,225 32,236 44,247 45,881 49,670 53,364

The consumption of primary energy for electricity production and percentage against total primary
energy consumption is shown in the table below. 114
Table 2.10. Consumption of Primary Energy for Electricity Production and
Percentage Against Total Primary Energy Consumption
Unit: KTOE
Year 1990 1995 2000 2005 2006 2007 2008

Total 2,212.2 3,313.5 4,372.5 8,341.5 9,030.4 9,681.2 12,016.7

Coal

For E.P. 888 710 1150 2,990.7 3,468.0 3,591.7 3,727.9

% 40.1 21.4 26.3 35.9 38.4 37.1 31.0

Petrol&oil

Total 2,859.6 4,616.6 7,916.9 12,336.3 12,022.2 14,148.9 14,057.8

For E.P. 381 369 1310 699.7 483.1 821.0 590.0

% 13.3 8.0 16.5 5.7 4.0 5.8 4.2

Total 7.74 185.85 1,441.35 4,907.7 5,360.4 5,652.9 6,408.0

Gas

For E.P. 2.7 165 1,102 4,154.3 4,636.4 4,916.3 5,693.0

% 34.9 88.6 76.4 84.6 86.5 87.0 88.8

Source: EVN; Petro Vietnam. (E.P.: Electricity Production)

Analysis of national total primary energy consumption and primary energy consumption in the
electricity sector according to the PDP VI shows a strong decrease in the availability of natural
resources in Vietnam after the year 2015.

2.2.2.6. Climate Change

Climate change is caused by the increased level of CO2 and other greenhouse gases, mostly
from gaseous emissions. Analyses of climate data of Vietnam show the following details of
concern about climate change and rising sea level:

Temperature: In the past 50 years (1958-2007), average temperature in Vietnam increased from
0.5oC – 0.7oC. Temperature in winter increases faster than in summer and in the North than in
the South. Annual average temperature of the four decades from 1961-2000 is higher than of the
three decades before that (1931-1960).

Rainfall: Annual average rainfall in nine years from 1991-2000 varied in time and space.
Annual rainfall decreases in the North and increases in the South. On the average, annual
rainfall in 50 years (1958-2007) decreased by about 2%.

Cold air mass: The number of cold air mass affecting Vietnam is clearly decreasing in the last
two decades (from the end of 20th century to the beginning of 21st century). In 1994 and in 2007
there were 15-16 cold air masses in the year, which is 56% of the annual average of many years.
The most recent abnormal weather condition was the severely cold air mass for 38 days in
January and February of 2008, which resulted in big loss in agricultural production.

Typhoon: Recently, there have been more intense typhoons, with the typhoon’s trajectory
gradually moving southwards. The typhoon season finishes later and there are more typhoons
115
with abnormal trajectory.

The number of days with drizzling rain gradually reduced during 1981-1990 and halved in the
last ten years (15 days per year).

Sea level: Monitoring data from oceanographic stations along the coast of Vietnam show that sea
level was rising at 3 mm/year on the average in Vietnam from 1993-2008, which is equivalent to
the world’s average. In the past 50 years, sea level has risen 20 cm as recorded at the Hon Dau
oceanographic station.

Assessment and evaluation of the future trends of climate change

Changes in temperature

Winter temperature might rise faster than summer temperature in all climatic regions of Vietnam.
Temperature in the Northern climatic regions might rise faster than temperature in the Southern
climatic regions. Forecast of changes in temperature is based on the three emission scenarios as
followed:

Low emission scenario: By the end of the 21st century, the annual average temperature in the
Northern climatic regions might be from 1.6 to 1.9 oC higher than the annual average temperature
in the period 1980-1999, whilst in the Southern climatic regions the increase might be less, from
1.1 to 1.4oC.

Table 2.11. Annual Average Temperature Increase (oC) Compared with the Period
1980-199915 - Low Emission Scenario
Timeline in the 21st century
Region
2020 2030 2040 2050 2060 2070 2080 2090 2100
North West 0.5 0.7 1.0 1.2 1.4 1.6 1.6 1.7 1.7
North East 0.5 0.7 1.0 1.2 1.4 1.5 1.6 1.7 1.7
Red River Delta 0.5 0.7 0.9 1.2 1.4 1.5 1.5 1.6 1.6
North Centre 0.6 0.8 1.1 1.4 1.6 1.7 1.8 1.9 1.9
South Centre 0.4 0.6 0.7 0.9 1.0 1.2 1.2 1.2 1.2
Central Highlands 0.3 0.5 0.6 0.8 0.9 1.0 1.0 1.1 1.1
South 0.4 0.6 0.8 1.0 1.1 1.3 1.3 1.4 1.4
Medium emission scenario: By the end of the 21st century, the annual average temperature might
increase by 2.6oC in the North West, 2.5oC in the North East, 2.4oC in the Red River Delta, 2.8oC
in the North Centre, 1.9oC in the South Centre, 1.6oC in the Central Highlands, and 2oC in the
South compared with the annual average temperature in the period 1980 – 1999.

15
Climate change scenation report, MoNRE. 116
Table 2.12. Annual Average Temperature Increase (oC) Compared with the Period
1980-1999 – Medium Emission Scenario
Timeline in the 21st century
Region
2020 2030 2040 2050 2060 2070 2080 2090 2100
North West 0.5 0.7 1.0 1.3 1.6 1.9 2.1 2.4 2.6
North East 0.5 0.7 1.0 1.2 1.6 1.8 2.1 2.3 2.5
Red River Delta 0.5 0.7 0.9 1.2 1.5 1.8 2.0 2.2 2.4
North Centre 0.5 0.8 1.1 1.5 1.8 2.1 2.4 2.6 2.8
South Centre 0.4 0.5 0.7 0.9 1.2 1.4 1.6 1.8 1.9
Central Highlands 0.3 0.5 0.6 0.8 1.0 1.2 1.4 1.5 1.6
South 0.4 0.6 0.8 1.0 1.3 1.8 1.8 1.9 2.0

High emission scenario: By the end of the 21st century, annual average temperature in the
Northern climatic regions might increase from 3.1 to 3.6oC compared with the period 1980 –
1999, with the regional increase of 3.3oC in the North West, 3.2oC in the North East, 3.1oC in the
Red River Delta, and 3.6oC in the North Centre. Annual average temperature increase in the
Southern climatic regions might be 2.4oC in the South Centre, 2.1oC in the Central Highlands,
and 2.6oC in the South.

Table 2.13. Annual Average Temperature Increase (oC) Compared with the Period
1980-1999 – High Emission Scenario
Timeline in the 21st century
Region
2020 2030 2040 2050 2060 2070 2080 2090 2100
North West 0.5 0.8 1.0 1.3 1.7 2.0 2.4 2.8 3.3
North East 0.5 0.7 1.0 1.3 1.6 1.9 2.3 2.7 3.2
Red River Delta 0.5 0.7 1.0 1.3 1.6 1.9 2.3 2.6 3.1
North Centre 0.5 0.9 1.2 1.5 1.8 2.2 2.6 3.1 3.6
South Centre 0.4 0.5 0.8 1.0 1.2 1.5 1.8 2.1 2.4
Central Highlands 0.3 0.5 0.7 0.8 1.0 1.3 1.5 1.8 2.1
South 0.4 0.6 0.8 1.0 1.3 1.6 1.9 2.3 2.6

Changes in rainfall

Rainfall in dry season might decrease in most climatic regions in the country, especially in the
Southern climatic regions. Rainfall in wet season and mean annual rainfall might in crease in all
climatic regions.
Low emission scenario: By the end of the 21st century, mean annual rainfall might increase by 5%
in the North West, North East, Red River Delta and North Centre, and from 1-2% in the South
Centre, Central Highlands, and South compared with the annual average in the period 1980 –
1999. Rainfall in the period from March to May might decrease from 3-6% in the Northern
climatic regions and rainfall in the middle of dry season in the Southern climatic regions might
decrease by from 7-10% compared with the period 1980-1999. Rainfall during the peak months
of the wet season might increase from 6-10% in all four climatic regions in the North and at
117
around 1% in the Central Highlands and the South compared with the period 1980-1999.

Table 2.14. Changes in Annual Rainfall (%) Compared with the Period 1980-1999 –
Low Emission Scenario
Timeline in the 21st century
Region
2020 2030 2040 2050 2060 2070 2080 2090 2100
North West 1.4 2.1 3.0 3.6 4.1 4.4 4.6 4.8 4.8
North East 1.4 2.1 3.0 3.6 4.1 4.5 4.7 4.8 4.8
Red River Delta 1.6 2.3 3.2 3.9 4.5 4.8 5.1 5.2 5.2
North Centre 1.5 2.2 3.1 3.8 4.3 4.7 4.9 5.0 5.0
South Centre 0.7 1.0 1.3 1.6 1.8 2.0 2.1 2.2 2.2
Central Highlands 0.3 0.4 0.5 0.7 0.7 0.9 0.9 1.0 1.0
South 0.3 0.4 0.6 0.7 0.8 0.9 1.0 1.0 1.0

Medium emission scenario: By the end of the 21st century, mean annual rainfall might increase
from 7-8% in the North West, North East, and Red River Delta, and from 2-3% in the South
Centre, Central Highlands, and South compared with the period 1980-1999. Rainfall in the period
from March to May might decrease from 4-7% in North West, North East, and Red River Delta,
and around 10% in the North Centre. Rainfall in the middle of the dry season in the Southern
climatic regions might decrease from 10-15% compared with the period 1980-1999. Rainfall in
the peak months of the wet season might increase from 10-15% in all four climatic regions in the
North and in the South Centre, and only increase by less than 1% in the Central Highlands and
the South.

Table 2.15. Changes in Annual Rainfall (%) Compared with the Period 1980-1999 –
Medium Emission Scenario
Timeline in the 21st century
Region
2020 2030 2040 2050 2060 2070 2080 2090 2100
North West 1.4 2.1 3.0 3.8 4.6 5.4 6.1 6.7 7.4
North East 1.4 2.1 3.0 3.8 4.7 5.4 6.1 6.8 7.3
Red River Delta 1.6 2.3 3.2 4.1 5.0 5.9 6.6 7.3 7.9
North Centre 1.5 2.2 3.1 4.0 4.9 5.7 6.4 7.1 7.7
South Centre 0.7 1.0 1.3 1.7 2.1 2.4 2.7 3.0 3.2
Central Highlands 0.3 0.4 0.5 0.7 0.9 1.0 1.2 1.3 1.4
South 0.3 0.4 0.6 0.8 1.0 1.1 1.2 1.4 1.5

Sea level rise

Calculations based on the low, medium, and high emission scenarios show that in the middle of
the 21st century sea level might rise from 28 to 33 cm and by the end of the 21 st century sea
level might rise from 65 to 100 cm compared with the period 1980-1999 (Table 2.16).

118
Table 2.16. Sea Level Rise (cm) Compared with the Period 1980-1999
Timeline in the 21st century
Region
2020 2030 2040 2050 2060 2070 2080 2090 2100
Low 11 17 23 28 35 42 50 57 65
Medium 12 17 23 30 37 46 54 64 75
High 12 17 24 33 44 57 71 86 100

Figure 2.16. Forecast of Sea Level Rise (cm) According to the 3 Climate Change
Scenarios
The future trends of climate change as described above show that there will be challenges to socio-
economic development in the near future, especially in areas that are prone to drought in dry
season. Priorities will need to go to multi-purpose reservoir management as a solution.

2.2.2.7. Energy Security

In the past 10 years, energy security and environmental conflicts have become issues of concern
of many countries, including Vietnam. These issues are viewed as an inevitable trend as the result
of the scarcity of the traditional primary energy whilst new energy is still expensive. Energy price
is increasing along with the rise of human’s demand for energy. Science and technology is
developing day by day however it is still not catching up with human’s demand.

As analyses in the section 2.2.2.5 show, by the year 2015 energy security still might not be a
pressing issue in Vietnam. Vietnam will only be starting to join the international energy market
by that time so its reliance on this market is still not significant. However, this reliance will
increase accordingly with the energy demand increase as in the forecast.

2.2.2.8. Environmental Conflicts, Risks and Accidents

Environmental conflict is increasing in the same track as energy security. Environmental conflict
could be over resources amongst different communities in one society, or amongst countries. It
could also be between preservation and development, which are represented by different groups
in a society. The roots of environmental conflict are the unequal distribution of natural
resources, regional economic development gaps, the link between economic development and
environmental pollution, and between population growth and natural resources encroachment.
119
Environmental conflict can be of different levels. The breeding phase starts with differences in
purposes and incompatibilities in actions. If this situation persists, there might be conflicts or
disagreements over the management of resources and benefit sharing. If these conflicts are not
resolved, they will develop to a higher and more aggressive level, which might lead to actions
such as meetings, demonstrations, petitions, or more seriously armed conflicts, which pose threats
to social and political stability. Examples are the conflict over water resources in the Mekong
River Basin, or the case of wastewater discharges of Vedan factory. Another example is the
conflict over water resources in Vu Gia River, which is still an on-going issue. According the
SEA of Vu Gia-Thu Bon hydropower development project, if the Dak Mi 4 hydropower project
takes water from Thu Bon River without discharging water to Vu Gia River, as proposed by the
Da Nang authority, more than 1.7 million people in the lower Vu Gia River Bain will suffer from
water shortage for around 9 months in a year and more than 20,000 ha of production land will be
at risk of desertification.

Environmental risk and accident can either be as the result of natural disaster, climate change,
broken dam, or aftershock in reservoir, etc., or it can be human-induced.

The followings are some examples of human-induced environmental risks and accidents:

Erosion and sedimentation: During the typhoon number 9 in Quang Nam Province, a flash flood
swept through Dai My commune, where 240 households resided on the side of Con River. The
flood water brought with it wood logs and mud from upstream, destroyed houses, and covered
gardens and crops in 2 meters of mud. A series of hydropower projects were under development
upstream of Con River at the time, including the An Diem 1, An Diem 2, and Song Con 2, etc.

According to the International Centre for Environment Management (ICEM), sedimentation of

rivers in Quang Nam is currently at an alarming state. As recorded at the Thanh My monitoring
station in Nam Giang, Vu Gia River receives 460,000 tonnes of sand and soil run-off every year.
ICEM has warned that at this speed of sedimentation in the area, the old town of Hoi An will
become the target of many big floods.

Downstream desiccation: Also according to ICEM, reservoir filling of the Song Bung 4
hydropower project (490 million m3) will lead to downstream desiccation and water shortage for
production. On top of that, the construction of too many dams in upstream river will result in the
risk of salt intrusion in estuaries and loss of nutrition for the East Sea.

Downstream flooding: The design of some hydropower dams incorporates flood control feature.
However, during operation, although water discharges are done accordingly with regulations by
MoIT, untimely releases of floodwater are unavoidable and causing severe loss of life and assets
in lower river basins. It is not a problem if water is released when downstream water level is
low. However, releasing water when downstream water level is at about flood level 3 will result
in serious consequences.

On the other hand, many hydropower dams in Vietnam still do not always follow government
regulations when it comes to releasing water from dams. Water is often released without
notification and coordination with relevant parties, which results in many risks, especially in the
case of cascade hydropower projects development, as regarded in the “Recommendations of the
120
World Commission on Dams for Hydropower Development in Dong Nai River Basin”.

Lessons about flood control were evident in the typhoon 9 and 10 in 2009 when floodwater
releases from Ba Ha, Binh Dien and A Vuong hydropower plants resulted in a historical flash
flood that caused severe damages to life and assets. More details are presented below:

Floodwater releases of A Vuong hydropower plant on the two days of September 29 and 30
contributed to the flooding of a large area in the lower river basin, which resulted in serious
damages. Losses caused by typhoon number 9 in Quang Nam province was estimated at 3,500
billion VND, of which the cost of damages to Dai Loc district, which was directly affected by the
floodwater releases from A Vuong, was estimated at over 600 billion VND.

The Binh Dien hydropower plant (by Binh Dien Joint Stock Company in Thua Thien - Hue)
opened all its five flood gates all year round to the Huong River (Perfume River), causing serious
impacts in the lower river basin.

The Ba Ha reservoir, located in Ba River Basin, was designed to control flood and protect the Tuy
Hoa township and important residential and economic areas in the lower river basin. However, the
flood control capacity, which was at 256.5 million m3 in the planning phase, was reduced to
167.3 million m3 in the feasibility study phase and was reduced even more in the technical
design, which included a method that was supposed to reduce floodwater level to 2.5 m lower
than the normal rising water level. This project therefore is not performing its flood control
function as planned.

Decisions to release flood water at the wrong times and technical solutions that disregard
environmental impacts and risks are the main contributing factors to flooding in lower river
basins. The main problems are the focus on power generation capacity and safety of the structures
and lack of attention to the flooding issue in lower river basins.

2.2.2.9. Current State and Future Trends of Socio-economic Development

The development of power in any place, any country, has implications for a wide range of social
and environmental issues. Of course, not all of these are relevant in all places and some will be
far more important than others. This section discusses the range of issues that need to be
considered in the assessment of social and environmental risks and impacts as part of a strategic
planning process for the power sector in the later chapter.

Vietnam is located in South East Asia, and running north-to-south with a coastline of 3,260 km.
The widest point from East to West of the country is 600 km in the North, and the narrowest
point is about 50 km in the Centre.

Based on natural and social conditions, and traditional economic relations, Vietnam can be
divided into 6 ecological regions, with the land area of each ecological regions detailed in the
table below.

121
Table 2.17. Land Area in the Six Ecological Regions of Vietnam

Natural Land area distribution across sectors (%)

No. Region land area
Agri- Fores- Special Residen-
(km2) culture try Use tial Total
Red River Delta
1 21,063 37.7 21.9 13.8 6.3 100
Northern middle and
2 95,337 15.0 54.8 2.9 1.1 100
mountainous region
North Centre and South
3 Central Coast 95,886 18.4 53.8 4.8 1.8 100

4 Central Highlands 54,641 30.5 56.4 2.9 0.6 100

5 South East 23,605 59.0 21.6 8.6 2.7 100

Mekong Delta
6 40,519 63.0 8.2 6.0 2.8 100
Nation-wide 33,1051 29.0 44.6 4.9 1.9 100

Source: Statistical Year Book 2009

Land area for different purposes varies from one ecological region to another. The Red River Delta
region has a natural land area of 21,063 km2, of which 38% is used for agricultural production.
This region has a higher population density than all the other regions with around 932 people/km2
whilst the national density is 260 people/km2.

In the South, 63% of the land area in the Mekong River Delta is used for agricultural production,
and 56.4% of the Central Highlands is forest area. In general, about 73.6% of the total land area
of the country is used in agriculture and forestry.

a. Population and Employment

According to the preliminary results of the population and housing survey in 2009, the total
population of Vietnam is 85.789 million people. Population growth during the period 1999-2009
was at 1.2%. More than 70% of the Vietnamese population live in the delta and middle land,
mostly the Mekong Delta, Red River Delta and along the coast. Although the population growth
rate slowed down, Viet Nam’s population is still growing with about 1 million more persons per
year. Population growth rates vary considerably between regions. High growth rates are found in
the Central Highlands and the South East. The lowest population growth rates occur in the North
and South Centre, and the Mekong Delta.

Vietnam has 54 different ethnic groups, of which the majority are Kinh people, accounting for
86.2% of the total population. There are 12 million people of different minority groups, accounting
for nearly 14% of the total population. Ethnic groups such as the Tay, Thai, Muong, Khmer, 122Hoa,
Nung, H’mong, Dao, Ede, Gia rai, Cham, and Sai Gui live in mountainous and remote areas in the
North (Hoa Binh, Thanh Hoa, Lang Son, Cao Bang, Son La and Lai Chau), the Central Highlands
(along the Truong Son mountain and the central coast), and the Mekong Delta. The smallest
ethnic groups are the Brau, O Du and Ro Mam, with a total population of around 650 people.
There are about 322 Brau and O Du people living in Bo Y commune, Ngoc Hoi district in Kon
Tum province. About 350 Ro Mam people live in Sa Thay, Kon Tum province in the Central
Highlands. Ethnic minority people live in mountainous areas, which accounts for ¾ of the
natural land area of the country. They experience less development and their life are much
dependent on the nature.

By April 1, 2009, total urban population was 25.4 million, accounting for 29.6% of the total
population, and rural population was 60.4 million, accounting for 70.4% of the total population.
In the period 1999-2009, annual population growth in urban area was at 3.4% whilst growth was
at only 0.4% in rural area. Most of the urban population concentrates in the South East and the
Red River Delta.

In 2009, there were 42.5 million males, accounting for 49.5% of the population, and 43.3 million
females, accounting for 50.5% of the population. The male to female ratio was 98.1 males for
every 100 females.

Also according to the 2009 population and housing survey, 55 million Vietnamese people are in
working age, of which 45.2 million people are in the labor force, accounting for 82.2% of the
total population in the labor age. 43.9 million people in working age are employed, accounting
for 51.1% of the total population, of which 12 million people are working in urban areas,
accounting for 27% of the total people in working age who are employed, and 31.9 million
people are working in rural areas, accounting for 73%. 56.7% of the people in labor age finish at
least secondary school, 27.8% of which hold a high school diploma or higher. 5.3% of the people
in labor age are university graduates, of which 14.4% are in urban areas and 1.8% are in rural
areas, and 5.6% are male and 5% are female. At the time of the survey, 1.3 million people in
working age were unemployed. Unemployment rate at the time was 2.9% (higher than the 2.38%
in 2008). Unemployment rate in urban areas was 4.64%, which is similar to the 2008 rate.
Unemployment rate in rural areas was 2.25%, which was higher than the 1.53% in 2008).
Education level amongst ethnic minority people is very low, despite the government’s supporting
policies to improve the situation.

In the period 2004-2009, domestic migration involved 2.2 million people more than the period
1994-1999, with a significant increase in long distance migration. While the number of people
migrate within a district was 275,000, the number of people migrate within a province is 571,000,
and the number of people migrate from one province to another is 1.4 million. Regional migration
also increased by 1 million. In 2009, out of the 6 geographic-economic regions, only the Central
Highlands and the South East received more migrants coming from the other 4 regions. In the
South East, Ho Chi Minh City and Binh Duong continued to be leading economic areas, and
attracting a large number of migrants. In the North, Hanoi is also a destination for migrants.

b. State of Economy of Vietnam

Economic growth in the period 2006-2009
123
Economic growth in the period 2006-2009 was considerably high with an average annual GDP
of 7.07%, which is much higher than the GDP growth of 4.45% in the period 1986-1990, when
Vietnam started the renovation process, and also higher than the 6.95% GDP growth in the period
1996-2000, but lower than the 7.51% annual GDP growth in the period 2001-2005. Development
in the industry and construction sector achieved the highest growth of 8% per annum, followed
by 7.78% in the service sector and 3.48% in agriculture and fishery.

Growth has been experienced in all economic

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Economic growth has not been stable, which indicates that the existing governing policies have
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not successfully enabled the integrated strength of the economy to boost its growth, efficiency
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and competitiveness. Main contribution to growth is still physical capital, as in the period 2001-
,-ѭӣ&($%'ӫ$BӃ9$:ү&$/E$BӃ9$,ӕ$:ӕ&$:ұ,$%'ҩ,F$()5)$ÿ#ҥ&$3II2J3IIKF$7ӭ%$ÿH&($(HD$%ӫ5$,E)$<ҧ&$:ұ,$
2007, physical capital contributes 56.7% to economic growth. The low growth quality is shown
%'ҩ,$:E#$,ă&($,-ѭӣ&($6)&'$,Ӄ$/E$LMFKNG$.'ҩ,$/ѭӧ&($,ă&($,-ѭӣ&($,'ҩD$,'Ӈ$')Ӌ&$ӣ$O$7һ,$6)&'$,ӃF$=P$
in the economy, society and environment: the competitiveness of Vietnamese products and the
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and over-exploitation of natural resources are still on-going issues without effective remedies.
&')Ӊ7$&һ&($&Ӆ$:E$,E)$&(9BS&$,')S&$&')S&$Rӏ$,E&$D'"F$%'ѭ5$%H$%"%$()ҧ)$D'"D$6'ҳ%$D'ө%$'ӳ9$')Ӌ9G$
Vietnam’s economy is rather small. It is also facing the risk of falling backwards. In 2009,
T9B$7+$&Ӆ&$6)&'$,Ӄ$&'ӓ$:E$&(9B$%ѫ$,ө,$'ұ9$/ӟ&G$1ă7$3IIUF$VWX$ÿҥ,$6'#ҧ&($YUFM$,ӹ$Z[W$:E$
national GDP was at around 89.6 billion USD and the average income per capita was at 1,052
R4&'$89\&$ÿҫ9$&(ѭӡ)$ÿҥ,$6'#ҧ&($2GIL3$Z[WF$-ҩ,$,'ҩD$<#$:ӟ)$%"%$&ѭӟ%$D'",$,-)Ӈ&$,-#&($6'9$:ӵ%G$
USD, which is much lower compared with other developed countries in the region. Although it is
]'#ҧ&($%"%'$()ӳ5$0)Ӌ,$157$:ӟ)$%"%$&ѭӟ%$,9B$%H$-^,$&(ҳ&F$&'ѭ&($&(9B$%ѫ$,ө,$'ұ9$:Ӆ$6)&'$,Ӄ$:ү&$
catching up with other countries, Vietnam is still facing the risk of having its economy falling
%;&$/ӟ&G$$
backwards.
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investment when investment from domestic sources is still lacking. Advancement in science
technology only contributed a small part to the growth. Vietnam has the advantage of having a
ÿѭӧ%$%#)$/E$/ӧ)$,'Ӄ$,'4$:)Ӌ%$6'5)$,'"%$/ӧ)$,'Ӄ$ÿH$%'ѭ5$ÿѭӧ%$%#)$,-ӑ&($ÿ^&($7ӭ%F$6Ӈ$%ҧ$%+&($,"%$ÿE#$
large labor force. However, this advantage is not adequately taken advantage of, as the labor
,ҥ#$:E$<ӱ$`ө&(F$&'ҩ,$/E$/5#$ÿӝ&($6'9$:ӵ%$&+&($,'+&G$
force in Vietnam is neither trained nor used appropriately, especially in the rural area.
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0ӟ)$,ӕ%$ÿӝ$,ă&($,-ѭӣ&($6)&'$,Ӄ$6'"$%5#$:E$%'C&'$<"%'$D'\&$D'ӕ)$,'9$&'ұD$'ӧD$/aF$ÿӡ)$<ӕ&($ÿҥ)$Rӝ$
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GDP per capita

Thanks to a considerably high economic growth and rational income distribution policies, the life
of the majority of the Vietnamese population has been improved. Average income per capita has
increased rapidly from 730 USD in 2006 to 843 USD in 2007, 1,042 USD in 2008 and 1,052
USD in 2009.
In terms of poverty and hunger eradication, according to the new standard of the Vietnamese
government (a household is classified as poor household if the average monthly income per
person is less than 260,000 VND in urban area, and less than 200,000 VND in rural area), the
number of poor household has decreased rapidly from 15.5% of the total households in 2006 to
14.8% in 2007 and 13.4% in 2008. The number of poor household, according to the standard
jointly developed by GOS and the World Bank (a household is classified as poor household if the
average monthly income per person of less than 213,000 VND in 2006, and less than 280,000
VND in 2008), has decreased from 19.5% in 2004, to 16% in 2006, and 14.5% in 2008. This
means from 2006 to 2008, the number of poor household has decreased by 2.5%. This figure
means a lot more considering that the standard for poor household has been modified according
to international standard.

Vietnam has 54 ethnic groups, of which the Kinh majority constitutes more than 86% of the total
population. The population of the other 53 ethnic minority groups scatters in ¾ of the land area of
the country, mostly in mountainous and remote areas. These are also areas with high potential for
hydropower development and the development of other industrial projects. Therefore, there is a
large number of ethnic minority people who are effected by development projects. From the
1960s, the Government of Vietnam as initiated the “fixed cultivation and habitation” program to
help ethnic minority people to move away from shifting cultivation, which is considered the
cause of poverty and deforestation. Of course many people are still against this policy because
according to them, shifting cultivation is the traditional lifestyle of many ethnic groups and is
sustainable and suitable to their situation.

Economic restructuring

In 2009, the contribution of agriculture, forestry and fishery to GDP decreased to 20,91%, whilst
the industry and construction contributed 40.24% of the GDP, and service sector accounted for
38.85%.

Table 2.18. Restructuring of the Economic Sectors and the Labor Force (%)
No. Sector 2001 2005 2006 2007 2008 Est. 2009
All economic sectors 100.00 100.00 100.00 100.00 100.00 100.00
1 Agriculture, forestry and 23.04 20.97 20.40 20.30 22.21 20.91
fishery
2 Industry and construction 38.23 41.02 41.54 41.58 39.84 40.24
3 Service 38.73 38.01 38.06 38.12 37.95 38.85
Source: Socio-economic Statistics 2001-2009, GOS
The industry sector has made significant progress towards industrialization and modernization.
Manufacturing has shifted towards a focus on the processing industry, which brings more
125
economic value. The processing industry itself has taken advantage of locally available raw
materials to improve the value of export products.

Positive development has been seen in the service sector. Traditional services such as trade,
transport, postal and telecommunication, and hospitality have been well developed. Some
services that require low intermediary cost such as banking and insurance has developed rapidly,
which brought more value to the service sector.

Overall, economic restructuring has been slow in the last 10 years in terms of meeting the
requirements for sustainable development. Economic restructuring mainly focused on increasing
the contribution of the industry and the service sector to GDP, whilst not much attention was paid
to economic restructuring towards modernization, which involves strong development in
technology in all sectors. Many industrial establishments still use out-of-date technologies, which
are often associated with high cost, high safety requirements and low economic value.

There has not been any obvious improvement in the restructuring of agriculture and rural
economy. The economic focal regions have not developed to their full potential, with little
investment in high technology and moving towards modernization.

The restructuring of the labor force is neither spontaneous nor responsive, and not meeting the
requirements of industrialization and modernization. There is still a high proportion of the labor
force working in agriculture. There number of unskilled workers is abundant whilst what the
economy needs more is trained workers who can handle high technologies. This is an urgent
matter that needs to be addressed through proper planning.

c. Future Trends of Socio-economic Development in Vietnam

In the forecast scenario of socio-economic development, growth in the industry, construction and
service sector is not much higher than the high growth scenario but still rather high. This growth
rate reflects Vietnam’s ambition to join the list of developing countries with medium high income
per person level, which is around 3,000 USD per person per year. The world’s economy and the
Vietnam’s economy are on the road of early recovery after the financial crisis.

In agriculture, a stable growth is maintained with an appropriate, medium level of restructuring.

The contribution of agriculture in the economy is expected to decrease to 17.2% in 2020, while
the industry and service sectors each would contribute from 41-42%. By 2030, agriculture is
expected to account for around 5.7-5.8%, industry and construction sector for around 41.64%,
and service sector for 52.6%, of the economy.

In this scenario, the labor force is planned and used appropriately. Higher productivity of the
labor force would be achieved through engaging more labor from rural area in the industry and
service sectors, especially the service sector.

In general, the economy from 2009 to 2020 will experience rapid growth in the industry sector
(unless Vietnam’s integration into the world’s economy is unsuccessful and results in significant
economic turbulences, or economic recovery is slow after the financial crisis). Emerging from a
period of low growth (2008, 2009 and the first half of 2010), Vietnam’s economy could achieve
rapid growth during the period 2020-2025 before starting to stabilize.
126
The above indicators about socio-economic development are used as basis for comparison,
analysis, and assessment of socio-economic development when PDP VII is implemented.

2.2.2.10. Livelihood
Livelihood is assessed through changes in the economic sectors in Vietnam, as discussed below:

Agriculture, forestry, and fishery

Total production value of agriculture, forestry and fishery was 219.9 thousand billion VND in
2009, a 3% increase compared with 2008, of which agricultural production value was 160.1
thousand billion VND (2.2% increase), forestry production value was 7 thousand billion VND
(3.8% increase), and fishery production value was 52.8 thousand million VND (5.4% increase).

- Agriculture: The 2008 rice production was 38.7 million tonnes, which is 2.8 million tonnes
more than the 2007 production, which was the highest production in 12 years. In 2009, although
Vietnam was heavily affected by typhoons and floods, especially in the Central Highlands and
the South Central Coast, rice production was still at 38.9 million tonnes, which is 165.7
thousand tonnes more than in 2008. This high production was the result of a 47.6 thousand ha
increase in rice cultivation area, and a 30kg/ha increase in productivity. If taking account of
the 4.4 million tonnes of corn produced in the same year, the total amount of food production
in 2009 was 43.3 million tonnes, which is 24.4 thousand tonnes more than in 2008 (the corn
production was 141.3 thousand tonnes less than in 2008).

Perennial crops were doing well thanks to a price increase and the fact that some localities had
planted high yielding and high value varieties a few years before. Income from perennial crops
was higher than from other crops, which motivated local businesses and people to further expand
perennial crop area. According to a survey on animal husbandry that was done before July 1,
2009, the number of husbandry farms increased by 18.5% compared with the same time in 2008.

- Forestry: Total area of forest plantation in 2009 was estimated at 212,000 ha, which is a 5.9%
increase from 2008. Some provinces had large area of new forest such as Ha Giang (17,000 ha),
Tuyen Quang (14,900 ha), Yen Bai (13,900 ha), Thanh Hoa (12,000 ha), Nghe An (9,500 ha),
and Quang Ngai (8,700 ha). Total area of forest regeneration in 2009 was estimated at 1,032,000
ha, which is a 5.2% increase from the previous year. Timber extraction was at 3,766,700 m3,
which is a 5.7% increase from the year before. Provinces with high timber extraction volume are
Tuyen Quang (218,000 m3), Yen Bai (200,000 m3), Quang Nghai (180,000 m3), Quang Nam
(169,000 m3), Binh Dinh (167,000 m3), and Hoa Binh (135,000 m3).

Positive progress in forestation, forest protection and timber extraction is the result of better
investment. Apart from investment from projects and programs (only the “5 million ha of forest”
project in 2009 provided 1,180 billion VND, a 43.9% increase from 2008), many localities also
motivated investment from households by handling forest management responsibility to them,
which means more profit for people who engage in forest regeneration.

- Fishery: Total catch volume in 2009 was estimated at 4,847,600 tonnes, a 5.3% increase
compared with 2008, of which catch of fish was 3,654,100 tonnes (5.3% increase), catch of
shrimp was 537,700 tonnes (7.2% increase).
127
Total production in shrimp farming in 2009 was estimated at 2,569,900 tonnes, which is a 4.2%
increase compared with the previous year. This high production was the result of continuous
efforts in expanding shrimp farming area. Fishermen also receive government support to build or
buy new high capacity boats, which help them to improve offshore fishery productivity. Apart
from that, fishery services are also improved, enabling increases in number of fishing boats and
length of fishing trips.

Manufacturing

The manufacturing sector was heavily affected when the export market was reduced.
Manufacturing value in January 2009 was 0.2% lower than the same time in 2008 (assessment
using the 1994 comparative prices). In the consequent months, growth rate was positive but
increasing slowly (only at 4.8% for the first half of the year). After efforts were made to
overcome challenges, growth rate was recovered at around 10% in the last few months of the
year. Total value of the manufacturing sector in 2009 was estimated at 696,600 billion VND, a
7.6% increase compared with 2008. The public sector achieved 3.7% growth rate, the private
sector 9.9%; foreign invested business sector 8,1%, oil and gas 9.2%, and all the others 8%.

High growth rate was seen in cities with large scale manufacturing sector such as Quang Ninh
(15.8%), Thanh Hoa (13.9%), Dong Nai (10.6%), Binh Duong (10.3%), Khanh Hoa (10%),
Hanoi (9.4%), Can Tho (9.1%), Da Nang (9.1%), Ho Chi Minh City (7.9%), and Hai Phong
(7.7%). Some provinces experienced low growth rate such as Hai Duong (6.2%), Phu Tho (5.3%),
Vinh Phuc (5%), and Ba Ria-Vung Tau (3.1%).

Service and tourism

When domestic production recovered and product prices and services stabilized, many enterprises
actively explored the domestic market. As the result, sales of retail goods and services were
boosted to a total value of 1,197,500 billion VND in 2009, an increase of 18.6% compared with
2008, or 11% if not considering the price factor.

In the total value of retail goods and services in 2009, one-person businesses accounted for
663,200 billion VND (20.3% increase), private sector accounted for 374,900 billion VND (22.9%
increase), public sector accounted for 116,300 billion VND (1.4% increase), foreign invested
businesses accounted for 31,300 billion VND (9.5% increase), and collective businesses
accounted for 11,800 billion VND (18.8% increase). Divided by business type, trading
contributed 939,600 billion VND (18.6% increase), hospitality contributed 135,000 billion VND
(20.3% increase), and tourism contributed 11,300 billion VND (1.9% increase).

Due to the economic downturn, only 3.8 million foreign tourists came to Vietnam in 2009, which
is 10.9% less than the previous year.

Transportation

Passenger transport in 2009 increased by 8.2%, which is an increase of 6.2% compared with 2008.
Land transport engaged 1,798.8 million passengers (8.6% increase), or 62.6 billion passengers-
kilometers (9.3% increase). Water transport engaged 162.5 million passengers (4.5% increase), or
3.3 billion passengers-kilometers (4.6% increase). Railway transport engaged 11 million
128
passengers (2.6% decrease), or 4.1 billion passengers-kilometers (7.9% decrease). Airway
transport engaged 11 million passengers (4.2% increase), or 16.5 passengers-kilometers (1.6%
decrease).

Good transportation in 2009 was estimated at 640.3 million tonnes (4.1% increase), or 184.5
billion tonnes-kilometers (8.6% increase), of which inbound good transportation accounted for
612.8 million tonnes (5.6% increase), and 63.9 billion tonnes-kilometers (5.3% increase), and
outbound good transportation accounted for 27.5 million tonnes (2.5% decrease), or 120.5 billion
tonnes-kilometers (9.6% increase). Good transportation by road was estimated at 470 million
tonnes (5.2% increase), or 23.3 billion tonnes-kilometers (8.2% increase compared with 2008).
Good transportation by river was estimated at 117.1 million tonnes (2.3% increase), or 18.7
billion tonnes-kilometers (2% increase). Good transportation by sea was estimated at 45 million
tonnes (1% decrease), or 138.3 billion tonnes-kilometers (10% increase). Good transportation by
railway was estimated at 8.1 million tonnes (4.9% decrease), or 3.8 billion tonnes-kilometers
(8.8% decrease).

Income and living standards

To achieve the goal of social security and welfare, the Government has focused on directing
agencies across various sectors at different levels to implement hunger and poverty eradication
programs such as the 134 Program, 135 Program, 30a Program, and many other national
programs targeting ethnic minority people and communes with “special difficulty”. Other on-
going efforts include issuance of free health care cards, reduction of medical care fee, and other
activities to support policy families and poor people. These programs and efforts have achieved
good results in improving people’s lives, especially for poor people and people living in remote
areas.

Although the floods in 2009 caused serious damages in the Central Highlands and the South
Central Coast, the pre-harvest hunger situation was significantly reduced. According to reports
from localities, there were 676,500 households (2,973,300 people) in hunger in 2009, which is a
decrease of 29.4% of households and 26.2% of people compared with the previous year. A large
proportion of households (people) in hunger mostly concentrated in the Northern mountainous
region and the middle land, Central Highlands, North Centre, and Central Coast.

The life of salaried employees was much improved by an increase of 20% of base salary.
Retirement pension also increased by 5%. Average monthly income of a civil servant in 2009 was
at 3,084,800 VND, which is a 14.2% increase compared with 2008. Average monthly income of a
civil servant working at central government level is 3,979,100 VND (16.1% increase), whilst a
civil servant working at local government level gets an average monthly income of 2,532,999
VND (13% increase).

Thanks to the right policies, as discussed above, agricultural productivity has improved. Food
prices have increased, which means more profit for farmers. Local enterprises were able to sustain
and develop their business. Life quality has improved, especially for people with low income or
rely on a salary. National poverty rate in 2009 was estimated at 12.3%, which is lower than the
2007 poverty rate of 14.8%, and the 2008 rate of 13.4%.

129
There are still unsolved issues related to resettlement. It is generally considered that resettlement
should at least not worsen the situation of the displaced people. In fact, the intention of
resettlement and compensation plans is to improve the living standard of the displaced people. Up
to now, resettlement in Viet Nam has been aiming at stabilizing people’s livelihoods in the short
term, with the hope that this would lead to subsequent development. The Ethnic Minority
Development Plan has been implemented to preserve cultural identity of ethnic groups, with
activities such as taking care of people’s wishes regarding handling graves and reconstructing
community traditional house. In terms of livelihood development, displaced people also receive
financial support to improve traditional crafts such as weaving and embroidering. Some
hydropower development projects have been successful in resettlement. One example is the Ban
Ve hydropower project, which displaced 2,103 households. These households have by now
stabilized and some good development has been seen in the community. However, experiences
show (Hoa Binh, Yali, Song Hinh) that in the long term, displaced people’s living standard has
not been improved. Rather, in many cases, the living standard has deteriorated, in particular when
it comes to access to land of good quality and to the cultural and psychological dimensions of
daily life such as opportunities to preserve and develop local traditions and habits and to take part
in decision- making related to the displaced people’s situation.

Resettlement issues of some hydropower development projects have become quite pressing as they
have significant impacts on people’s livelihoods.

Resettlement and unsettled issues

According to preliminary statistical collection, there are about 800 small and medium
hydropower development projects in Vietnam, of which 335 projects are located in the central
provinces. Hydropower plants contribute a large quantity of electricity for socio-economic
development needs. However, the resettlement component of these hydropower development
projects is not always done correctly, resulting negative environmental impacts.

For example, displaced people from reservoir area of the Ba Ha hydropower project in Phu Yen
did not have enough land in the new location. They had no choice but to rely on forest products
from the Krong Trai protected forest (Son Hoa, Phu Yen) and that is why this forest is severely
damaged. Only in 2008, there were 33 incidents of violation in Krong Trai forest in Suoi Trai
commune, resulting in 136 ha of forest loss.

Another example is the resettlement story of the A Vuong hydropower project in Dong Giang and
Nam Giang district of Quang Nam province. As the project investor did not fulfill their
commitments regarding compensation and resettlement, 357 displaced households (around 2,000
people) living in resettlement areas in Màcooih commune in Dong Giang and in Dang commune
in Tay Giang have been living in poverty for the last 5 years. A displaced person living in
Màcooih commune said: “We were given mainly rocky land for compensation, which is not
possible to grow crop. We have to deal with hunger but our biggest concern is landslide whenever
it rains heavily”.

To move people out of the site of A Vuong hydropower project, the Project Management Unit 3
built three resettlement areas in Pache-Palanh and Kurt-Chrun in MàCooih commune, Dong Giang
district, and in Alua in Tay Giang district. This was the starting point of a series of troubles and
130
challenges for displaced people.
Houses in these resettlement areas were designed to look like stilt house but built with bricks. The
main living quarter is around 42 m2, and supporting structures include a kitchen and a bathroom.
When a few people were brought to see their future homes, most of them were not happy. The
reason being all of the houses look the same and were built close to one another like in urban
area. This is something completely different to the way Cotu people live and work. Land for
cultivation is also too far away from where they live. Another problem was that the construction
works in the resettlement areas, such as sewages and reinforcing walls, were done shortly after the
site preparation, without taking in consideration the fact that the site foundation had not yet
stabilized. The consequences were serious erosion and landslide. Many houses were damaged or
completely destroyed. Many families became homeless – they either left and moved to the forest,
or constructed temporary cottages for themselves somewhere else.

People often think about their old villages with fertile rice paddies, which are now submerged in
the reservoir, with sadness and regrets over their decision to give up their land to the A Vuong
hydropower project. Their biggest challenge now is having no land for cultivation. Second to that,
their life has been turned up side down by the new housing arrangement in the resettlement areas,
which placed their houses one next to another like in urban area.

Quang Nam is one of the central provinces that plan and build many small and medium
hydropower projects. Some 50 hydropower projects that have started in Quang Nam displaced
1,739 households. The total area of land that has been taken for hydropower projects since 2000
in Quang Nam province is 11,589 ha. The issue of land for housing and cultivation for displaced
people as in the An Vuong hydropower project is currently a big challenge.

In the Central Highlands, according to specialists, 4,000 ha will be submerged by the time the
Plei Krong hydropower project is finished. A total of around 1,300 households or more than
6,000 people will be displaced. People from 9 communes in Sa Thay district, Dak Ha district,
Dak To district, and Kon Tum city were already heavily affected. Many households had to give
up their 3-4 ha of coffee plantation, which brought them an annual income of hundreds of million
VND. These losses were not adequately compensated by the project.

The A Luoi hydropower project started 3 years ago. To date, 913 affected households have not
received their compensation, and 179 other households have not been relocated. These
households are now in an extremely challenging situation where they have not received any
compensation and they had no land for cultivation for three years. They are not only worried
about having no food to eat, but also deeply concerned about their future. At the same time,
people who have been relocated by the project have their own issues such as the infrastructure
and housing quality within the resettlement area is inadequate or unsafe. The biggest concern is
that part of the resettlement area is planned on the bank of A Sap River, which is prone to
landslide due to the fact that this has been a popular gold mining area.

Hydropower development in the Central Region has put thousands of affected people in
challenging living situation. Local authorities have been planning on some post-resettlement
arrangement for these people but it is not easy to do. At the moment, Song Tranh 2 project investor
is asking to use 600 ha of protected forest to use as land compensation for displaced people.
131
According to Hydropower Project Management Unit 3, 320 households out of 1,046 households
affected by the Song Tranh 2 hydropower project from the two districts of Bac Tra My and Nam
Tra My are living inside the protected forest. Having their land taken away by the project, these
households had no choice but to turn forest into cultivation land in the last 3 years. Nearly 5 years
after relocating to the resettlement area of Song Tranh 2 hydropower project, many households
are still without land for cultivation or even for burying dead people. They also seriously lack of
domestic water supply. To date, 259 households still refuse to use land in resettlement area for
cultivation because they think that the land quality is bad. These households also refuse to take
money for compensation because they believe that the land price per unit that was used to
calculate the compensation value was too low.

The development of power projects is taking away production land from people. The current
compensation package is very close to the actual loss of affected people. However, giving money
compensation without a plan to support displaced people to re-establish their livelihood is not the
best solution as it might lead to other social issues.

Generally, displaced people, of which a great majority are ethnic groups other than Kinh, has had
difficulties in adapting to the new situation in the resettlement areas. This is not only due to the
fact that the resettled areas are alien to the newcomers, but also that the host people often is of
another ethnic group, that in-migration is attractive due to the ‘new frontier’ atmosphere, that new
agricultural plants and techniques are introduced, that the existing forest is not open for
exploitation, that the housing style and location is not according to the preferences of the
displaced people etc.

2.2.2.11. Community Health

Environmental pollution and employment pressure increase the risks of air related diseases such as
respiratory disease, pulmonary disease, and cardiovascular disease, etc. There are water related
diseases such as malaria and snail fever, which are caused by organisms living in the water
(mosquitoes and snails), and dysentery, cholera and hepatitis A, which are spread through
contaminated water. Occupational illnesses include deafness, loss of vision, blood pressure, etc.
Some diseases are more dangerous such as cancer, cardiovascular disease, and liver and kidney
failure, etc.

Illnesses reduce productivity and income. If someone in the family is ill, it not only costs money
but also has effects on the time and psychology of the sick person and other family members.
However, this issue has not yet received adequate attention and there is yet a mechanism that
requires people who are responsible for releasing pollutants to the environment to compensate for
health problems that these pollutants cause in the local community, or for affected people to
receive health care services or other support.

As health care services at local level are inadequate and health care workers are less qualified,
patients are often transferred to health care services at a higher level for diagnoses and treatments,
which often cost them more time and money.

2.2.2.12. Agriculture and Food Security

The agriculture sector uses 52% of the labor force, accounts for 6.3% of the government
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investment, and contributes 22.6% of the total export value of Vietnam in 2008. According to
current statistics, out of more than 33,105,000 ha of land, around 25,127 ha are for agriculture,
38.2% of which (or 9,599,00 ha) are cultivated land, and 58.7% are forest land. Land for
agriculture is not distributed evenly across regions. The Mekong Delta has 26.6% of cultivated
land and contributes 33% to the national total agricultural production. The Red River Delta has
8.3% of the cultivated land and contributes 17.6% to the national total agricultural production. At
the moment, Vietnam can provide enough food for domestic demand and export from 3-4 tonnes
of rice every year, making it currently the second biggest rice exporter in the world.

In the last two decades, urbanization happened very quickly, which reduced agricultural land
significantly. Statistics show that total land area for rice cultivation was only 4.1 million ha in
2007, which is 362,000 ha less than in 2005. It is predicted that by 2025, 10-15% of agricultural
land and land from other sources will be taken for industrial development. It means that total land
area for rice cultivation will be reduced to around 4 million ha in 2010, around 3.8 million ha in
2015, and around 3.6 million ha in 2020. After 2020, total rice cultivation area will be maintained
at around 3.5 million ha, of which 3.1 million ha will be for wet rice cultivation.

70% of Vietnam’s large population lives in rural area. The amount of agricultural land per capita
of Vietnam is amongst the lowest in the world. According to the Ministry of Agriculture and
Rural Development, to be able to supply for a population of 130 million people in the country in
2035, Vietnam needs to produce 36 million tonnes of rice, which means there will need to be at
least 3 million ha of land for rice cultivation which can handle two crops a year (or an equivalent
of total of 6 million ha of land for rice cultivation).

There is a difference between regional levels of food production. There are also factors such as
natural disaster, disease, and global climate change impacts such as rising sea level and loss of
production land etc. Vietnam is one of the countries that will be most affected by global climate
change. If sea level rises by 1 meter, the Red River Delta will loose 5,000 km2 of land, and
between 15.000 and 20.000 km2 of the Mekong River Delta will be under water. This this
happens, total agriculture of Vietnam will but cut down by 5 million tonnes. Agriculture activity
can be unpredictable due to bad crop yield, natural disaster such as flooding and pets, etc.
Therefore, food security is always an urgent matter that needs special attention.

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Chapter 3: Environmental Impact Forecast for PDP VII

3.1. The Relevancy of PDP VII to Environmental Protection Targets

The relevancy of PDP VII to environmental protection targets is evident in the proposed
scenarios as explained below:

Environmental Protection Policies and Relevancy of PDP VII to Environmental

Regulations Protection Targets
Vietnam’s Agenda 21 is a document that provides Basing on these viewpoints and directions for
direction for a long-term development strategy. The environmental protection, PDP VII harmonizes
viewpoints and objectives expressed in this economic development targets with
document constitute a legal framework that guide environmental protection targets:
activities by Ministries, departments, local
governments, organizations and individuals to shift - The development of PDP supports the national
Vietnam’s development towards the path of electricity system, which means support to the
sustainable development in the 21st century. socio-economic development, and the balance
between economic growth and sustainable
Within the current planning system, the Strategic environmental development.
Orientation for Sustainable Development in
Vietnam focuses on priority activities for the next - The electricity for rural areas program ensures
10 year development, as follows: that by 2020 a hundred percent of rural
households, including the ones in isolated and
Sustainable Economic Development Objectives remote areas as well as in the islands, have
access to electricity. The PDP VII is supported
- To maintain a rapid and sustainable economic
by local infrastructure development and
growth rate on the basis of increased productivity,
development of resettlement areas. It aims at
application of advanced science and technology, and
providing a better living standards and bringing
effective and efficient use of natural resources.
civilization to the people.
- To transform production and consumption patterns
- The PDP VII contributes to the development
towards environment-friendly direction.
of the power sector and creates more jobs.
- To implement the ‘clean industrialization’
- The PDP VII supports appropriate use of
mechanism.
natural resources in power production and
- To achieve sustainable agricultural and rural resource conservation for the long-term
development. development of all economic sectors. The plan is
to diversify power sources, including nuclear
- To achieve sustainable regional and local power. It also envisages the import of primary
development. energy and electricity.
Sustainable Social Development Objectives - The PDP VII incorporates energy saving in the
- To focus great efforts on hunger eradication, production and use of electricity.
poverty reduction, and job creation. - The PDP VII applies advanced technologies
- To continue to reduce the population growth rate (i.e. Circulating Fluidized Bed CFB,
supercritical and extreme supercritical
134
and the pressure of high population growth rate such technologies, coal gasification, etc., in energy
as unemployment. production; use of super high voltage cable in
power transmission) in power production,
- To manage the process of urbanization and
transmission and distribution.
migration to ensure reasonable regional distribution
of the population and the labor force, and - Environmental protection measures such as
sustainable environmental protection in local air pollution management systems (i.e. air
communities, starting from urban areas. filter, elimination of NOx and SO2 and
carbon dioxide mitigation via capture), waste
- To improve education quality in order to raise the
water treatment systems, reuse of coal waste,
average intellectual level, and professional skills and
power plant pollution control and
qualification in the population to meet the national
monitoring, etc., will be applied.
development needs.
- Hydropower development requires
- To increase the quantity and quality of health care
appropriate selection of location and power
services and to improve working conditions as well
plant capacity, minimal inundation and loss
as environmental sanitation conditions.
of forest, and appropriate water regulation
Sustainable environmental and natural resource infrastructure for integrated water
development objectives management.

- To use land resources in a sustainable manner to - Development of nuclear power and

stop land deterioration. renewable energy is encouraged for
‘cleaner’ energy production practices.
- To use mineral resources in an effective, efficient
and sustainable manner. - Transmission line development requires
appropriate planning to minimize impacts
- To protect and use water resources in a sustainable on biodiversity and forest area.
manner.
- PDP VII also commits to meet conservation
- To protect the marine and marine resources. and energy saving objectives by reducing
- To protect and develop forest areas. greenhouse gas emission, adjusting to
climate change and developing new and
- To reduce air pollution in urban areas and renewable energies.
industrial zones.

- To manage solid waste and toxic waste.

- To promote bio-diversity conservation.

- To implement measures in response to climate

change and mitigate its negative impacts for
better natural disaster prevention and control.

Law on Environmental Protection, the

Politburo’s Circular No. 36 - CT/TW and
Resolution No. 45 - NQ/TW (dated 15
November 2004) regarding environmental
protection in the period of industrialization and
135
modernization:

(1) To prevent and reduce environmental issues,

such as pollution, environmental degradation and
accidents, as the result of human behaviors and
natural impacts; to use natural resources in a
sustainable manner; and to promote biodiversity
conservation;
(2) To control the impacts of environmental
pollution, especially in areas of large population;
and to promote the recovery of bio-systems from
degradation in order to gradually achieve quality
improvement for the environment; and
(3) To build a healthy environment and to achieve a
balance between economic growth, social
improvement, welfare and environmental
protection for Vietnam where every citizen is
aware of the responsibility of protecting the
environment and living in harmonization with
nature.

Vietnam’s National Strategy for Environmental

Protection until 2010 and vision toward 2020 was
approved in 2003. The viewpoints and objectives
expressed in this strategy are as follows:

- The National Strategy for Environmental

Protection is an intergral part of the National
Socio-economic Development Strategy, and serves
as grounds for sustainable development of the
country. Environmental protection investment
means investment for sustainable development.

- Environmental protection must be the task of the

whole society, all levels of the authority, sectors,
organizations, communities and all citizens; as
environmental protection is national, regional and
global in its nature, it requires to bring into full
play the country’s internal strength combined with
the extension of international cooperation.

- Environmental protection is a constant and long

lasting work. Pollution prevention must be viewed
as the key solution in combination with pollution
control and treatment, remedy of degradation and
improvement of the environmental quality. The
136
implementation of these activities must aim at the
focal points and locations; and science and
technology must be viewed as effective tools for
environmental protection.

Vision toward 2020: To basically halt pollution

acceleration, remedy degraded areas and improve
the environment quality and ensure sustainable
development of the country be achieved; guarantee
that all the people are entitled to live in the
environment, landscapes and other environmental
components with the good quality of air, land, and
water measuring up to standards stipulated by the
State.

3.2. Assessment and Comparison of the Proposed Development Scenarios

Development scenarios proposed in PDP VII are based on energy demand forecast and aim at
providing sufficient supply and reserve. In order to achieve this, the two main areas of work of
power production, the purpose of which is to produce sufficient electricity for socio-economic
development and domestic needs, and power transmission need to be developed simultaneously.

Energy production relies on four sources, which are: (i) thermal energy from coal, oil and gas; (ii)
hydropower; (iii) nuclear power; and (iv) renewable energy. The national transmission grid use
220kv and 500kv cables.

On the basis of the environmental protection targets mentioned above and after considering the
un-sustainable development scenario in May 2010, the working group noted the following:

- Vietnam is expected to import fuels for electricity production after 2015. This scenario
also predicts that by Vietnam would need to import 79 % of coal for electricity production
by 2020 and 71 % by 2030 provided that coal extraction from the Red River reserve is
possible by then.

Table 3.1. Primary Energy Demand Increase in the period 2011-2030 according to
Base Scenario
Year 2011 2015 2020 2030
Coal (106 ton) 11.2 32 221.2 230.7
Domestic production 10.82 30 46.6 66.2
Import 0.38 2 174.6 164.5
Oil (103 ton) 776 468 79 93

Due to technical requirements, most thermal power plants are located near rivers or in coastal
areas where it is easy to get access to water and transportation. These are also highly
populated areas that offer favorable conditions for the development of other industries.
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Therefore, the development of thermal power plants put serious pressure on the environment,
as explained bellow:

- Coal-fired thermal power plants have negative impacts on air, water and soil quality in a
large scale such as acid rain or CO2 emission, which has a global impact.

- Thermal power impacts are contributing factors to climate change.

- Air pollution and wastewater (especially cooling water) from coal-fired thermal power
plants have serious health impacts.

- Coal-fired thermal power plants also use a large amount of limestone and chemicals such
as Urea and NH3.

- Large quantities of coal ash and other waste products from coal-fired thermal power
plants requires a large waste storage area of more than 8,000 ha while land resource is
limited.

It is evident from the above facts that the shortage of primary energy is a threat to national energy
security. Vietnam relies heavily on the international energy market while price for fossil fuel is
climbing and the fossil fuel supply in the world’s market is limited and changing at the same
time. Recently, many thermal power projects have been delayed due to the lack of fossil fuel
supply. Most recently, in March 2010, when Vietnam was urgently in need of power supply, the
Yunnan Power Grid Company, who was a power supplier for Vietnam, has stopped the operation
of both the 220kV Tan Kieu – Lao Cai and the 110kV Lao Cai – Ha Khau lines for maintenance.
This incident has put Vietnam in a very vulnerable situation when providing adequate energy
supply in the country was a struggle.

The SEA working group has discussed this situation with the PDP working group and proposed
to reduce the number of thermal power plants, which means reduced demand for coal, in the
power development plan. The PDP working group has considered this proposal and included
necessary changes in the PDP VII accordingly. In July 2010, the SEA working group received the
newly revised power plan development scenario. In this scenario, the expected amount of power
produced by thermal power plants although has been reduced in comparison with the first version
but is still at a desirable rate.

According to the newly revised scenario, no change was made to hydropower plant projects.
Most hydropower projects are in the implementation phase accordingly with the PDP VI. Some
projects are currently in the investment preparation period, such as the Dakmi 1, Dong Nai 5 and
Dong Nai 6.

The total number of thermal power projects remains as planned. There is an increase in the
number of gas-fired thermal power plants in the central and southern regions. According to the
plan, these gas-fired thermal power plants will use Liquefied Natural Gas (LNG) to be imported
to Vietnam as part of the regional power grid cooperation and other programs that will seek to
import LNG.

Also according to this scenario, power production using renewable energy will increase by 4%
and there will be three more nuclear power plants in the Centre. 138
The newly revised power development scenario was found to meet certain environmental targets
in key policy documents. This scenario was used for further analysis and assessment to form the
base scenario. A list of power plants, which are included in the power development base
scenario, is presented in Appendix 1 of this report. The main environmental impacts are
analyzed and evaluated in detail in the next section.

3.3. Environmental Impacts Forecast for the Proposed Development Plan

Vietnam is a country endowed with relatively abundant natural energy such as hydropower,
coal, oil and gas. This is an important basis for planning power development as well as meeting
the power demand, which is projected to increase rapidly in the future.
According to the forecast in the base scenario, energy demand in the period between 2011 and
2030 will increase to 110.215 MW. Energy supply is epected to come from the following energy
sources:

Table 3.2. The Power Supply Sources in the Period 2011-2030

Power resources Power Power Output to 2030 Plant average
capacity to capacity to (TWh) factor
2010 2030 (MW)
Hydropower + Pump 8,535 21,125 58.25 0.48
storage hydroeletrictcity
Small hydropower + 511 4,829 13.34 0.40
NLTT
Coal fired power 3,041 77,160 428.56 0.65
Gas power + oil 7,768 17,465 90.98 0.45
Nuclear power 10,700 56.53 0.76
Import 670 6,109 28,77 0.61
Total 20,525 110,215 695.15

Percentage allocation of energy sources in Table 3.2 is based on the development and
expansion plan which requires minimum cost in the PDP VII. The plan is to achieve optimal
results by combining power development projects using different energy sources with the
lowest Net Present Value (NPV) to meet the future power demand for the period up to 2030.
As presented in Appendix 1, the power development plan of Viet Nam to 2030 includes:

̶ 62 coal-fired thermal power plants with total capacity of 77,160 MW, including 31
projects in the North, 12 projects in the Center, and 19 projects in the South. There will
be 9 generators with total capacity of 1,000 MW. The locations for these generators are
still to be determined.
̶ 12 gas-fired thermal power plants with total capacity of 17,465 MW, including 3 new
projects in the Center and 7 new projects in the South of Vietnam.
̶ 7 oil-fired thermal power plants and oil-fired gas turbines.
̶ 79 hydropower projects with totall capacity of 21,125 MW, including 32 projects in the
North, 30 projects in the Center, and 17 projects in the South. All of these projects were
139
included PDP VI. PDP VII does not propose any new hydropower plant project.
̶ 23 small hydropower projects with total capacity of 2,729 MW. There will be 2,100
MW produced from new and renewable energy, including 200 MW in the North,
250MW (in 2015) to 800MW (in 2030) in the Center, and 1,100MW in the South.
̶ 5 nuclear power projects with total capacity of 10,700MW, including 1 project of
2x1,350 MW in the Center and 4 other projects in the South.
̶ 6,109 MW will be imported from Lao, Cambodia, China and Thailand

Primary energy demand in the base scenario is presented in the table below:

Table 3.3. Primary Energy Demand Increase in the Base Scenario in the period of 2011-2030
By year 2011 2015 2020 2025 2030
Coal (106 ton) 11.2 32 77.1 116.4 188.1
Domestic 10.82 30 46.6 62.7 66.2
Importing 0.38 2 30.5 53.8 121.9
Oil (103 ton) 776 468 79 115 93

Power production using new and renewable energy is projected to be at 4% for the period up to
2030. Although this figure satisfies the national targets and the Master Plan for Renewable
Energy Development in Vietnam (MPRED I), it is still under the targets of the Vietnam’s
National Energy Development Strategy up to 2020 with 2050 vision. The reasons for this lower
percentage are:

- Electricity produced from renewable energy (2,100 MW) and from small
hydropower plants (2,725 MW) will be primarily consumed in remote rural areas
where it is not possible to connect to the national grid.

- The pumped-storage plants (4,800 MW) are used during periods of high demand for
electricity. These plants use electricity from low-capacity power plants in the system
during periods of low demand for electricity, such as at nights, to pump the water
from the lower to the upper reservoir. These plants are used in special circumstances
because the energy they use is higher than the energy they can produce.

- Diesel and oil-fired power plants (1,347 MW) will be eliminated because they are not
cost-effective.

Investment costs for electricity generation in the power system structure will then increase. All
the details will be included in the calculations. However, the calculation of market price for
electricity in the base scenario has not included the cost of damages to the environment, the
economy and the society caused by the use of fossil fuel in electricity generation. Economic
analysis of PDP VII aims at identifying economic benefit and socio-economic efficiency of
investment to develop the electricity production and power grids to meet national commercial
demand for electricity during the period between 2011 and 2020 with vision to 2030. That is the
contribution of this master plan to GDP growth of Vietnam through creating jobs, promoting
socio-economic development in all parts of the country, building a civilized life with modern
industries, and ensuring national energy security, etc.
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According to the base scenario, the investment for infrastructure development to meet the
demand for electricity between now and 2030 is estimated to be 2,977,572 billion VND (not
including the cost of damages to the environment), which is about US$156.3 billion. Every year
from now until 2030, the electricity sector requires an investment of US$7.8 billion, of which a
relatively big amount of US$5.5 billion is for electricity generation.

Environmental impacts of power development projects are assessed and forecasted accordingly
with the base scenario provided in PDP VII. Different types of power generation have different
impacts on the environment depending on the project location, scale, source energy and
technology. The following section presents information about impacts of power production and
transmission lines:

Hydropower Impacts

Most environmental and social impacts of hydropower plant development have been taken into
account in the development plan through cost calculations for resettlement, inundation, loss of
forest, changes in river ecology, etc. Continuous impacts of most projects show to be very small
after the plant is built. Therefore, the assessment of environmental and social impacts of
hydropower development in PDP VII will focus on the impacts in the planning and construction
phase of hydropower plants. The environmental impact assessment in this part includes details
from the pilot Strategic Environmental Assessment of the Hydropower Master Plan in the Context
of the Power Development Plan VI by the ADB.

The range of adverse environmental and related social impacts that can result from hydropower
projects is remarkably diverse. While some impacts occur only during construction, the most
important impacts usually are due to the long-term existence and operation of the reservoirs.
Other significant impacts can result from complementary civil works such as access roads, power
transmission lines, and quarries and borrow pits.

With properly implemented mitigation measures, many of the negative environmental and related
social impacts of hydroelectric projects can be reduced to very acceptable levels. As will be
discussed later in this report, mitigation measures can effectively prevent, minimize, or
compensate for most adverse impacts, but only if they are properly implemented.

There are however, environmental impacts which occur at some hydropower projects that cannot
be fully mitigated. These include (i) irreversible biodiversity loss, if critical natural habitats not
occurring elsewhere are submerged (or left dry) by the dam; (ii) fish passage facilities frequently
cannot restore the pre-dam ecological balance of a river, in terms of species composition or fish
migrations; and (iii) some cultural property (including sacred sites) cannot be adequately
salvaged prior to reservoir inundation. Thus, because mitigation measures are often not fully
implemented, and are sometimes inherently inadequate, the single most important environmental
mitigation measure for a new hydropower project is good site selection, to ensure that the
proposed dam will be largely benign in the first place. In the following summary of potential
adverse environmental impacts and corresponding mitigation options, it is important to keep in
mind that the risks associated with all of these types of impacts can be reduced through good
project site selection.

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Thermal Power Impacts

The generation of electricity through the combustion of fossil fuels (mainly coal but also gas and
oil) constitutes the largest element of the planned expansion in generating capacity in PDP VII and
will consequently represent the largest source of environmental impacts. Apart from impacts of
resettlement and impacts on the water resources, the main form of impacts from thermal power is
from the three categories of atmospheric pollution impacts: (i) climate change impacts resulting
from greenhouse gas emissions; (ii) acidification of soils and water caused by gaseous pollutants;
and (iii) human health impacts from both gaseous pollutants and particulate matter releases.

Nuclear Power Impacts

Plans to increase the power of the base scenario proposed in PDP VII is mainly development of
new projects in Vietnam, which includes plans to build three nuclear power plants in next decades.
This is a new set of issues that should be assessed in the SEA because nuclear power plants
typically generate many different types of risk: if nuclear power plants are deployed in accordance
with international regulations (thus can be applied to forecast for Vietnam), although the risk level
is very low, but its happens will cause unpredictable effects. Experience shows that, the impacts
from this type of power production occurs mostly due to risks than predicted impact could be as
prevalent in other forms of electricity production, for example, CO2 emissions from coal-fired
power plants or loss of land to build hydroelectric dams.

Results of the SEA study for the location planning project of nuclear power plants in Vietnam
that was done in 2009 reveal a fairly complete list of potential problems related to the nuclear
power projects. This is a comprehensive exercise that has been made about the limits of the
uncertainty inherent in developing nuclear power plants. In this SEA report, two types of
potential impacts are identified accurately: (i) radiation and other effects related to the food chain
(in Vietnam, there are only 2 steps involved in this effect, those are processes of production and
disposal of radioactive waste), (ii) the effects of radiation and other possible nuclear accident (as
already noted, the probability of risks are generally low but the impact is often specially serious
as happened at Three Mile Island and Chernobyl cases).
There are some specific effects that can be expected from the development of nuclear power, the
group of these effects are similar to the one of other power projects. These effects are divided into
categories in the SEA and they should be taken into consideration in calculating the period of
deployment of nuclear power projects.
Renewable Energy Impacts

The advantage of renewable energy projects is that they are environment-friendly as: (1)
Renewable energy projects help to reduce the consumption of fossil fuels in electricity generation,
which means reduced gaseous emissions, including greenhouse gases (CO2), and other acid rain
causing emissions such as SOx and NOx. The use of renewable energy represents opportunities for
pursuing Clean Development Mechanism (CDM) and participating in the active international
market for greenhouse gas; and (2) Renewable energy projects help to reduce air pollution caused
by odors, CH4, disease vectors and from landfills, land area required for landfills, and cost of
waste treatment (in case of power generation using biomass).
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The base case of PDP VII contains only a small expansion in renewable energy generation sources
and in general renewable sources of power generation produce very few negative social and
environmental impacts and the low level of expansion of these power sources in PDP VII means
that the total impact of renewable energy power generation will be minimal. The main concerns,
where they exist, are usually closely associated with the characteristics of individual sites and
renewable energy has few, if any, wider negative impacts on the natural environment or people
outside of the immediate location where the facilities are constructed. There are issues that have to
be taken into consideration during the planning and construction of renewable energy facilities:
especially larger ones where several individual turbines or other pieces of power generation
infrastructure are sited together. The plans for increased generation capacity contained in PDP VII
do not as yet specify the precise location of these facilities: this will be decided at a late stage. It is
consequently not possible to assess with any accuracy the potential site-specific impacts of
renewable energy development as contained in the PDP VII base case.

The use of renewable energy sources such as solar and wind energy does not require fuel,
therefore, it does not produce waste. However, there are a few issues of concern as follows:

Wind power can cause some noise pollution for people living in the immediate vicinity of the
turbines and, if sited insensitively, the tall turbines are considered by some to have negative
aesthetic impacts (especially where they are located in areas of outstanding natural beauty).
Others consider them to be aesthetically pleasing, however, and certainly wind farms have become
a tourist attraction in many countries. The consultation and consent of local residents is essential
(and is in any case a normal part of infrastructure planning) and some appropriate compensation
should be agreed for any noise impacts or loss of amenity. The effect of large turbines on
migratory birds can also be a concern where they are directly in their flight path and site selection
should avoid the roosting locations or main flight paths of important bird species.

Solar power generation through photovoltaic cells is only a potential concern where the generation
is concentrated on large ‘farms’, and in these cases it related directly to the characteristics of the
site and the vegetation cleared for the solar farms. This should not be an issue in Viet Nam so
long as the site selection avoids sites of any ecological significance: an issue to be determined in
the detailed planning of such facilities. There are few, if any, other social and environmental
issues to be concerned with for solar power generation.

Comparison of the environmental impacts of fossil fuel, hydropower and renewable energy is
shown in table below:

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Table 3.4. Comparison of Environmental Impacts of Fossil Fuel, Hydropower and Renewable
Energy

Main environmental impact

Type of energy CO2cq SOx NOx Impact on forest and
Dust climate change
(Greenhouse (Acid rain) (Acid rain)
gas emission)
Coal X x x x
Fossil Oil X x x Marginal
fuel

Big - - - - Loss of forest

impact
Solar - - - - -
Wind - - - - -
Renew-
Biomass Neutral Marginal Not considerable - Promoting forest
able
plantation
energy
Small Marginal
impact
Geothermal Marginal
heat

Despite having more positive impacts, renewable energy projects, such as small hyrdropower,
biomass, solar, wind and geothermal energy projects, also have some negative impacts on the
environment. The strategic environmental assessment of the Master Plan for Renewable Energy
Development in Vietnam to 2010 with 2025 Vision by the Energy Institute in 2010 provides
forecast and assessment of negative environmental impacts of various types of renewable energy.

Renewable energy projects, including solar, wind and biomass projects, create waste during
energy production and storage, which has several impacts on the environment:

- Similar to fossil fuel-fired thermal power production, combustion and gasification of biomass in
power production emits CO2, which is one of the greenhouse gases, and NOx and SOx, which
cause acid rain, only at a lower level for the following reasons: (i) the amount CO2 that biomass
captures when growing balances out the amount of CO2 emitted during the production process;
(ii) the proportion of sulfur (S) in biomass is very low and zero in many cases, such as in bagasse
and rice husk; (iii) some solid and liquid waste from biomass-fired thermal power plants, such as
husk ash or waste from underground composting tanks, is not harmful and can bring high
economic value if reused as fertilizer.

- Wind power projects do not produce waste or gas emissions but have other effects such as
noise, visibility and other aesthetic effects to nearby residents and landscape.
- Batteries used for storing energy from solar or wind power projects need to be handled and
burried like toxic waste.
- Large scale solar or wind power projects usually take up large areas of land.

The table below presents a summary of the types of waste produced during the construction and
operation of renewable energy projects in the PDP VII and the associated environmental impacts.
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Table 3.5. Environmental Impacts of Waste from Renewable Energy Projects
Renewable Energy Process Type of Waste
Impact (Positive/Negative)
1. Biomass
+ Direct combustion Power CO2 Neutral CO2 balance
for power generation production SOx Nearly zero because of the small sulfur
proportion (0,1-0,05%)
NOx Acid rain of not significant amount because the
combustion temperature is low
Ash nhiệt độ
Solid thấp(husk ash – which can bring high
waste
economic value if reused)
2. Biogas
Power production Liquid waste Replacing chemical fertilizer as high quality,
eco-friendly fertilizer

Solid waste Used in production of eco-friendly micro-

nuitrition fertilizer

3. Solar
Power storage Waste battery - Increased demand for land but not
significant.
- Changes to landscape and architectural
setting but not significant.
- Impacts on soil and water resources if
waste management not done properly
4. Wind
Power storage Waste battery - Impacts on soil and water resources.
- Changes to landscape and architectural
setting but not significant.
- Noise, visibility.
5. Small hydropower, geothermal
Power None - Sendimentation and erosion at lower river
production basin.
- Dry lakes.
- Disruption to fish migration, affecting
biodiversity.
- Impacts on water use for other purposes

Overall, renewable energy has more positive impacts on the environment. However, it is not easy
to quantify these impact values into the cost structure. The issue is, despite all the positive
impacts, renewable energy is not well developed both in Vietnam and internationally. Studies
show that the initial investment for renewable energy is too high. Analysis in the chosen scenario
for renewable energy provides investment figures for each type of renewable energy as follows:

Development of a grid connected renewable energy system needs a total investment of 74,019
billion VND for the whole period (2009-2025), which means an average of 4,354 billion VND
per year.

Development of independent (not connected to the grid) renewable energy systems needs a total
investment of 20,391 billion VND. This investment should come from the state budget because
145
the government is expected to invest in power development for remote areas to meet the target of
100% of the households have access to electricity by 2020.

Development of renewable energy for heating needs a total development of 42,140 billion VND
for the whole period (2009-2025). This investment is for households to buy and install equipment.
The investment provided to each household should be just enough to levarage their own
investment, to create a movement in using renewable energy in the communities, and to develop a
market for renewable energy.

The total investment for the development of reneawable energy between 2009 and 2015 is 53,439
billion VND, which equals an average of 3,143 billion VND per year. Fifty percent of the
total investment, which equals 31,191 billion VND for the whole period or 1,834 VND per
year, is for the development of grid connected renewable energy systems. Thirty eight percent
of the total investment, which equals 20,391 billion VND for the whole period or 1,199 billion
VND per year, is for the development of independent renewable energy system. Four percent
of the total investment, which equals 1,857 billion VND for the whole period or 109.2 billion
VND per year, is for the development of renewable energy for heating.

The total investment for the development of renewable energy is not high. It only accounts for a
small percentage of the total investment for national power development for the whole period of
2009-2025.

Transmission Lines: Social and Environmental Impacts

PDP VII contains plans for the significant improvement and extension of the transmission grid
across the country. These investments are essential for the continued development and
improvement of Viet Nam’s power supply system, but their construction, and the associated land
clearance, will have some significant social, environmental and economic impacts. These have
been calculated based on the following information, processed through the use of GIS analysis
with support from the ADB:

• The tracts of the planned new transmission lines, both 220kv and 500kv, derived from maps
provided by the SEA working group and digitized for analysis in the GIS.
• The calculation of the area of forest cleared and the level of fragmentation of both protected
areas and key biodiversity areas during the construction of the new lines. This calculation is
based on the Transmission Line Regulations issued with Decree 106/2005/NĐ-CP dated 17
August 2005 and instructions in the Law on Power Grid Safety Corridors, which specify a
45 meter clearance track for 500kV lines and 25 meter clearance track for 220kV lines.
• The assessment of the economic value of the forest cover lost to the transmission line tracts,
based on valuation data from the Forest Science Institute of Viet Nam.
• The identification of areas of critical biodiversity sensitivity that will be affected by the
transmission lines where special remedial measures need to be taken.

The followings are detailed assessment of main environmental impacts of different types
of power development in the base scenario:

3.3.1. Loss of Forest and Biodiversity

146
Loss of forest and biodiversity in power development is mainly caused by hydropower and
transmission line development. The heaviest consequences are loss of forest and habitat
fragmentation that lead to serious impacts on the ecology and biodiversity. These impacts are
mostly impossible to fully avoided or mitigated. The sections below provide a detailed
analysis of these impacts.

3.3.1.1. Hydropower Impacts on Forest and Biodiversity Resources

The assessment of impacts from hydropower is based on the SEA of hydropower in PDP VI
executed in 2008-2009. Where necessary, the information from this SEA has been updated and
extended to reflect changes in PDP VII and new national regulations on issues such as payments
for environmental services.

Main assessment indicators are: (i) irreversible biodiversity loss, if critical natural habitats not
occurring elsewhere are submerged (or left dry) by the dam; (ii) fish passage facilities frequently
cannot restore the pre-dam ecological balance of a river, in terms of species composition or fish
migrations. Because mitigation measures are often not fully implemented, and are sometimes
inherently inadequate, the single most important environmental mitigation measure for a new
hydropower project is good site selection.

Flooding of Natural Habitats

Some reservoirs permanently flood extensive natural habitats, with local and even global
extinctions of animal and plant species. Very large hydropower reservoirs in the tropics are
especially likely to cause species extinctions (although such losses are only infrequently
documented due to the lack of scientific data).

Particularly hard-hit are riverine forests and other riparian ecosystems, which naturally occur only
along rivers and streams. From a biodiversity conservation standpoint, the terrestrial natural
habitats lost to flooding are usually much more valuable than the aquatic habitats created by the
reservoir. One occasional exception to this rule is that shallow reservoirs in dry zones can provide
a permanent oasis, sometimes important for migratory waterfowl and other terrestrial and aquatic
fauna.

This issue has not been well researched in Vietnam but studies of the dams in coastal areas of
North America along the Atlantic and Pacific ocean show that they block the upriver migration
passage of wild salmon although most of these dams provide fish ladders. This results in a
decreasing number of wild salmon. The young salmon also find it hard to migrate to sea because
they have to swim through the turbines. In some areas, people have to transport young salmon to
sea in certain periods of the year.

There are other issues concerning water quality after running through the turbines such as changes
in oxygen sublubility and water temperature. These changes affect aquatic fauna, especially
indigenous species.
The Lost Life Environment of Desolate Animal

The loss of terrestrial wildlife to drowning during reservoir filling is an inherent consequence of
147
the flooding of terrestrial natural habitats, although often treated as a separate impact. Instead of
drowning, the captured and relocated animals typically starve, are killed by competitors or
predators, or fail to reproduce successfully, due to the limited carrying capacity of their new
habitats. Wildlife rescue is most likely to be justified on conservation grounds if (a) the species
rescued are globally threatened with extinction and (b) the relocation habitat is ecologically
suitable and effectively protected.

Although they may be useful for public relations purposes, wildlife rescue efforts rarely succeed
in restoring wild populations. However, the money spent on rescue would usually do much more
for wildlife conservation if it were invested in compensatory protected areas. The most effective
way to minimize wildlife mortality in hydropower projects is to choose dam sites which minimize
the wildlife habitat flooded.

Environmental Impacts are assessed through the analysis of two issues: (i) the resource value
of natural resources, valuing where possible both the inherent value of the resource and the cost
of mitigation measures to ameliorate any negative impacts; and (ii) the inherent biodiversity
value of the ecosystems that are at risk of being affected by hydropower development. The
biodiversity assets are not given either quantitative (e.g. number of species affected) or economic
values: the data does not exist to make this possible within the scope of the present study. Instead,
an assessment is made of the level of potential risk of loss of biodiversity values.

This in turn is related to the proportion of particular ecosystems that fall within the zones of
influence and the presence in these ecosystems of animals, plants or habitats of particular
biodiversity significance. A detailed map of special ecosystems and conservation areas is
provided in Appendix 1.

The proportion of ecosystems in the zones is assessed through the GIS analysis in relation to two
(related) areas: Protected Areas (Pas): that is, areas designated under Vietnamese regulations as
being subject to particular types of protection such as Special Use Forests and Key Biodiversity
Areas (KBAs).

Fish and Other Aquatic Life

Hydropower projects often have major effects on fish and other aquatic life. Reservoirs positively
affect certain fish species (and fisheries) by increasing the area of available aquatic habitat.
However, the net impacts are often negative because (a) the dam blocks upriver fish migrations
and affects downstream passage; (b) many river-adapted fish and other aquatic species cannot
survive in artificial lakes; (c) changes in downstream flow patterns adversely affect many species,
and (d) water quality deterioration in or downstream of reservoirs kills fish and damages aquatic
habitats. Freshwater molluscs, crustaceans, and other benthic organisms are even more sensitive
to these changes than most fish species, due to their limited mobility. Management of water
releases may be needed for the survival of certain fish species, in and downstream of the
reservoir.

Fish passage facilities (fish ladders, elevators, or trap-and-truck operations) are intended to help
migratory fish move upstream past a dam but are usually of limited effectiveness. Fish hatcheries
can be useful for maintaining populations of native species which can survive but not
148
successfully reproduce within the reservoir. They are also often used for stocking the reservoir
with economically desired species, although introducing non-native fish is often devastating to
native species and not ecologically desirable. Fishing regulation is often essential to maintain
viable populations of commercially valuable species, especially in the waters immediately
downstream of a dam where migratory fish species concentrate in high numbers and are
unnaturally easy to catch.

Floating Aquatic Vegetation

Floating aquatic vegetation can rapidly proliferate in eutrophic reservoirs, causing problems such
as (a) degraded habitat for most species of fish and other aquatic life, (b) improved breeding
grounds for mosquitoes and other nuisance species and disease vectors, (c) impeded navigation
and swimming, (d) clogging of electro-mechanical equipment at dams, and (e) increased water
loss from some reservoirs.
Pollution control and pre-impoundment selective forest clearing will make reservoirs less
conducive to aquatic weed growth. Physical removal or containment of floating aquatic weeds is
effective but imposes a high and recurrent expense for large reservoirs. Where compatible with
other objectives (power generation, fish survival, etc.), occasional drawdown of reservoir water
levels may be used to kill aquatic weeds. Chemical poisoning of weeds or related insect pests
requires much environmental caution and is usually best avoided.
Impacts on forest resources: The assessment of risk and impacts took place at three scales: for
the reservoir area, for a “Zone of Influence” (ZoI) surrounding each dam site and for the wider
area beyond this zone (within 20km radius). GIS analysis was used to calculate land area and
forest affected by large and medium sized hydropower projects in PDP VII. These projects are
either in construction or investment preparation phse. The table below provides more details
about these projects.

149
Dam and lake (ha)

Total land area

Upper Kon Tum
Song Bung 2

Song Bung 4

Song Bung 5
Huoi Quang

Vinh Son II
A Luoi-Not

Dong Nai 2

Dong Nai 5

Khe Bo Lai
Chau Nam

Trung Son
Hoi Xuan
Dak Mi 1
Dak Mi 4
Ban Chat

Srepok 4
Na Nho
Bac Me

Hua Na

Que 3
Forest area in Zone of
Natural forest managed
Influence 15, 24,7 2,95 38, 18, 5,7 17, 4,0 14, 9,1 1,0 37,0 6,82 3,1 26, 17, 4,5 4,4 18, 49,3 14, 321,1
for timber 862 09 4 988 191 04 713 08 387 33 66 46 9 93 302 088 40 93 890 65 497 08

1,2 28,0 16,9 7,0 4,5 11, 1,6 8,6 10, 2,7 67,7 18,8 5,7 2,8 40 2,6 4,1 30,4 4,3 213,8
Immature/regenerating forest 14 71 32 78 919 75 917 00 48 521 45 98 99 55 92 774 7 18 46 26 05 87
Natural forest
Vegetation 1,64 2,4 18, 14, 1,4 9,6 4,2 3,99 1,0 39, 7,5 4,01 109,1
Grassland/shrubland/rocky 0 5 106 03 0 300 910 26 17 348 08 3 0 37 62 120 0 734 05 7 0 97
mountain
1,2 1,80 6,2 1,1 7,9 1,5 4,33 2,86 32 8,5 2,73 37,38
Perennial cropland 85 321 0 26 55 453 132 32 620 476 47 5 9 221 0 0 9 12 42 7 865 4

13, 70,4 62,0 20, 17, 5,2 1,4 13, 8,2 49, 13, 167, 73,6 62, 24, 5,8 1,1 8,3 25, 18,9 13, 609,0
619 65 24 463 843 80 11 857 03 829 177 092 42 055 562 61 06 09 908 14 257 82
Annual cropland
5,6 3,2 10,78
0 244 35 392 0 0 17 0 0 11 320 0 0 0 0 0 0 39 0 711 218 6
Other land
7,54 2,60 5,4 4,4 33, 5,9 1,9 10, 2,9 19,8 9,04 10, 4,0 1,5 2,0 15, 8,4 3,42 143,6
0 5 2 63 27 323 33 24 899 417 89 83 4 054 25 98 94 280 02 2 834 59
Wetland and water surface
4,63 21,8 1,1 1,1 5,0 1,00 1,6 2,2 36,77
0 7 38 317 0 69 489 63 71 43 103 8 667 862 168 0 0 88 72 364 312 9

1,01 1,03 1,2 2,40 1,3 43 1,0 12,43

0 0 1 148 0 0 172 958 339 01 636 9 924 42 0 9 3 40 859 269 929 3
Total land area in 31, 139, 109, 81, 42, 67, 58, 32, 43, 86, 26, 303, 112, 83, 59, 25, 8,9 76, 76, 110, 35,
zone of influence 981 484 336 486 536 704 295 868 886 997 790 565 874 520 012 489 09 413 716 240 226
0 837 15 7 0 0 2 0 2 19 0 0 0 0 0 39 0 0 192 14 10 1,130

1,494,
315

148
Reservoir area: assessment includes recently completed projects and projects that are either under
construction or will soon be under construction. The total area that will be submerged in the 21
schemes is 25,133 ha, including 4,227 ha of natural forests, 1,367 ha of plantations, 5,961 ha of
agricultural land, 737 ha of residential land and 12,810 ha of grasslands, bare land and other non-
productive land.

Total forest value lost, including timber value lost and payment for environmental services, is
estimated at about 72.4 million US dollars. The basis for this estimation is the value of each type
of forest specified in an assessment of forest classification by the Vietnam Forest Science
Institute. Detailed calculations of the value loss of each hydropower project are included in
Appendix 2.

The main risks have been assessed as being where increased population and reduced forest
resources would result in unsustainable pressure on remaining forests. The main risks have been
assessed as being where increased population, urbanization, road development and reduced forest
resources would result in increased pressure on remaining forests. The risk of unsustainable
pressure is assessed using existing data through a combination of per capita forest area and the
significance of forest products in local livelihoods. The analysis suggests that 11 schemes have a
risk of unsustainable pressure on forests, with the risk being severe in 4 schemes (see Appendix
2). It is also obvious that impacts and risks of a single project are a lot lower than a series of
projects in the same area.

Environmental risks in the ZoI are assessed in relation to three factors: changes to forest area and
quality, impacts on river ecosystems and biodiversity impacts. The first two factors are estimated
in relation to resource values, using valuation studies and estimates of the roles of forests and
rivers in local livelihoods.

The biodiversity impacts are assessed in relation to two main variables: the existence of
endangered and/or indigenous species in the ZoI and the proportion of Key Biodiversity Areas or
Protected Areas that fall within the different ZoI. The analysis suggests that there are 10 sites
where the risk of damage to biodiversity resources is significant, with a recommendation for the
establishment of protected areas where they do not exist and the preparation of a biodiversity
action plan as part of the planning of these schemes.

In certain cases, these potential impacts on areas of great biodiversity significance are such that
serious consideration should be given on whether to continue to develop the scheme. For
examples: (1) the construction of A Vuong hydropower project resulted in 943 ha of old forest
lost to the reservoir area; (2) the proposed development of Dak Mi 1 hydropower scheme would
impact upon over 23,000 ha (48% of the total area) of Ngoc Linh, a key biodiversity area of
international significance. This area contains large areas of intact evergreen forests of great value
and is the habitat of tigers, deer, muntjacs and rare endemic birds; (3) the Dong Nai hydropower
scheme will impact over 19,000 ha of Cat Tien protected area, an area also subject to potential
fragmentation from transmission lines. Cat Tien again has unique and international biodiversity
significance, being the home of the lesser one-horned rhinoceros, the Asian elephant, Siamese
crocodile and many rare bird species; (4) the Upper Kon Tum and Sre pok 4 hydropwer project
will also have high level of impact on biodiversity. Upper Kon Tum will affect 62,446 ha of Kon
Plong national park and Sre pok 4 will affect 20,472 ha of Chu M’lanh – Yok Don national park
151
and 7,446 ha of Cu Jut forest. The cancellation of these schemes with great biodiversity impacts
should be given serious consideration where their development has not already commenced.

Further studies show that small hydropower projects have big impacts on forest ecology systems.
There have not been detailed research and statistics about the area of forest lost to one specific type
of power development, such as hydropower development, in Vietnam. However, opinions voiced
by a number of experts and local administrators that “investors only set up hydropower projects so
that they have access to logging” ring an alarming bell. These small hydropower projects are
usually in sensitive areas of high biodiversity significance.

According to statictics from the Quang Nam provincial Department of Environment and Natural
Resources, four new hydropower projects have just been implemented that resulted in the loss of
4,000 ha of forest and another 6,000 ha was logged for infrastructure and transmission line
development. If all the hydropower projects that have been approved in Quang Nam are
implemented the impacts will be immesurable. Below are some examples of forest areas lost to
small hydropower projects:

Ha Nang hydropower project of 11 MW station capacity is located in Tra Bong district. The
construction of the reservoir of this project will result in the loss of 36.15 ha of natural forest.

Dak Ru hydropower project of only 7.5 MW station capacity resulted in the loss of hundreds of
hectares of forest on the sides of the Dak Ru Stream, which were logged during the construction
of a dam and a canal system of more than 5 km long. The investor of this project used the fact
that Dak Ru is a small stream with small water flow to justify this construction.

Dak Po Ko hydropower project (in Tan Canh and Po Ko commune, Dak To district, Kontum
province) has a capacity of 15 MW. The reservoir filling will destroy 117.2 ha of natural forest,
agricultural and industrial crops.

Forest clearing for hydropower projects is still happening although it is stated in the regulation that
the area of forest lost to a hydropower project needs to be re-planted in another area of comparable
size.

Cost of Damages to Forest and Biodiversity

Cost of damages to forest and biodiversity is calculated for all projects that remain in the plan.
This cost is actually the cost of operating community-based forest management schemes as a
mitigation measure. The cost to implement this mitigation measure for 11 projects in the plan
(see list of projects in Appendix 3) is calculated based on a new government decree (Decree
99/2010/ND-CP dated 24 September 2010 regarding payment for environmental services). This
new national decree decree will apply a charge of 20 VND/kWh to act as a payment for
environmental services in the watershed of hydropower schemes in relation to soil conservation
and water regulation.

These charges reflect environmental services that have to date been treated as externalities. This
will not be the case in future and such charges, which will provide incentives for upstream
resource owners to manage their lands sustainably, need to be reflected in the assessment of the
costs and benefits of hydropower development. The charge levels have been applied to the
152
planned generation levels from hydropower for each year of the PDP VII period (2011 to 2030).
The levels of PES income generated are significant: starting at US$ 41,182,000 in 2011 and rising
rapidly over the next decade (during which there will be significant expansion of hydropower
generating capacity) to reach US$ 71,152,000 by 2021 and more-or-less stabilizing thereafter to be
US$71,535,000 in 2030 (see detailed calculation in Appendix 2). This represents a cost to the
power sector, which will presumably be passed on to consumers in the tariff structure, but a major
development benefit to the upstream forest resource owners, who are often poor, often ethnic
minorities and almost invariably living in remote locations where opportunities for cash income
are restricted. That an additional $40-70 million dollars a year will be passed on to these
communities from the PES charges to the hydropower sector is a significant cost to hydropower
(as a former externality that is now internalized by national decree) but a positive development
benefit to the population of the areas in which the dams are constructed and operated.

Figure 3.1. Inundation & Zone of Influence Figure 3.2. Inundation & Zone of Influence
Dong Nai 2 Hydropower Projects in Central Vietnam

153
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Figure
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$

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154
Figure 3.4. HPP with High Risk of Significant Biodiversity Impacts

153
3.3.1.2. Thermal Power and Nuclear Power Impacts on Forest and Biodiversity Resources

Thermal power plants usually do not have many direct impacts on forest and biodiversity
resources. However, most big thermal power plants are located near rivers and in coastal areas.
Thermal power stations require very large quantities of cooling water for their thermal powers,
with temperature increases of 7-8oC when the water are released. The main impacts are the
effects of temperature change to river ecology or seawater along the coast through the decrease of
oxygen, changes in the habitat of aquatic species that leads to ecological imbalance in the basin,
or most seriously loss of rare and valueable aquatic species due to sudden changes in the habitat.

The operation of thermal power plants can have significant impacts on the surrounding
environment. These impacts are variable and site-specific in most cases. For example, the Van
Phong 1 coal-fired plant is planned for construction near the Van Phong gulf, an area of high
biodiversity value that includes the habitat of two critically endangered species listed in the Red
Book and seven reptile species that are potentially endangered. Similarly, the Mong Duong 2
coal-fired power station will affect 3.3 ha of mangroves and is likely to affect valuable marine
habitats, including habitats of seahorses and other rare species. Similar site-specific impacts were
recorded in several cases. In many other cases, no such local environmental impacts were
detected.

These local environmental impacts are often associated with the effects of cooling water. Thermal
power stations require very large quantities of waters for their cooling towers, with temperature
increases of several degrees when the waters are released. According to the forecast figures for
the period between 2011 and 2015, power productivity will increase to 15, 365MW in 2015, to
32,385 MW in 2020 and to 77,160 MW in 2030. As the required amount of cooling water for
1MW is at about 100-120m3/h, the total demand for cooling water is estimated as follows:

Between 2011 and 2015: 100 – 120 m3/h x 15,365 MW = 1,536,500 – 1,843,800 m3/h
Between 2016 and 2020: 100 – 120 m3/h x 32,385 MW = 3,238,500 – 3,886,200 m3/h.
By 2030: 100 – 120 m3/h x 77,160MW = 7,716,000 – 9,259,200m3/h

Particular care needs to be taken when planning and selecting the site of thermal power plants to
(a) ensure that the quantities of water used will not disrupt local hydrological conditions and (b)
avoid locations where cooling waters will be released close to or affecting areas of high
ecological and biodiversity value or sensitivity: especially areas such as mangroves and coral
reefs that are extremely sensitive to water temperature changes. The coastal location of many
thermal power plants means that this is a particularly sensitive issue: something reflected in a
number of the EIA reports that were examined.
It is necessary to assess the cumulative effects of cooling water of several power stations located
near each other or in one river basin in the process of detailed planning and designing each power
station. This should be done within the framework of river basin planning which is proposed to
most river basins in Vietnam.

According to statistics, cooling water from big power stations (capacity of about 2,400 MW),
increases temperature of sea water within 10 km2 from the coast by 1oC, and within 5 km2 from
154
the coast by 2oC. The size of affected area varies depending on the station capacity, the weather,
and seasonal and tidal conditions. The scale and level of environmental impacts of each thermal
power project will be assessed during the project implementation phase in the environmental
impact assessment to be executed by the thermal power plants.
Nuclear power uses extremely high levels of cooling water. The physical separation of these
cooling waters from any radioactive materials means that there is unlikely to be any radioactive
contamination unless an accident occurs, but the high volume of water used
(70m3/second/generation unit) and the high temperature increase (typically around 7oC) means
that potential local environmental impacts on wetlands, coral reefs, sea grass beds, mangroves,
spawning grounds, etc., can be significant.

3.3.1.3. Transmission Line Impacts on Forest and Biodiversity Resources

The calculation of forest area and area of high biodiversity significance affected by the
development of new transmission lines was done using GIS. This calculation was based on the
Transmission Line Regulation issued with Decree 106/2005/ND-CP dated 17 August 2005 and
instructions of the Law on Power Grid Safety Corridors, which specify a 45 meter clearance track
for 500kV lines and a 25 meter clearance track for 220kV lines.

The results show that 14,103 ha of forest will be cleared for the construction of the new
transmission lines, with over 9,149 ha cleared for the 500kv lines and 4,954 ha cleared for the
220kv lines. The quality and value of these forests varies greatly, both in their inherent value and
in the level of human interference. The areas to be cleared have been grouped into four categories
as defined by Forest Science Institute: rich, average, poor and regenerating forests. The area to be
cleared includes 7,739 ha of rich forest, 2,542 ha of medium forest, 1,445 ha of poor forest and
2,378 ha of regenerating forest.

155
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158
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Figure 3.6. Transmission Lines and Biodiversity Values
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The assessment of the economic value of the forest cover lost to the transmission line tracks was
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based on valuation data from the Forest Science Institute of Viet Nam, which include data about
timber product, non-timber forest product and other ecological effects such as soil protection,
water regulation and carbon absorption.
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158
The value of the forest to be cleared in the whole country during the construction of the
transmission lines in PDP VII are set out in the table below. The total resource value of the
forests cleared would be around 4,350 billion VND, the equivalent of approximately US$218
million. Of course, some of these values can be recouped if the timber cleared during construction
is sold but this nonetheless represents a major loss of resource values associated with the
construction of the transmission lines.

158
Table 3.6. Values of Forests Cleared in Transmission Line Construction
Forest Type Timber Values Ecosystems Services Values (million VND) Total Values
*
Category Hectares Million Total Value NTFP Soil Water Carbon Total ES (million VND)
VND/ha (million VND) Protection Regulation Sequestration Value
Rich 7,739 270 2,089395 18,573 45,657 136,792 916,239 1,121,940 3,211,335
Medium 2,542 150 381,225 6,099 13,979 35,327 220,094 275,499 656,724
Poor 1,445 65 93,925 3,468 7,515 16,762 101,584 129,328 223,253
Regenerating 2,378 40 95,100 5,706 11,650 18,307 127,197 162,860 257,960
Total 14,103 2,659,645** 33,848 78,800 207,368 1,365,113 1,689,626*** 4,349,271****
* ** *** ****
Non-Timber Forest Products equates to US$133 million equates to US$85 million equates to US$218 million

159
The construction of transmission lines also results in loss of ecosystem service value in areas of
high tourism potential such as national parks and conservation areas. If the transmission lines
pass through these areas there will be amendity value impacts, which leads to loss of local
livelihood and income. Furthermore, the transmission line route will open forest areas up to
further encroachment and degradation of the forests. Although impossible to quantify, these are
significant threats to forest resource values attributable to the construction of the transmission
lines through forest areas.

The transmission lines in PDP VII sometimes will pass through protected areas (Pas) and key
biodiversity areas (KBAs). It is necessary to identify which transmission lines will pass through
conservation areas and areas of high biodiversity interest and determine the area of forest lost to
these transmission lines.

The results (see Appendix 4) show that the transmission lines in PDP VII will pass through a total
of 59 Pas and 39 KBAs, with 3,387 ha cleared in Pas and 2,297 ha in KBAs. This represents only
a small fraction of the total area of these two categories of land of particular biodiversity and
ecological significance (less than 0.5% of the total of each category), but it is significant in
another way. The ecological value and viability of these sensitive areas can be seriously
compromised when they are fragmented: divided into a number of different areas where the
habitats of sensitive species are divided up with a risk of their becoming non-viable.

The extent of fragmentation varies greatly, with many areas having one division within them but
others being divided into several fragments. For example, Na Hang protected area will be
divided into 5 fragments, as will Yen Tu, Vinh Cuu and others. The integrity of these most
severely affected areas could be seriously compromised. In some cases, the impact of the
transmission lines in terms of area cleared and, in particular, fragmentation is further
compounded by the fact that these areas will also be affected by the development of hydropower
schemes in their vicinity. For example, the 500 kV transmission line through Cat Tien national
part will result in the loss of 200 ha and the park will be divided into at least 4 fragments as
shown in the figure below.

160
Figure 3.7. Transmission Lines – Habitat Fragmentation

161
The figure above shows how the transmission lines 550 kV and 220 kV divide Cat Tien national
park. It also shows that this area will also be impacted by hydropower development from Dong Nai
4 and Dong Nai 5 dams. The forest area will be affected by the construction of dams in Dong nai 4
and Dong Nai 5 (the zone of influence of which will affect 19,092 ha, 24% of the Park’s total area).
Cat Tien is an example of an area of extremely high ecological significance of international
importance, as it is the habitat of the Lesser One-Horned Rhinoceros, the Asian Elephant, the Gaur,
Orange-Necked Partridge, the Siamese Crocodile and other species of great biodiversity
significance. Similarly, Ngoc Linh Nature Reserve will lose around 80 ha and will be divided into
at least two fragments. It will also be seriously compromised by the development of Dak Mi 1
hydropower scheme, with 23,061 ha, 48% of the Reserve’s total area falling in to Dak Mi’s zone of
influence. Ngoc Linh is the habitat for a variety sensitive and rare species of birds, mammals and
reptiles, including several in the Red Book of endangered species.

The construction of transmission lines as presented in PDP VII will consequently have significant
ecological and resource value impacts. These in turn will have economic consequences in terms
of the loss of ecosystems services values and negative local livelihood and amenity value impacts.
There are also negative aesthetic impacts wherever the lines are constructed, including through
rural areas where the land cover loss is small but the visual impact can be great. These impacts are
again impossible to quantify but are nonetheless significant and need to be assessed.

The extension of the transmission grid is vital to the future development of the power supply
system in Viet Nam and there are both technical and economic restrictions that limit the extent to
which the negative impacts itemized above can be mitigated.

3.3.2. Changes to Hydrological Regimes, Integrated Water Resource Management,

and Salt Water Intrusion.
Altering the natural flows of rivers and streams and storing water in reservoirs to regulate the flows
to serve different human interests including hydropower development have many potential impacts
on flow mechanism, water quality and flow load.

Part of this problem is inappropriate use of water resources. Big thermal power and nucluear
power plants use an enormous amount of water. The fact that these plants are located in areas of
limited surface water resources, such as Binh Dinh and Ninh Thuan, only makes the problem
worse.

Below are results of detailed research on this type of impacts.

3.3.2.1. Changes to Downstream Hydrological Regimes

Major downstream hydrological changes can affect riparian ecosystems dependent on periodic
natural flooding, exacerbate water pollution during low flow periods and increase saltwater
intrusion near river mouths. Reduced sediment and nutrient loads downstream of dams can
increase river-edge and coastal erosion and damage the biological and economic productivity of
rivers and estuaries. Induced desiccation of rivers below dams (when the water is diverted to
another portion of the river or to a different river) kills fish and other fauna and flora dependent on
the river; it can also damage agriculture and human water supplies.

162
According to International Center for Environmental Management (ICEM), reservoir filling of
Song Bung 4 (490 million m3) will result in downstream desiccation and a lack of water for
production. The construction of too many dams upstream will also lead to salt water intrusion at
the river mouth and loss of nutrition load in the South China Sea.

There are two types of project that uses water: (1) project that uses most of the input water; and (2)
project that releases the water after use.

Type 1 includes irrigation, domestic water supply and hydropower development projects. In these
projects, the water volume downstream of dams is much less because water stored in the dams is
used up and not released back to rivers.

An Khe – Kat Nat hydropower plant by Electricity Vietnam (EVN) is an example of how this type
of project can affect the environment. The plant has a capacity of 160 MW and has been affecting
the downstream of Ba river basin. The construction was finished in September 2010 in Gia Lai
province with the minimum environmental flow of 4m3/s. In the plant design, instead of being
released back to the river after running the turbines, the water is channeled through a several
kilometer long pipeline system through the mountains to Ko River in Binh Dinh province where
the generators are located. This means death to a segment of Ba River of about 50km from An
Khe district capital to Kong Choro district. Thousands of local residents who used to rely on
water from this river for their domestic and productive water supply have lost their water source
and now are faced with serious pollution.

Ba River is about 374 km long, flowing North-South from Kon Plong district in Kon Tum
province through KBang, An Khe, Dak Po, Kong Chro, Ia Pa, and Ayun Pa in Gia Lai province to
the South China Sea in Da Dien, Phu Yen province. When the An Khe – Na Kat hydropower plant
was completed in September 2010 and started storing water for power production in June 2011, it
disrupted the flow of Ba River and caused a lot of trouble for local people. There is no longer
water flow in downstream Ba River but only wastewater discharges from the An Khe sugar
factory, Ve Yu cassava factory, and a MDF factory.

The An Khe water supply facility now has gone out of operation because the water ran out. As a
consequence, thousands of households in An Khe town have no access to domestic water supply.
Most local people had to dig wells for drinking water. The dried out river is now a waste dump
full of dead cattle and fish. The pollution in this section of the river is becoming more and more
serious.

Local residents of An Khe, Dak Po and Hinh River Basin area have made many complaints to local
governments and to the An Khe – Ka Nat Hydropower Company. The company only releases water
from the reservoir occationally to “help out”. Their response to local pressure was that local people
need to make “a proposal specifying how much water is needed for local domestic water supply,
agricultural and industrial activities for them to make a plan for water release to avoid wasteful
release of the water”.

The Dak Mi 4 hydropower project also caused conflicts over the use of water. According to the
plan designed by IDICO, the water is taken from upsteam Vu Gia River and released to Thu Bon
River. This resulted in the dry-out of downstream Vu Gia River where it passes through Da Nang
163
province, affecting thousands of hectares of cropland and 1.7 million river basin residents living in
the north of Quang Nam and Da Nang province. The Ministry of Commerce has recommended the
government to instruct IDICO to build a pipeline system to run water back to Vu Gia River at the
rate of 8 m3/second. The government of Da Nang City was not happy with this low rate. The
Ministry of Environment and Natural Resources then advised the Government that water should be
returned at the rate of 25 m3/second. However, to date, the government of Da Nang City is still not
happy with this recommendation and asking for all the water to be released to Vu Gia River after
being used in Dak Mi 4 hydropower project.

Type 2 are hydropower plants located downstream of dams or next to dams. These hydropower
plants do not affect the overall or seasonal downstream water flows. There might be some
difference at different times of the day or of the month (or between day and night, within a year,
within a few years) depending on the water regulation schedule. One example of a hydropower
project of this type is the Xayaburi dam in the meanstream Mekong River. This is a project that
involves many countries. Vietnam might be the country that is affected the most.

The Xayaburi hydropower station is built, it will only operate during high demand hours (for 7-8
hours). For the rest of the time, water will refill the dam’s resevoir and only a small amount of
water will flow downstream. This can potentially cause many disavantages for downstream
countries including Vietnam for the following reasons:

+ Low water flow at river mouth will increase salt intrusion in the Mekong River Delta. This will
pose a serious threat especially in the context of climate change and rising sea level.

+ Downstream riparian ecosystem can be severely destroyed by the big differences in river
flows in one day when the flow is manually regulated on daily basis.

+ A dam can potentially have serious impacts on the ecological health of a river and domestic as
well as economic activities of local residents who rely on products and services made available
by the river.

The presence of a new dam can cause significant changes to river ecology hundreds of kilometers
downstream due to changes in water flow (in both volume flow rate and time), water chemical
properties, physical structure of the river bed and river basin, and the hydrological connectivity
between upstream and downstream water and between the river and its basin. Chemical and
physical changes to the river often lead to ecological changes, notably the loss of high economic
value fauna and flora that local residents use as food, construction materials, and effects on other
entertainment, tourism and cultural purposes.

While only 40 to 80 million people were relocated globally as the result of dam construction,
millions have suffered from the degradation of downstream river ecology.

These adverse impacts can be minimized through careful management of water releases.
Objectives to consider in optimizing water releases from the turbines include adequate
downstream water supply for riparian ecosystems, reservoir and downstream fish survival,
reservoir and downstream water quality, aquatic weed and disease vector control, irrigation and
other human uses of water, downstream flood protection, recreation (such as whitewater boating),
and, of course, power generation.
164
From an ecological standpoint, the ideal water release pattern would closely mimic the natural
flooding regime. Dams that generate baseload electricity are typically more capable of replicating
near-natural downstream flows than those that produce peaking power (where daily water releases
may fluctuate sharply, often to the detriment of aquatic organisms that are adapted to less frequent
flow changes). Environmental management plans for hydropower projects should specify
environmental water releases, including for dams owned or operated by the private sector.

Figure 3.8. Water Release Regime Ensuring Environmental Flow

3.3.2.2. Assessment of Impacts on Water Resource and Integrated Water Resource

Management

Environmental impacts on water resource are likely to happen when a series of hydropower plants
is planned in a river basin. The SEA of impacts on water resources of hydropower projects in PDP
VII mainly focuses on the likelihood of changes to hydrological regimes in river basins in which
hydropower plants are planned to be built. The basis of the assessment presented here is the
hydrological modelling undertaken by the Institute for Water Resources Planning using the MIKE
Basin model (with support from the ADB). Supply-demand balances for the years 2015 and 2025
were calculated for the ten river basins in which hydropower schemes are planned in the scenarios
analysed in the SEA of PDP VI. The results are as follows:

Of these ten river basins, five have only one scheme planned: the Ca RB (Khe Bo scheme), Huong
RB (A Luoi scheme), San Se RB (Upper Kon Tum scheme), Srepok RB (Srepok 4 scheme) and
Kone RB (Vinh Son II scheme). These are mostly smaller schemes and their overall impacts on
the basins in which they are planned for would be small in terms of changes to hydrological flows.
Together, these five schemes represent only 5% of the total additions to storage capacity of the 21
schemes that are planned for development after 2010 and considered in the scenarios. The
hydrological modelling showed that the hydropower schemes will make only marginal differences
to river flows and storage capacities in these basins, including where (such as in the Srepok river
basin) there are predicted future problems in meeting dry season water demands. Other solutions
165
to these likely deficits will need to be found, including the construction of additional storage
capacities where appropriate.

The remaining five basins have at least two planned schemes: the Da river basin with four
schemes, the Lo Gam river basin with two schemes, the Ma-Chu river basin with three schemes,
the Vu Gia-Thu Bon river basin with five schemes and the Dong Nai river basin with two
schemes. The impacts of the planned hydropower schemes on hydrological flows are more
significant in these basins as briefly discussed below.

The four schemes in the Da RB (which feeds into the Red River in northern Viet Nam, see Map 4-
1) include Lai Chau (1,215 million m3) and Ban Chat (2,138 million m3) which, between them,
represent over 43% of the total changes to storage capacity of the 21 planned schemes. The impact
of the schemes on the Da RB will be significant, both reducing wet season flood peaks (for
example, the flood peak at Pa Vinh will be reduced by 10%) and adding some 145 m3/second to
dry season flows. Although there are not at present any concerns over drought conditions in this
river basin, further ensuring the security of dry season flows is potentially valuable.

Figure 3.9: Planned Hydropower Schemes in the Da River Basin

166
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The two planned schemes in the Lo-Gam RBs, Bac Me and Nho Que 3, in the very north of Viet
-$=0':-! 0?! %#$=$! *=$! +'%! 0+%$=<$+%0'+-! %'! 0+.=$*-$! -%'=*A$! .*(*.0%>! *+,! =$A:)*%$! ?)'&-B! ! "#$!
Nam, are in an area where the prospects of structural dry season water deficits are very serious if
#>,=')'A0.*)! /',$))0+A! -:AA$-%! %#*%! %#$-$! ,$?0.0%-! &0))! C$.'/$! *.:%$! C>! DEDF! &0%#':%!
there are not*??$.%0+A!
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,'&+-%=$*/! &*%$=!storage capacity
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G$'(*=,0-0+A! flows. The
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?)'&-! %'!
modelling suggests that these deficits will become acute by 2025 without
,'&+-%=$*/! $.'->-%$/-B! ! 5*.! 7$! H>,='('&$=! I='G$.%! &0))! .'+%=0C:%$! %'6! C:%! +'%! C$! interventions, affecting
downstream water users and jeopardising environmental flows to downstream ecosystems. Bac
-:??0.0$+%6!*,,=$--0+A!%#0-!(='C)$/B!
Me Hydropower Project will contribute to, but not be sufficient, addressing this problem.
"#$!%#=$$!-.#$/$-!()*++$,!?'=!%#$!7*!J!K:!C*-0+-!L"=:+A!M'+6!H'0!N:*+!*+,!H:*!8*O6!'+!
%#$!C'=,$=!C$%&$$+!+'=%#$=+!*+,!.$+%=*)!@0$%!8*/6!&0))!#*<$!*!%'%*)!-%'=*A$!.*(*.0%>!'?!'<$=!
The three schemes planned for the Ma – Cu basins (Trung Son, Hoi Xuan and Hua Na), on the
;
PEE! /0))0'+! / 6! &#0.#!
border between northern 0-! *!and
-0A+0?0.*+%!
central */':+%!
Viet Nam,'+! will
*! =0<$=! ->-%$/!
have '?!storage
a total %#0-! -0Q$B! ! "#$=$!of0-!over
capacity *%! 900
(=$-$+%!+'!&*%$=!-#'=%*A$!0+!%#0-!*=$*!C:%!%#$!/',$))0+A!(=$,0.%$,!*!,$?0.0%!0+!%#$!,=>!-$*-'+!
million m3, which is a significant amount on a river system of this size. There is at present no
C>!DEDF!0?!%#$!*,,0%0'+*)!-%'=*A$!.*(*.0%>!0+!%#$!#>,='('&$=!-.#$/$-!0-!+'%!.'+-%=:.%$,B!!R-!
water
%#$! shortage
?0A:=$! *C'<$!in-#'&-6!
this area but('%$+%0*)!
%#$-$! the modelling predicted
-#'=%*A$-! &':),! a deficit in theC$!dry
G:-%! *C':%! season by
*,,=$--$,! C>!2025
%#$! if the
additional storage capacity in the hydropower schemes is not constructed. As the figure above
.'+-%=:.%0'+!'?!%#$!#>,='('&$=!-.#$/$-B!
shows, these potential shortages would just about be addressed by the construction of the
"#$!?0<$!-.#$/$-!LM'+A!5:+A!D6!M'+A!5:+A!S6!-'+A!5:+A!F6!T*U!70!V!*+,!T*U!70SO!()*++$,!
hydropower schemes.
?'=!%#$!@:!30*!J!"#:!5'+!C*-0+!&':),6!0?!.'+-%=:.%$,6!(='<0,$!*+!*,,0%0'+*)!V6S;S!/0))0'+!/ ;
!
-%'=*A$!.*(*.0%>!0+!*+!*=$*!%#*%!0-!)0U$)>!%'!$W($=0$+.$!-$<$=$!,=>!-$*-'+!&*%$=!-#'=%*A$-!0+!%#$!
The five schemes (Song Bung 2, Song Bung 4, song Bung 5, Dak Mi 1 and Dak Mi 4) planned for
+$*=!?:%:=$B!!"#$!/',$)0+A!(=$,0.%$,!*!PEX!(='C*C0)0%>!'?!-0A+0?0.*+%!&*%$=!-#'=%*A$-!0+!%#$!
the Vu Gia – Thu Bon basin would, if constructed, provide an additional 1,434 million m3 storage
)'&$=!=$*.#$-!'?!%#$!C*-0+!0+!%#$!?0<$!/'+%#-!R(=0)!J!R:A:-%6!*%!*+!*<$=*A$!%'%*)!)$<$)!'?!DYY!
capacity;!?'=!%#0-!($=0',!0?!%#$=$!0-!+'!*,,0%0'+*)!-%'=*A$!.*(*.0%>!C:0)%!0+!%#$!C*-0+B!!"#$!?0<$!
/0))0'+!/ in an area that is likely to experience severe dry season water shortages in the near future.
;
The modelling
-.#$/$-! predicted
&':),! #*<$! a 90% probability
%#$! ('%$+%0*)! %'! (='<0,$!of
*+!significant
*,,0%0'+*)!water
DVZ! /shortages
! ?'=! %#0-!in the lower
($=0',6! reaches of
/$$%0+A!
/'-%!C:%!+'%!*))!'?!%#$!(=$,0.%$,!,$?0.0%6!if!%#$!=$-$=<'0=-!*=$!/*+*A$,!%'!/*W0/0Q$!,=>!-$*-'+!
the basin in the five months April – August, at an average total level of 277 million m3 for this
?)'&-B! ! "#$!
period =$/*0+0+A!
if there ,$?0.0%! .':),!
is no additional C$! capacity
storage /$%! 0?! $W0-%0+A!
built in #>,='('&$=!
the basin. The -.#$/$-! LR! @:'+A!
five schemes would *+,!
have the
M'+A! "=*+#! DO! *=$! /*+*A$,! %'! =$A:)*%$! %#$0=!3 =$)$*-$! ,0-.#*=A$-! 0+! *+! *((='(=0*%$! /*++$=B!!
potential
"#$=$! to provide an
0-! .'+-$[:$+%)>! additional
)0%%)$! 218 %#$!
,':C%! %#*%! m for this period,
#>,='('&$=! meeting0+!most
-.#$/$-! %#$! but
@:! not
30*!all of the5'+!
J! "#:! predicted
deficit, if the reservoirs are managed to maximize dry season flows. The remaining deficit could
C*-0+!&0))!#*<$!*!-0A+0?0.*+%!0/(*.%!'+!%#$!#>,=')'A>!'?!%#$!*=$*B!!"#$!(=$.0-$!+*%:=$!'?!%#0-!
be met if existing hydropower schemes (A Vuong and Song Tranh 2) are managed to regulate their
0/(*.%!0-!.'+%0+A$+%!:('+!%#$!/*+*A$/$+%!=$A0/$!0/()$/$+%$,!0+!%#$!=$-$=<'0=-!'?!%#$-$!?0<$!
release discharges in an appropriate manner. There is consequently little doubt that the
#>,='('&$=!-.#$/$-B!
hydropower schemes in the Vu Gia – Thu Bon basin will have a significant impact on the
"#$!%&'!-.#$/$-!()*++$,!?'=!%#$!T'+A!8*0!C*-0+6!T'+A!8*0!D!*+,!T'+A!8*0!F6!*=$!%'!C$!C:0)%!
hydrology of the area. The precise nature of this impact is contingent upon the management
0+!'+$!'?!%#$!/'-%!0+%$+-0<$)>!,$<$)'($,!(*=%-!'?!@0$%!8*/6!&0%#!%#$!T'+A!8*0!40<$=!?$$,0+A!
regime implemented in the reservoirs of these five hydropower schemes.

167
89
The three schemes planned for the Dong Nai basin, Dong Nai 2, Dong Nai 5, and Dong Nai 6 are
to be built in one of the most intensively developed parts of Viet Nam, with the Dong Nai River
feeding into the Ho Chi Minh City region with its dense collection of industry, intensive
agriculture and human settlements. This area is not likely to suffer from water shortages in the
future. The model predicts that inflows in this area will exceed demand by several times in 2025
even during the dry season but will start to decrease by 2030. The impact of the two hydropower
schemes on the hydrology of this river basin will be marginal.

The above paragraphs provide an overview of the likely impacts of the 21 hydropower schemes on
the hydrology of the nine river basins in which they are planned to be built. The impact will be
significant, in terms of overall and seasonal water flows, in a few basins and marginal in the rest.
To what extent will these changes in hydrology be reflected in significant impacts on the
economies and human development of the different basins? These effects are assessed here, firstly
through the consideration of changes in dry season water availability and then through a
discussion of potential impacts on the incidence of floods in the different basins.

The data on storage capacities, dry season supply changes and flood control capacities were
derived from the modeling exercise. The data on irrigated area, crop yields and economic values
for crops were derived using average national figures in 2008. This is based on the assumption that
all of the additional dry season water flows are used for irrigated paddy rice production, and that
average yields are achieved in the areas irrigated. The figured consequently represent a theoretical
maximum, not a likely outcome. But balanced against this is the consideration that using the water
for irrigated agriculture represents a low economic value use of water and it is possible that some
of the water would be used for higher value forms of production (including activities such as
vegetable production and aquaculture in the agricultural sector as well as non-agricultural
activities).

As such, the figures do provide a robust indication of the potential economic impact of changes to
dry season water flows if and when the reservoir discharge regimes are managed to take these
potential non-power benefits into account (though of course the total value cannot be attributed to
changed water management alone, as there are other costs of production such construction and
operation & maintenance that need to be taken into account). This, of course, represents a further
qualification to the analysis presented here, as at present most hydropower reservoirs are managed
for power generation purposes only and the potential non-power benefits are not sufficiently
recognized. As analysis presented in 3.3.2.1 shows shows, such benefits are far from insignificant.
It should however be noted that any changes in the reservoir operation to carter for other water
users could imply decreased energy production and thus less power benefits.

At the moment when all 21 schemes are being built, is of course when the highest impacts would
be found. The improvements to dry season water flows in this scenario would allow over 25,000
extra hectares to be irrigated, producing a yield of over 150,000 tonnes of rice and generating an
income of over $90 million (using March 2008 prices16) per year. This additional income would
benefit many thousands of farming families throughout the country. Given that, at the time of
writing, the world is experiencing a rice shortage and rapidly rising prices, and that such problems
are predicted to intensify in the future, the economic and food security benefits of improved dry

16
Rice price updates by Food and Agriculture Organization (FAO): www.fao.org/es/esc/en/15/70 168
season water availability are likely to be even more significant than the figures presented above.

The data presented here translates these figures into an economic value that can be taken as a
minimum. If dry season water deficits impacts beyond irrigated agriculture, into human
consumption, industrial production or the maintenance of ecosystems integrity, then the social,
economic and environmental impacts would be even higher.

The planned hydropower schemes also have potential flood control benefits in a number of river
basins. The data available does not permit a calculation of the economic significance of these
potential flood control benefits (data on the economic losses from flooding is almost non-existent
in Viet Nam and by their very nature floods are unpredictable so calculating the reduction of risk
is itself an inherently risky business). It is possible to provide some indicative analysis on the
potential scale of such benefits.

Floods in the wet season are a concern in the Red River system, with at present Hanoi vulnerable
to 500 and 1000 year return flood events and many rural areas experiencing inundations on a
regular basis. There is an extensive and long-standing system of flood control measures in the
lower Red River, but these are not effective against all floods and future uncertainties over the
impact of climate change mean that there is a risk that such system failures will increase in the
future. Upstream reservoirs, if managed effectively, can significantly improve the prospects of
water levels remaining below the water levels of the existing dyke systems. The modeling of water
flows in Da and Lo-Gam river basins suggests that the risks of downstream floods would be
significantly reduced, with Hanoi no longer at risk from 500 and 1000 year return events and
water levels staying below dyke design levels in most years for most of the lower Red River area.
Such potential benefits cannot be quantified but are of major significance.

There are also potentially significant flood control benefits in the lower Vu Gia-Thu Bon basin.
The total flood storage capacity of the reservoirs would be over 1 billion m3, about 20% of the
total designed flood volumes at a frequency of 10% at Ai Nghia and Giao Thuy if all the schemes
were built in this basin. This translates to a reduction of between 0.7 and 1 metre in maximum
inundation depths in the lower basin, which is in itself significant but does not provide anything
close to full flood protection as there are still maximum potential inundation depths of between 2
and 3 metres in some places. As such, flood risks will be reduced but will still be significant in this
river basin.

Taken together, the impacts of the altered hydrology of the ten river basins in which it is planned
to build hydropower schemes are extremely significant if, and this must be stressed, the resultant
reservoirs are managed so as to maximize multi-purpose benefits. Potential increases in dry season
water flows could generate additional income for thousands of families and improve national food
security. Apart from calculating the costs of air pollution, the assessment also makes suggestions
to improvement of water supply in river basins in dry season (not by individual project but by each
base scenario alternative). The value is estimated based on the assumption that all of the additional
dry season water flows are used for irrigated agricultural production (according to forecasts, there
will not be any problem in minimum environmental flows in all river basins). Increases in
irrigated agricultural production area will be calculated based on the round up of annual average
figures. Increases in additional crop yield and economic value of crop yield will be calculated
based on average annual crop yield figures. The result shows an increase in annual economic value
169
of crop yield at about $92 million.

If taking into account the potential flood control benefits it is certain that the overall benefits of
hydropower development projects of PDP VII in terms of water resources are very high. It is not
possible to calculate the economic significance of the potential flood control benefits using the
existing data. However, there is a methodology to do this calculation if data to be gathered in the
future permit.

This reflects, firstly, widespread concerns over the future availability and quality of water when
PDP VII is implemented. Secondly, it reflects the awareness that existing hydropower schemes
have had a substantial effect on the hydrological regime. These concerns were compounded by the
existing management regime of hydro reservoirs, which are not generally managed with multi-
purpose objectives as a specific intent but only with the power production objective. The extent to
which this has an impact on other sectors at the present time is hard to calculate, but as the
analysis below shows the potential benefits of multi-purpose management are significant.

Thermal power development also has impacts on water resources. However there has been no
detailed calculation or specific study on the subject in all research reports and designs of thermal
power development projects that provides a view on impacts on water resources of thermal power
plants located in river basins. In reality, thermal power plants have certain impacts on water
resources and these impacts can be quite significant. Thermal power generation is different
from hydropower generation. Thermal plants use circulating water from a cooling tower or
once-through water from a river for cooling purposes and also use water for other
productive activities in the station. According to the forecast scenario, water demand in
thermal power development projects is quite significant, as showed below:

Between 2011 and 2015: 0.5 m3/h x 15,365 MW = 7,682.5 m3/h

Between 2016 and 2020: 0.5 m3/h x 32,385 MW =16,192.5 m3/h.
By 2030: 0.5 m3/h x 77,160MW = 38,580 m3/h

The pressure on water resources will be significant considering how water resources are becoming
more and more rare. The fact that big power plants using large amount of water will affect the use
of water by families residing in the lower river basin areas and increase salt water intrusion, which
have big impacts on human living and production activities as well as the ecosystems of rivers.
Some projects take large amounts of water for cooling purpose from one river and release the water
into another river, which affects the hydrology of both river basins.

As studies show and evident by the recent floods, Vietnam is facing a wide range of challenges
related to water supply and water resource management in meeting future water demand in an
efficient and sustainable manner. These challenges include increasing water shortages in many
river basins during dry season, widespread vulnerability to floods (especially in the central and
southern parts of the country), degrading water quality as the result of increasing pollutant loads
from a variety of sources (i.e. industry, agriculture and human settlements), concerns over the
widespread degradation of aquatic ecosystem quality, and major uncertainties over the future
impacts of climate change on the water resources of Viet Nam. The Water Sector Review and the
Rural Water Supply and Sanitation Review identified the link between access to water resources
and poverty reduction. These reviews pointed out a number of specific issues in relation170 to the
impacts of hydropower on water resources. These issues are: (a) poor integration of hydropower
development into the overall water resource management system; (b) low level of attention of
other sectors and other nations to the design and management of dams and reservoirs, especially
dams and reservoirs in rivers that flow through several countries like the Mekong River; (c) low
level of participation and lack of attention to social and environmental impacts (something this
SEA intended to fix); and (d) limited knowledge about the impacts of changes to hydrological
regimes (including inter-basin impacts) on the overall water resource.
It is worth noting that these concerns relate as much or more to the process of planning,
implementation and management of hydropower schemes than any inherent effects of
hydropower. In other words, most of these concerns could be addressed if and when hydropower
is more effectively integrated into the overall water resources management system and, in
particular, when the needs and concerns of other sectors (including the environment) are taken into
account in the planning and design of schemes and the management of reservoirs. A specific
intention of the National Water Resources Strategy is to ensure the integrated planning of water
resources within river basins, but this has been hampered in Viet Nam by a lack of specific
legislation.
3.3.3. Changes to Environmental Elements
3.3.3.1. Deterioration of Water Quality
a. Hydropower Impacts:

The damming of rivers can cause serious water quality deterioration, due to the reduced oxygenation
and dilution of pollutants by relatively stagnant reservoirs (compared to fast- flowing rivers),
flooding of biomass (especially forests) and resulting underwater decay, and/or reservoir
stratification (where deeper lake waters lack oxygen). Where poor water quality would result from
the decay of flooded biomass, selective forest clearing within the impoundment area should be
completed before reservoir filling.

Downstream flow is often reduced as the result of reservoir management. When the flow is
reduced, the ability of a river to dissolve wastewater discharges from nearby factories is also
reduced. This results in deterioration of water quality. Good examples of this phenomenon are the
An Khe – Kanak project in Gia Lai and the Dak Mi 4.

b. Thermal Power Impacts

Wastewater discharges from thermal power plants carry variable amounts of pollutants depending
on the types of thermal plant. Wastewater discharges from thermal power plants if not properly
treated tend to cause serious pollution to surface water. Even when treated, wastewater discharges
to a river can still cause pollution if the discharges exceed the permitted level.

Standard use of water in thermal power plant is 0.5m3/h, which means the future demand for
water for thermal power development will be:

Between 2011 and 2015: 0.5 m3/h x 15,365 MW = 7682.5 m3/h

Between 2016 and 2020: 0.5 m3/h x 32,385 MW =16,192.5 m3/h.
By 2030: 0.5 m3/h x 77,160MW = 38,580 m3/h
171
Assuming all this water will be released after use in thermal power plants, the impacts it causes to
the environment will be widespread and varying depending on the water sources and the types of
thermal power plant that the water is discharged from.

A thermal power plant with a capacity of 1,200 MW uses a large amount of water for cooling at
about 200.000m3/h. The water temperature after cooling usually increases by 7-8oC or even 9-
10oC if the plant uses Flue Gas Desulfurization (FGD) techonology. Main impact of cooling
water discharge is the temperature increases that affect aquatic habitat and create an imbalance
in the ecosystem. The impact radius for this is usually within 2 km2 from the plant. The impact is
intensified if there are a number of thermal power plants in one area.

c. Power production from nuclear and renewable anergy and transmission line development have
almost no impact on water quality. Large quantities of cooling waters from nuclear power plants
however might have some impact on the sea water near the coast.

3.3.3.2. Air Pollution

a. Estimated Amount of Pollutants from Thermal Power Development in PDP VII

Air pollution causes serious impacts on human health, crops, ecology, soil and water quality, etc.
!"#$%"#$Ĉ"&'$()"$*+)$,-ѭӡ&($.')Ӄ&$/ѭӧ%$ $
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The physical quantities of four main pollutants (CO2, SO2, NOx and PM) have been assessed for
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each existing and planned thermal power station in PDP VII and the severity and cost of their
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impacts have been estimated (Figure 3.1 and Table 3.2). The results show that increases of these
,-ѭӡ&($%ӫ;$%"%$,"%$ÿӝ&($ÿH$ÿJ$ÿѭӧ%$Oӵ$<"#$?'P&'$4M2$DE$<ҧ&($4MAFM$$QӃ,$KLҧ$,>&'$,#"&$%'#$,'ҩI$
emissions are very high and will be one of the most significant increases of pollutants in the
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Vietnamese economy. Table 3.7 shows that these emissions are extremely high, especially from
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the combustion of coal, with CO2 and PM releases increasing
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VII period up to 2030 and those for SO2 and NOx increasing
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Figure 3.11. Pollutants from Thermal Power Plants – Base Scenario
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% 172
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Table 3.7.Estimated Emission of Pollutants from Thermal Power Plants by Fuel Source

Year 2011 2015 2020 2025 2030

Coal Unit: Ton (CO2: 1000 tonnes)

PM 2024.1 5742.1 14049.4 21319.4 34461

SO2 31625.4 50054.2 105459.1 151561.6 246442.6

NOx 35240.6 49642.9 80128.2 105248.9 151428

CO2 27975.9 72671.2 157139.8 233467.5 379938.3

Oil
PM 2772.6 805.9 0.99 0.99 0.99

SO2 84.9 26.6 4.62 7.1 5.7

NOx 4848 1267 64 213 127
CO2 2740.1 1288.2 168.5 258.6 206.3

Table 3.8. Total Emission of Pollutants from Thermal Power Plants in Base Scenario

Year 2011 2015 2020 2025 2030

PM 4796.7 6547.9 14050.4 21320.4 34462.01

SO2 31710.3 50080.8 105463.8 151568.7 246448.2
NOx 72642 85152 119778 153349 198196

CO2 59463.1 107162.5 201490.6 297237.2 443802.2

Note:
Thermal Power Plants Using CFB
Thermal Power Plants Using CFB and Mitigation Measures

Overall, coal is the main source of these pollutants, a dominance that will increase over the plan
period. The generation of electricity through the combustion of coal constitutes the largest
element of the planned expansion in generating capacity in PDP VII while the generation of
electricity from oil decreases and the generation of electricity from gas increases slowly. This
represents a paradox: coal is the cheapest and most abundant source of fossil fuels in Viet Nam
but it also produces higher levels of atmospheric pollution than either oil or, in particular, gas. In
consequence, atmospheric pollution from the combustion of coal will be the dominant concern in
relation to social and environmental impacts of the whole power sector by the end of the PDP VII
plan period in 2030.
The increases in gas emissions also mean increased proportion of pollutants in the air even when
advanced techonologies are used in gas emission treatment. The impact radius is usually within 10
km from the plant. The impact radius varies depending on the geography, the wind and the height
of the gas emission source. The level of impacts on human health, the ecology and others also
varies depending on the proportion of polluted airs in the air and the density of the pollution
sources in one area. The figure below shows the impact zones of thermal plants and how 173they
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overlap in the thermal power development plan.
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Figure 3.12. Thermal Plants – Population at Risk

0)Ӌ&$1ă&($/ѭӧ&($ $ 234$
174
Acidification: is the consequence of SO2 emissions. This is currently an important issue because
it has been seen more and more in the South East Asian region, causing regional impacts on
ecosystems a long way away from the emission sources. Many parts of Viet Nam suffer from the
impacts of acidification, affecting both soil and water quality and impacting on freshwater aquatic
ecosystems. According to acidification monitoring data of 20 monitoring stations (Institute of
Science, Meteology, Hydrology and Environment), acid rain was most seen in the south eastern
region, followed by Can Tho, Tay Ninh, Viet Tri, Vinh, Hue, Da Nang and Ca Mau. This has
impacts on freshwater aquatic ecosystems. Under the base case scenario, SO2 releases increase
from over 31 thousand tonnes in 2011 to over 246 thousand tonnes in 2030. Coal fired stations
are the main source of these pollutants.
These ‘acid rain’ impacts are particularly felt by ecosystems that are highly dependent upon water
and that are vulnerable to changes in the acidity of water inputs or sediments. These impacts can
seriously affect crop yields, destroy microorganism, disrupt the food chain, and damage the
integrity of the ecosystems. The most serious consequences might be loss of biodiversity due to
the distinction of many species, and even worse, destruction of the entire ecosystem. The
acidification of soils can also have an adverse impact on agricultural productivity and will require
substantial chemical inputs to restore a suitable soil ph level, with high costs to farmers and the
danger of further pollution associated with agro-chemical use.

Apart from that, acid rain also has impacts on the longevity and quality of instructures such as
roads, train rails, bridges and drainage systems.
Estimated Cost of Air Pollution from Thermal Power Plants

All three impacts of air pollution from thermal power plants (climate change, acidification and
human health) are significant. The calculation of cost associated with these impacts was based on
international norms with appropriate adjustments to the Vietnamese context. The cost of impacts
of electricity generation from coal is the highest and increasing. This cost is estimated at nearly
US$9.7 billion, higher than the annual investment required for the electricity sector (US$7.8
billion). These figures are only indicative and therefore cannot be used in calculating project
investment value as expected because there is no statistics available in Vietnam for this cost
calculation.
This cost figure shows the reliance on coal in electricity production and that the social cost of
impacts on the environment and human health contributes to the high cost of electricity in
Vietnam. Similar cost of electricity production from oil and especially gas is considerably lower.
Therefore it is not necessary to consider this cost for electricity production from oil and gas.

175
Table 3.8. Environmental Costs of Impacts on Human Health and Other Impacts

Year 2011 2015 2020 2025 2030

Coal Million USD

PM 41.71 118.34 289.55 439.38 710.22

SO2 93.52 148.01 311.84 448.16 728.72
NOx 113.59 160.02 258.28 339.25 488.10
CO2 57.19 1,485.5 3,212.1 4,772.4 7,766.5
Oil

PM 57.14 16.61 0.02 0.02 0.02

SO2 0.25 0.078 0.01 0.02 0.02

NOx 15.63 4.0841 0.21 0.69 0.41

CO2 56.0 26.33 3.4 5.3 4.2

Gas
NOx 104.93 110.37 127.60 154.36 150.34
CO2 587.6 678.7 903.2 1,298.2 1,301.2

Table 3.9. Total Environmental Costs for Each Pollutant

Unit: million USD

Year 2011 2015 2020 2025 2030

PM 98.86 134.95 289.57 439.40 710.24

SO2 93.77 148.09 311.85 448.18 728.74

NOx 234.15 274.48 386.09 494.30 638.86

CO2 1,215.5 2,190.5 4,118.7 6,075.9 9,071.9

176
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Figure 3.13. Additional Costs of Gaseous Emissions: Costs of Environmental and Health Impacts
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The economic cost of acid rain accounts for a very small proportion of environmental costs by
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main pollutants, as calculated in the “Valuation of Some Environmental Costs within the GMS
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Energy Sector Strategy” by Mans Nilson, the Stockholm Environment Institute. In this report,
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health issues such as respiratory and lung problems, etc., that cause income loss; (ii) hospital
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costs; (iii) loss of crop yields; and (iv) impacts on the infrastructure and acidification of soil. The
costs of SO2 emissions (including health impacts discussed below) are estimated to rise from
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nearly US$94 million in 2011 to nearly US$729 million in 2030.
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as one of the main environmental challenges resultant from power generation in Viet Nam.
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b. Air Pollution Caused by Nuclear Power Development
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radioactive accident.
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Nuclear power production in Vietnam only involves power generation from nuclear reactors and
ҧ&'$'ѭӣ&($5'Q&($:ҥN$$
storage and treatment of radioactive waste from electricity generation. Main environmental
impacts from nuclear power production include: (i) nuclear safety during the power production
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process, which is extremely important because nuclear accidents are usually very serious; (ii)
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radioactive waste management; (iii) impacts on the ecology and biodiversity, especially from the
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nuclear power project located near Nui Chua national nature reserve and other projects that are
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located in areas with high coral reef density; and (iv) social impacts (number of families/local
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residents evacuated, resettlement, impacts on community health, consensus of local people)
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Although adequate safeguards can be assumed for nuclear power projects, there is almost always
some level of release of radioactive pollutants in atmospheric emissions. These can result in
measurable increases in associated health problems such as thyroid cancer and cardiovascular
diseases. The prefeasibility study for Ninh Thuan 1 and 2 Nuclear Power projects estimated that
the impact radius for such risks is 2 km from the plant stack. But balanced against these must be
the very high positive impact of nuclear power where it replaces thermal power as a generating
source. The SEA estimates that the development of nuclear power in Viet Nam to a generation
capacity of 4,000 MW will reduce CO2 emissions and other atmospheric pollutants by removing
12 million tons of CO2 a year from coal combustion. This reduction of CO2 emissions is
comparable with the benefits from reduction of environmental impacts of thermo-power
development such as acid rain and impacts on human health, which is estimated at US$ 245.3
million (it is not possible to estimate the benefits of climate change impact mitigation). This
means that recognizing the potential risks of accidental releases of radioactive materials in nuclear
power production has no bigger impacts than air pollution impacts of thermal power production.
From 2016 Vietnam will have to import more than 50 million tonnes of coal every year to 120
million tonnes in 2030. This means Vietnam will be very dependent on prices and supply of fuel
from other countries. Nuclear power development will help to reduce this risk.
c. Power Production from Renewable Energy

Power production from renewable energy is a form of “clean” power production. However it also
has some environmental impacts that need to be considered and assessed such as (1) changes to
landscape and architecture; (ii) downstream sedimentation and erosion; (iii) changes to land use
structure.

3.3.4. Solid Waste and Toxic Waste

3.3.4.1. Solid Saste

The number of power development projects in the proposed scenario will produce the amount of
solid waste as mentioned in section 2.2.2.4 of this report. Forecast shows that the total amount of
waste of the electricity sector will increase by 1.5 million tonnes/month in 2030 (the electricity
production will increase by 50 times).

Coal ash produced from the coal combustion process in thermal power plants accounts for the
largest proportion of solid waste. Management of coal ash poses an increasingly serious problem
in Vietnam. Coal ash contains a few lethal substances such as heavy metals, which can cause
serious impacts on water resources and air pollution in waste dump areas if not managed properly.
Effective planning and management of solid waste is getting more attention from the central and
local goverments in Vietnam.

Considering the proportions of ash in domestic and imported coal are 23-25% and 16-17%
respectively, the estimated of solid waste (coal ash) from thermal power production will be about
2.8 tonnes in 2011 and increase to between 15.6 and 16.8 tonnes in 2020 (higher than the
estimated figure of 11.74 million tonnes in PDP VI) and to between 34.7 and 37.3 million tonnes
in 2030. The amount of solid waste in 2020 will increase six folds compared with that in 2011.
The land area required for managing solid waste will increase accordingly. Assuming that a
thermal power plant with a capacity of 1,200 MW needs 55 ha of land for storing coal 178 ash,
thermal power production will need 704 ha in 2011, 1,349 ha in 2020 and 3,215 ha in 2030 for
coal ash storage. Most of this area will be taken from agricultural production land. Therefore, land
area for agricultural production will decrease and the payments for environmental services (for
water, soil and air pollution management) will increase.
There is currently no available data about the economic cost of solid waste. This is an issue that
needs more attention, especially to studying international experiences in managing coal ash.
3.3.4.2. Toxic Waste

Toxic waste is currently not a big issue because the amount of toxic waste is not large but it will
increase when the number of power plants increases. This is the kind of waste that is hard to
manage as it has big impacts on the environment, ecology and human health.
Nuclear waste: one of the great unanswered questions associated with nuclear power development
globally is what to do with the waste products. The risks associated with highly toxic materials
with a half life measured in generations have not yet found a permanent solution. The most
common international practice of nuclear waste disposal is interim storage. There are strict
regulations regarding interim storage of nuclear waste are very strict from site selection to
construction specification and management technologies. At the moment, Vietnam does not have
any regulation or technical standard for interim storage of nuclear waste. Therefore, first step in
nuclear power development in Vietnam should be preparation of an adequate legal framework for
nuclear waste disposal.

The transportation of raw materials and waste products is also a significant issue, as the risks of
accidental contamination are much higher during this process. The eventual decommissioning of
nuclear power plants is also a critical step with high risks and high costs where large quantities of
contaminated wastes are produced (contamination is found not only in the materials but also the
physical structure of a nuclear power plant). The planned development of nuclear power in Viet
Nam is some time into the future, but it is essential that a strategy for the disposal of radioactive
waste products is developed, in particular looking for the radioactive waste disposal site.

3.3.5. Efficient Use of Natural Mineral Resources

The social economic development of Vietnam will no doubt exhaust the country’s natural
resources. To achieve sustainable development, Vietnam needs to pay attention to maintaining and
preserving natural resources through appropriate and efficient use of these resources.

In the past, Vietnam has been pursuing short-term benefits insteading of developing a long term
vision regarding the use of natural resources. There is a lack of sectoral cooperation in the
planning and management of natural resources that results in wasteful use of natural resources
including coal, oil, gas, rock, limestone, water and forest resources.

To meet the goal of efficient use of natural resources, a scenario was proposed in PDP VII to
achieve optimal and balanced use of natural resources. The scenario shows that from now until
2030, the electricity sector will consume a large quantity of fossil fuels of 188 x 106 tonnes of coal
and 776-93 x 103 tonnes of oil.

All impacts of fossil fuels from exploration, supply to comsumption were taken into account in
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PDP VII in order to propose optimal mitigation measures. For examples, domestic supply of
primary energy was analyzed in PDP VII as part of the preparation of an appropriate source
energy development plan. The results show that the most effective approach to achieve efficient
use of natural resources involves development of renewable energy to reduce the number of
coal-fired thermal power plants that would consequently lead to reductions in coal demand.

Energy Demand Forecast for the period 2011-2030 based on National Energy Reserve

a. Coal Reserve:

Exploration results by 1 May 2005 show that the coal reserve is about 6,140 billion tonnes. The
Quang Ninh coal tank is the biggest in Vietnam. This area has been discovered and mined since
the French colonial time. Presently most mining activities in the country are in this area and it will
be this way in the future (mining in Quang Ninh accounts for 90% of productivity of the whole
sector). The three mining areas in Quang Ninh have a coal reserve of class A+B+C1+C2,
accounting for 67 % of the national coal reserve.

There are other smaller coal mines in Hai Phong, Bac Giang, Thai Nguyen, Son La, Lai Chau,
Quang Binh, and Quang Nam, producing from several thousand to several ten thousand tonnes
each.

According to the adjusted development plan of the coal sector, “clean” coal mining productivity
until 2025 will be as presented in table below.

Table 2.10. Coal Productivity to 2025 and Estimate in 2030

Year 2005 2010 2015 2020 2025 2030 (*)

Coal mining productivity 34.1 49.8 60-65 70-75 > 80 (95-110) > 100 (120-130)
(million tonnes)
Source: Adjusted Coal Sector Development Plan in Vietnam 2006-2015 and estimates to 2025; (*): estimate

Mining in the Red River coal tank is expected to start after 2015 with relatively low productivity
compared with its potential.

The figures above show that domestic supply of coal for electricity production will start to fall
under the demand from 2015. By 2025 domestic coal supply will be 30 million tonnes under the
demand and by 2030 it will be 120 million tonnes. Electricity production will have to rely on
imported coal.

b. Assessment of Crude Oil and Gas Production

According to the most recent evaluation, Vietnam has a crude oil and gas reserve of about between
3.8 and 4.2 billion tonnes of oil equivalent (TOE). Most of the oil can be found in the continental
shelf (about 1.05 – 1.14 tonnes of oil equivalent, 60% of which is gas). Most oil wells are located
at the Mekong oil field (Southeast continental shelf). Most natural gas can be found scattering in
the Nam Con Son, Ma Lay – Tho Chu and Red River area.

Deepwater sediment pits in Phu Khanh and Tu Chinh and other sediment pits in the Mekong
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Delta and in the lowland area in Hanoi were assessed as having oil and gas potential but this has
not been confirmed. Oil and gas potential of Vietnam is assessed as at medium level in South
East Asia, which is lower than Indonesia and Malaysia but higher than the rest of the other
countries.

According to the oil and gas sector development strategy, average raw oil production in Vietnam
is at 19 million tonnes per year. Vietnam at the moment still imports 2-4 million tonnes of crude
oil per year. In the base scenario and the high scenario, between 2010 and 2020, crude oil
production in Vietnam will decrease to between 16 and 17 tonnes per annum and imported oil
will be around 6 to 8 million tonnes per annum.

The table below presents forecast figures of crude oil production from now to 2025.

Table 2.11. Crude Oil Production Plan until 202517

Year 2005 2010 2015 2020 2025

Base PA (106 tonnes) 18.5 19.86 20.0 20.7 21.7

Domestic supply (106 tonnes) 18.5 19.16 17.0 16.3 16.2

Gas exploration is accelerating. According to the oil and gas sector development strategy, 10.7-
18 billion m3 of oil can be harvested between 2021 and 2025. A plan for gas production is
presented in the table below.
Table 2.12. Gas Production Plan until 202518

Year 2008 2010 2015 2020 2025

Base PA / High PA (billion m3) 7.12 7.98 13.16-13.36 14.8-20.3 10.7-18

Estimates for oil and gas production after 2025 will be at about 20 million tonnes of oil and 11
billion m3 of gas.

c. Assessment of Hydropower Potential

According to the assessment in the national research KHCN 09 “Development of Sustainable

Energy Strategy and Policy”, Vietnam has a hydropower potential of 123 billion kWh,
equivalent to a 31,000 MW station capacity. Taking into consideration the economic, social and
environmental impacts, this figure should be at between 75 and 80 billion kWh, equivalent to
18.000-20.000 MW.

17
According to “Vietnam oil and gas sector development strategy until 2015 with direction to 2025”, 2008
18
According to “Vietnam oil and gas sector development strategy until 2015 with direction to 2025”, 2008 181
Table 2.13. Hydropower Potential in Vietnam

Capacity Productivity Density

River Basin
(MW) (TWh) (MWh/km2) (%)
1 Lo - Gam – Chay River 1,120 4.10 212 4.
2 Da River 6,960 26.96 1,400 9
32.3
3 Ma River 890 3.37 74 4.
4 Ca River 520 2.09 147 0
2.
5 Vu Gia-Thu Bon River 1,360 5.10 475 5
6.
6 Tra Khuc-Huong River 480 2.13 531 1
2.
7 Ba River 670 2.7 150 6
3.
8 Se San River 1,980 9.36 700 2
11.2
9 Srepok River 700 3.32 143 4.
10 Dong Nai River 2,870 11.64 436 0
14.0
Total 10 River Basins 17,550 70.77 423 84.8
chính
Nation-wide 20,560 83.42 250 10
0
The potential value of hydropower development in the 10 main river basins accounts for 85.9% of
the nation-wide value. Potential hydropower production capcity of these river basins is 17,550
MW, equivalent to about 71 billion kWh, of which 9,056 MW will be produced in the North
(51.6%), 5,598 MW will be produced in the Centre (31.9%), and 2,896 MW will be produced in
the South (16.5%). By 2020, Vietnam is expected to produce up to 84% of its potential
hydropower production, which is over 72 billion kWh.

A considerable part of hydropower production of Vietnam comes from small hydropower plants
with capacity of less than 10 MW per plant. According to the most recent plans and assessments,
potential capcity and productivity are estimated at over 4,000 MW and 16.4 billion kWh,
respectively. However, some of the small hydropower plants are planned to be in locations far
away from residential centres where the most electricity is consumed. These plants will not be in
operation immediately but are included as part of the economic social development plan for the
areas.

In 2007, the Japan International Cooperation Agency (JICA) in collaboration with Vietnamese
experts completed a plan for pumped-storage hydropower development in Vietnam. This plan
identified 10 locations suitable for pumped-storage hydropower development with station capacity
of between 400 and 1000 MW each in all three regions in the country but mostly in the North.
Estimated total capcity of pumped-storage hydropower is about over 10,000 MW.

d. Assessment of Renewable Energy Potential:

- Wind and solar energy

Vietnam has on the average between 200 and 2,500 hours of sun in a year with a high level of solar
raditation of about between 100 and 175 Kcal/cm2 per annum. The cost of solar power
development is very high at about 7,500-8,500 USD/kWp. In 2005, solar power production in
Vietnam is at about 1,150 kWp. According to statistics from the Department of
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Hydrometeorology, the annual average solar radiation is higher and more stable through out the
year in the Central Highland, the Central Coast and the South than in the North of Vietnam. This
means the cost of solar power development in the North will be higher than that in the South of
Vietnam. Solar power systems in the North also need to have higher capacity to make up for the
cloudy winter months.

As a tropical country with seasonal winds with more than 3,000 km of coastline, Vietnam is
considered a country with wind energy potential. To date, there have been several studies about
wind energy potential of Vietnam. The most recent study is the “Wind Energy for Electricity
Production Plan” by EVN (2005-2006). According to this study, wind energy in Vietnam can
potentially produce 1,785 MW of electricity, of which 880 MW can be produced in Quang Binh
and Binh Dinh, and 855 MW can be produced in the southern part of the country, mostly from
Ninh Thuan and Binh Thuan.

Although Vietnam has potential in terms of wind and solar energy, the practicality of power
development using wind and solar energy is assessed as not high because areas with wind energy
tend to have complicated landscape and the wind pattern can change dramatically even between
day and night. This means the productivity of wind and solar energy equipment can be low. Study
results show that electricity production from wind energy could only be at between 400 and 600
MW in 2025 if investment was made to develop power production from wind energy. Lessons from
countries with experiences in power production using wind energy show that if the wind energy is
unstable and seasonal the unit cost of electricity produced from wind energy will be much higher
than from other forms of power production.

It is also very costly to produce solar power and to maintain solar energy equipment. Even in
Japan, a country that imports more than 95% of the energy it consumes and a leading country in
solar energy technology, only 465 MW of the electricity produced comes from solar energy.
Therefore, it is very challenging for Vietnam to develop power production from renewable
energy in large scale to balance out its reliance on other source energies in the future. Vietnam
could capture a wind and solar energy level equivalent to about 494,000 tonnes of oil in 2030,
59% of which would be use for electricity generation and 41% will be used for consumption in
commercial activities and residential areas.

- Biomass

There are many kinds of biomass in Vietnam that can be effectively used as fuels for power
production. The two main types of biomass are fuel wood and waste product from agricultural
crops. Vietnam has very big biomass resources: biomass of agricultural bi-product only is over 70
million tonnes, which is about nearly 20 million tonnes of oil equivalent. Assessment and analysis
show that in short term large quantities of biomass should be used for power generation. The four
main sources of biomass in Vietnam are rice husk from husking factories, bagasse from sugar
factories, coffee bean husk from coffee factories (mainly from four provinces in the Central
Highlands), and wood pellet from sawmilling factories. Total biomass resource in Vietnam can be
up to 9.4 million tonnes of oil equivalent in 2030, of which 0.7 percent would be used for
electricity generation.

Evaluation of Uranium Reserve and Uranium Mining Potential of Vietnam

183
The Vietnam Geology Federation 10 has been conducting studies about the uranium reserve in
Vietnam. Their study results in December 2004 showed that the total uranium reserve in Vietnam
was about 254,000 tonnes of triuranium oxtoxide (U3O8 ) of which the U3O8 content is higher
than 0.015. Most uranium mines in Vietnam are quite small with low to very low uranium
concentration. To date there has not been detailed and adequate evaluation of uranium availability in
Vietnam.

From now until 2020, there needs to be proper uranium exploration and research to gather reliable
data for the development of a plan for nuclear power development in Vietnam.

Fuel production for nuclear power development is a very complicated process which requires
high technologies. Vietnam is unlikely to be in the position of producing fuel for nuclear power
plants by 2020. However, it is necessary to have a plan so that in a few decades Vietnam can be a
few steps closer to producing fuel for nuclear power plants.

Forecast of energy demand increase: According to the high economic growth scenario, energy
demand in Vietnam will be 93/98 million TOE in 2020 and 165/188 million TOE in 2030.

According to the base scenario, energy consumption in 2020 will be 19.4% of coal, 37% of oil
products, 26.9% of electricity, 1.5% of gas and 15.1% of renewable energy. Also in this scenario,
in 2020, 38.1% of the energy will be consumed in the industry sector, 32.5% in home use and
service sector, 27.1% in transportation, 0.9% in agriculture, and 0.8% in the energy-free sectors.

The table below gives details about energy demand forecast for each energy type in the three
proposed scenarios.

Table 2.14. Energy Demand Forecast for the Period up to 2030 by Energy Type
Unit: million TOE

Year 2010 2015 2020 2025 2030

Base High Base High Base High Base High

Coal 9,547 13,607 13,897 17,997 18,873 23,608 25,812 29,974 34,197

Electricity 7,539 14,605 15,848 24,930 27,392 37,055 42,495 52,908 63,462

Oil product 15,770 23,472 23,904 34,434 35,855 48,231 51,939 66,959 74,753

Gas 654 1,006 1,030 1,419 1,495 1,968 2,173 2,593 3,007

Non-commercial 14,695 14,474 14,719 14,044 14,328 13,272 13,600 12,443 12,804
energy
Total 48,205 67,163 69,398 92,824 97,943 124,134 136,018 164,877 188,223

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The table below shows figures of commercial energy consumption per person in the period 2005-
2030.

Table 2.15. Average commercial energy consumption per person

Year 2005 2008 2010 2020 2030

Average per person commercial energy

consumption (kgoe/person/year) – (Base - 265 331 386 821-871 1488-1713
High)

In 2010, the average commercial energy consumption per person in Vietnam is still lower than
that in China in 1990, which is 408 kgoe/person/year. In 2020, the average commercial energy
consumption per person in Vietnam will be 786 kgoe/person/year, same as that in China in
2010. In 2030, this figure in Vietnam will be 1,490 kgoe/person/year, same as that in Malaysia
in 2005.

Energy demand forecast for Vietnam was done for the period between 2008 and 2030. The
calculation is based on the type of energy and by economic sector.

The calculation of power demand as aboved has taken into account factors that might affect the
energy demand in medium and long term such as changes to the economic structure,
urbanization that shifts energy demand amongst people from one form to another, fast
development in science and technology, and the shift in economic structure from traditional
production such as steel, cement and fertilizer, etc., to “smokeless” industries such as
information technology, microprocessing, biological industries and agriculture, etc., that
contribute to reductions in energy demand.

Vietnam is currently at the early stage of industrialization and modernization in economic

development. There are many economic sectors that are still under-developed. Energy
consumption in Vietnam is also lower than in many other countries in the region. Therefore,
energy demand forecast shows that during the period from now until 2015 energy demand will
still increase and it will start decreasing after 2015.

Balancing national energy demand - supply

Based on the final energy demand forecast in the base scenario and evaluations of natural
resources potential it is possible to see how much primary energy that comes from domestic
supply and how much of the natural resource will be used in each period.

185
Table 2.16. Total Energy Demand and Primary Energy Supply in Base Scenario
Energy type 2010 2015 2020 2030
Unit Unit Unit Unit
KTOE KTOE KTOE KTOE
Primary energy 61123 91675 148786 256691
demand
Domestic supply
76889 89402 96172 113387
Including:
Coal 49.8 mil. 27888 60 mil. 31680 70 mil. 34562 120 mil. 55932
tonnes tonnes tonnes tonnes
Oil products 19.86 mil. 20217 20 mil. 20360 20.7 mil. 21073 20 mil. 20360
tonnes tonnes tonnes tonnes
Gas 11.43 12.68
7.98 bil. 7183 bil. m3 10288 bil. m3 11413 10 bil. 9000
m3 m3
Hydropower 30.13 TWh 6478 54.4 TWh 11695 60,4TWh 12994 58,2TWh 12523
Small hydropower 1.99 TWh 428 4.2 TWh 905 6,46TWh 1391 9,12TWh 1961
Renewable energy 41.2
44.5 mil. 14695 43.8 mil. 14474 44.6 mil. 14740 mil. 13610
tonnes tonnes tonnes tonnes

Surplus (+) Deficit (-) +15766 -2273 -52614 -143304

Figures in Table 2.23 show that domestic supply of primary energy is always higher than
demand in the period from now until 2015. Vietnam can export its surplus primary energy
during this period. According to the base scenario, primary energy deficit in 2020 is 53 million
TOE and in 2030 is 143 million TOE. If there is no new primary energy source to make up for
this deficit, Vietnam will have to import 36% of primary energy for consumption in 2020 and
57% in 2030 and increasing in the subsequent years. There is an urgent need for solutions to
preserve primary energy in the country, which requires collaboration efforts from all sectors
and overall direction from the government. It is most important that these start immediately.

Apart from that, the construction of power plants uses large quantities of soil and rock and
thermal power plants use a lot of fresh water and limestone every year. This means a challenge
in preserving these natural resources.

It is necessary to assess forest resources and propose forest conservation and development
measures in areas surrounding hydropower projects and in upstream forests to increase
protection of water sources for reservoirs.

To protect water resources, PDP VII also considered and proposed several power plants of
medium rather than big capacity in areas that are prone to drought. For example, the capacity
of the Binh Dinh thermal power plant needs to adjust its capacity from 4,400 MW to under
2,400 MW due to the serious lack of surface water in this area.

3.3.6. Climate Change

3.3.6.1. Greenhouse Gases
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a. From Rreservoirs

Greenhouse gases (carbon dioxide and methane) are released into the atmosphere from
reservoirs that flood forests and other biomass, either slowly (as flooded organic matter
decomposes) or rapidly (if the forest is cut and burned before reservoir filling). Many
hydropower reservoirs actually flood relatively little forest or biomass. Most hydropower
plants generate sufficient electricity to offset the greenhouse gases, which would otherwise
have been produced by burning fossil fuels (natural gas, fuel oil, or coal) in thermal power
plants.
However, some projects which flood extensive forest areas, such as the Balbina Dam in
Amazonian Brazil, appear to emit greenhouse gases in greater amounts than would be
produced by burning natural gas for many years of comparable electricity generation.
Greenhouse gas releases from reservoirs can be reduced by a thorough salvage of commercial
timber and fuelwood, although frequently this does not happen because of (a) high extraction
and transportation costs, (b) marketing constraints, or (c) political and economic pressures not
to delay reservoir filling. The surest way to minimize greenhouse gas releases from reservoirs
is to choose dam sites that minimize the flooding of land in general, and forests in particular.
According to the calculation in PDP VII, average releases of CO2 from reservoirs are
6.65kg/ha/day, whilst those of CH4 are 0.1kg/ha/day. With a total reservoir area of 25,133 ha for
the 21 reservoirs, this would mean a total of 61,000 tonnes of CO2/year and 917 tonnes of
CH4/year.

b. From Fuel Combustion Process in Thermal Power Plants

Through out the whole period that PDP VII is implemented, the release of CO2 increases from
just below 60 million tonnes in 2011 to nearly 444 million tonnes in 2030: nearly an eight-fold
increase.

In terms of economic value, the costs of climate change impact are estimated at US$1.2 billion in
2011 and rising to over US$9 billion by 2030. The calculation is based on the environmental
costs of main pollutants specified in the report “Valuation of Some Environmental Costs within
the GMS Energy Sector Strategy” by Mans Nilson, the Stockholm Environment Institute. The
impacts considered for this calculation are: (i) impacts on health that lead to life expectancy loss
and other health issues such as respiratory and lung problems, etc., that cause income loss; (ii)
hospital costs; (iii) loss of crop yields; and (iv) impacts on the infrastructure and acidification of
soil.
3.3.6.2. Impacts of Climate Change

Greenhouse gases cause global climate change. Forecast shows that Vietnam will release a
considerable amount of greenhouse gases (444 million tonnes) in 2030, which will contribute to
increase the risk of global climate change.
Viet Nam is classified by the IPCC as one of the most vulnerable countries in the world to
climate change impacts. The long, densely-populated coastline and delta areas (Red River Delta
and Mekong Delta) are where half of the country’s population live and where and the most
important agricultural production areas are. These areas are particularly vulnerable to the impacts
187
of climate change, especially to the impacts of rising sea water level, and other impacts such as
chages to the weather, rainfall and river flows.

Similarly, the mountainous upstream areas where some of the poorest communities live are also
vulnerable to the impacts of climate change. These communities mainly rely on agricultural
production and changes to the rainfall patterns as the result of climate change will affect these
communities. These and other widespread effects mean that climate change could jeopardize the
development gains that Viet Nam has experienced in recent decades.
The impacts of global climate change show in abnormal natural phenomena that can be felt by any
one. According to the World Development Report 2010 by the World Bank, climate change is
making the world warmer, changing rainfall patterns and making negative events such as drought,
flood and forest fire more frequent. These impacts pose threats to many countries, in which
developing countries are most vulnerable. It is estimated that developing coun- tries will bear
most of the costs of the damages—some 75–80 percent. Warming of 2°C could result in a 4 to
5 percent permanent reduction in annual income per capita in Africa and South Asia, as
opposed to minimal losses in high-income countries and a global average GDP loss of about
1 percent. Most developing countries, including Vietnam, lack of financial and technical
capacity to manage the risks of increased climate change. These countries are reliant on natural
resources to generate income and assets and most of these countries are starting to suffer from
dramatic climate changes.
Human-induced climate change gives ecosystems and societies little time to adapt. Such a drastic
change would cause large dislocations in ecosystems fundamental to human societies and
economies – such as the possible dieback of the Amazon rain forest, complete loss of glaciers in
the Andes and the Himalayas, and rapid ocean acidification leading to disruption of marine
ecosystems and death of coral reefs. The speed and magnitude of change could condemn more
than 50% of species to extinction. Sea level could rise by one meter this century, threatening
more than 60 million people and $200 billion in assets in developing countries alone.
Agricultural productivity would likely decline through-out the world, particularly in the
tropics, and over 3 million additional people could die from malnutrition each year.
There are about 40 million people living along the coast and low-lying islands in Vietnam, who
are reliant on agriculture for income. As pressures on land, water, and forest resources increase -
as a result of population growth, urbanization, and environmental degradation caused by rapid
industrialization - greater variability and extremes will complicate their management. In the
Mekong River basin, the rainy season will see more intense precipitation, while the dry season
lengthens by two months. The South East Asia region’s economies, including the economy of
Vietnam, are highly dependent on marine resources – the value of well-managed coral reefs is
US$13 billion – which are already stressed by industrial pollution, coastal development,
overfishing, and runoff of agricultural pesticides and nutrients.
The calculated costs associated with climate change impacts, based on international norms per
tonne of CO2 released, is estimated at US$1.2 billion in 2011 and rising to over US$9 billion by
2030. The impacts of greenhouse gas emissions represent a significant part of the full economic
costs of the power generation proposals set out on PDP VII.
Economic growth alone is unlikely to be fast or equitable enough to cope with the risks of 188
climate
change, especially when the economic growth is carbon intensive. This is the key environmental
issue that was assessed in SEA and considered in all scenarios proposed in PDP VII.

3.3.7. Energy Security

Energy security is currently an extremely important issue in both developing and developed
countries. Energy security is often associated with sustainability and economic development.
Energy security is much reliant on oil, which is currently a limited resource.

According to the energy sector’s development plans, Vietnam is currently exporting crude oil
and coal but importing large quanities oil and petrol of up to tens of million tonnes. Vietnam will
start to import coal after 2015 and gas after 2017. Vietnam is currently importing electricity.
This means energy security in Vietnam needs special attention from all government sectors and
departments at all levels. The base scenario shows that in a near future the electricity sector will
rely heavily on imported fuels such as coal and gas in terms of both availability and price. The
world’s energy price has been in crisis recently. Vietnam is also dependent on imported
electricity from neighboring countries. This means unstability for the young economy of
Vietnam and for domestic electricity supply.

The issue of energy security is in discussion not only to raise awareness amongst policy makers
but also to establish a basis for recommendations concerning the government’s regulating role in
energy security. It is recommended that the government review and issue policies to encourage
appropriate exploration and use of domestic energy for both immediate economic growth and
national long term benefit.

It is also recommended that every sector should develop an energy security plan. In the energy
security plan of the electricity sector, the use of renewable energy is recommended along side with
energy saving and efficiency in production, and further research on nuclear power development.

3.3.8. Environmental Conflicts, Risks and Accidents

3.3.8.1. Environmental Conflicts over Shared Resources

The proposed power development plan shows that there will be increasing environmental conflicts
in terms of water resources, fuels, natural resources, land resources and land use. It is necessary to
develop preventative measures and solutions in case these conflicts happen during the
implementation of PDP VII.

Environmental conflicts might happen due to unpredictable reasons and usually result in serious
loss both of life and assests, and long term impacts on the environment. There are risk of
abnormal weather phenomena and accidents during the construction and operation phases of
power projects.

3.3.8.2. Unpredictable Environmental Risks and Accidents

a. Climate Change

Fossil fuel-combustion power production releases greenhouse gases that contribute to climate
change and its impacts such as drought, flood, rising sea level and temperature. Climate change is
189
a global issue. Developed countries are major contributors to climate change due to their large
energy consumption, however, developing countries, such as Vietnam, are the most vulnerable
to climate change. Apart from direct impacts on human and assets, climate change also threatens
food security as it results in lower productivity and loss of crop yields.

Climate change causes global warming and increased sea water level, which result in the
following impacts on thermal power plants:

- Lower cooling effect that leads to lower productivity of the turbines and higher fuel
consumption
- Lower efficiency of the air turbines
- Power stations near the coast and river mouth need to elevate in response to increased
water level. This feature is incoperated in all designs of new power plants.
b. Hurricanes, Cyclones, Tsunami, Earthquarkes, Subsidence, Tectonic Breaks, and
Increased Temperature

These are unpredictable natural events that usually result in heavy consequences for the economy
and people’s life. Power project designs need to take into account the risks of these events to
ensure safety and contingency plans for such natural events are in place. For hydropower projects
it is important to ensure dam safety and appropriate water release management. For thermal power
projects, attention should be paid to coal ash storage management in case these events happen. For
nuclear power projects it is extremely important to consider these risks in the design of the
power station to guarantee safety.
Lessons learnt from events of natural disaster can be drawn from the historical floods in Vietnam
in 2009 and 2010 as described in Chapter 2. Nuclear disaster event following the tsunami in
Fukushima is a lesson for nuclear power development.
c. Human-induced Environmental Risks and Accidents

+ Erosion, landslides, and changes to hydrological regimes

The construction of power plants and associated infrastructure often cause:

(1) Erosion and landslides due to impacts on the land surface structure and vegetation
clearing;
(2) River-edge and coastal erosion due to construction on riversides and coastal areas that
result in changes to hydrological regime.

(3) The construction of dams and water regultion regimes of reservoirs alter river flows and
result in changes to hydrological regimes. The impacts are aquatic ecosystem imbalance,
desiccation and salt intrusion in lower river basins.
Power projects also affect the water level in reservoirs, river flows and river transportation, etc.,
causing serious impacts on river ecosystems and production activities in lower river basins.
Over time, live storage and power generation are reduced by reservoir sedimentation, such that
much of some projects’ hydroelectric energy might not be renewable over the long term. If
190
effectively implemented, watershed management can minimize sedimentation and extend a
reservoir’s useful physical life, through the control of forestry, road construction, mining,
agriculture, and other land use in the upper catchment area. Protected areas are sometimes
established in upper catchments to reduce sediment flows into reservoirs, as in the proposed Nam
Theun II (Laos) project. Aside from watershed management, other sediment management
techniques for hydroelectric reservoirs may at times be physically and economically feasible;
they include, among others, upstream check structures, protecting dam outlets, reservoir flushing,
mechanical removal, and increasing the dam’s height. The problem is that waters after running
through turbines often carry sediments and might increase river floor wash-off and river-edge
erosion. Waters are often released from turbines very quickly and therefore tend to cause erosion
of the river floor and river-edge.
+ Workplace and fire safety

Many workplace accidents can happen during the construction and operation of a power project
such as fall, electric shock, chemical explosion, transfomer/boiler/oil pipeline explosion, oil/coal
storage fire, etc. The impacts and losses of these accidents are usually big and unforeseeable.
However, these impacts can be mitigated by having strict technical requirements, procedures and
regulations, which are the prerequisite for an industrial facility.
+ Radioactive contamination

Radioactive contamination happens when nuclear accidents occur as the result of leaks in nuclear
protection layers, geological instabilities or human-induced impacts. Whatever the cause is,
radioactive contamination is an environmental disaster should it happen.

+ Traffic accident

When a project is being implemented the level of traffic in the project site will increase as fuel
and other products need to be transported to the station for power production and workers and
clients travel to the project site for work and business transactions. It is possible that both road
traffic and river traffic will increase, causing air/noise pollution and traffic jams that affect local
residents and possibly more traffic accidents. Should these accidents occur, the environmental
impacts would be significant, especially if the accidents involve oil or waste transporting
vehicles.

+ Disaster vulnerability

The hazardous nature of nuclear power facilities means that they must be sited and constructed to
reduce or remove any possible risks associated with natural disasters. The coastal areas of
Central Viet Nam, in which the planned nuclear power plants will be built, are particularly
vulnerable to cyclones as an expected consequence of climate change and sea level rise. This
region is also tectonically active. It is essential that the design and construction of the nuclear
facilities take into account the need to plan for the increase of frequency and severity of cyclones,
rising sea levels and of the possibility of earthquakes and tsunami in the future.

There are many other environmental risks and accidents that are not foreseeable.

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3.3.9. Social Impacts and Resettlement
3.3.9.1. Hydropower Impacts on the Economy, Society and Local Communities

a. Reservoir area

A total of 61,571 people would be displaced if all 21 schemes are constructed (of which 259,142
people have been displaced for the on-going projects). The numer of displaced people varies
from scheme to scheme (see Appendix 2). Seven of the 21 schemes would require little or no
resettlement and a further three have 650 or less people, whilst Ba Me would result in the
displacement of 10,700 people and Ban Chat of 14,800 people. The Huoi Quang and Lai Chau
schemes would result in 7,000 displaced people each.
The four schemes with more than 7,000 displaced people (Ban Chat, Bac Me, Huoi Quang and
Lai Chau) would result in over 41,000 displaced people, or two-thirds of the total. These schemes
require special attention with regard to the resettlement issue. Over 90% of the displaced people
are ethnic minorities with a poverty rate well above double the national average. These people are
highly dependent on access to natural resources (including forests) for their livelihoods and a
close connection to where they live is an integral part of their cultural identity.

These communities are highly vulnerable to disruption to the lives and livelihoods from
resettlement. Chapter 2 of this report analyses in details resettlement issues of power
development projects in PDP VI. Power development projects in PDP VII are likely to result in
poverty in displaced communities unless proactive actions are taken. International practice19
shows that the proposed mitigation package is intended to provide the means for displaced people
to establish in a new location, to gain access to adequate services and reconstruct their
livelihoods. In other words, the proposed mitigation package, which incorporates international
practice, includes and reflects the necessary conditions of the new location.

Assessment of the social impacts and impacts on livelihoods is based on the Impoverishment
Risk and Reconstruction (IRR) model developed by Micheal Cernea for the World Bank. This
model demonstrates international best practice in resettlement as it reflects risk factors, which
have not been adequately accounted for in existing social impact assessment approaches, to
propose appropriate mitigation measures. This model is especially suitable for long-term
development plan such as SEA. The compensation package includes an additional amount to
support the development of displaced communities within ten years (from the time of
displacement until communities gain access to adequate services and reconstruct livelihoods at
the same level as before their displacement). It is estimated that the additional items would add an
additional 23% to the cost of the existing compensation package. The full compensation package
does not compromise the economic viability of any of the schemes.

The main risks of resettlement and mitigation measures for each of these risks are presented in
Table 3.17.

19
Cernea, M. (2000) Impoverishment, Risk and Reconstruction: A Model for Population Displacement and
Resettlement in Cernea, M. & McDowell, C. (eds 2000) Risk and Reconstruction: Experiences of Resettlers and
Refugees World Bank, Washington D.C. 192
The awareness of this wide range of risks is a key issue in sustainable and responsible
hydropower planning and the package of mitigation measures that are provided in response to
the risks must reflect the scope and severity of potential impacts. This is discussed in further
detail in the SEA of PDP VI, where a proposal for a mitigation package based on the IRR model
is outlined. One of the virtues of the IRR model is that it reflects risk factors such as the long-
term impacts on the health of displaced communities that have not been adequately accounted
for in existing social impact assessment approaches in Viet Nam (and many other countries). The
model consequently provides an international good practice reference point for assessing the
risks of impacts and the mitigation measures necessary to ensure that displaced people are
adequately taken care of in the hydropower development process.

b. Zone of Influence

The approach used a GIS system to calculate the Zone of Influence for each scheme, based on a
ratio of distance and altitute to relflect the ‘cost of access’ to the resources from the dam point.
The Zone of Influence of one project is different from the Zone of Influence of a cluster of
projects. This shows in the example of one ZoI, a cluster of ZoIs in the Central Highland and two
adjacent ZoIs in the Centre. Impacts on land use and resident population of each ZoI are
assessed based on data about land use and population density at district level and other main
socio-economic information collected from the Vietnam population map.
The land-use and population of each ZoI was calculated and the land use data was used to
calculate the overall values of the main natural resources within the ZoI (see Appendix 3).
Hydropower impacts were then estimated based on the judgment of the likely change
(increase/decrease) in the resource values of the different land-use types that are a result of
hydropower development. Where possible, these impacts were assigned an economic value.
Where this was not possible then the severity of impacts were assessed on a scale ranging from
low to severe.
Table 3.17. IRR Model for Displaced People from ZoIs
Type of Risk Likelihood and Intensity of Risk in Hydropower Schemes in Viet Nam
Landlessness Low: most displaced households own and farm land in the reservoir area
and they will be compensated but statistics show that the number of
displaced households is not high in most of the projects.
Joblessness Low/positive potential: no evidence of job loss and there are potential
employment opportunities for local people, especially during the
construction period.
Homelessness Zero: no evidence of any household losing their existing home aside from
households who are resettled.
Marginalization Medium/Low: the high incidence of ethnic minorities and the
dangers of social and cultural disruption present risks of social
marginalization in some cases, especially in communities adjacent to
construction sites

193
Increased Medium/Low: existing morbidity levels are relatively high and the
morbidity disruption in access to services and health facilities will increase these risks
unless appropriate remedial actions are taken.

Food Insecurity Low/Medium/likely to change in positive direction: some communities in

the ZoIs will experience food insecurity for other reasons than reduced
access to forest foods. This issue should be balanced with increased
agricultural production thanks to impoved access to the market
Loss of access to Medium/High: the construction of dams and other facilities, such as roads,
Common Property might reduce forest area and quality of the forests in ZoIs and also might
Resources have serious impacts on aquaculture resources.

Social Medium/High: this varies according to the social characteristics of both the
Disarticulation host community in the resettlement area and the relocated communities.

The social impacts in the ZoI are assessed in relation to the impacts of changes in access to
natural resources and to external markets on the livelihoods of resident populations. The main
risks have been assessed as being where increased population and reduced forest resources
would result in unsustainable pressure on remaining forests.
Balanced against this risk is the likely increase in agricultural incomes, with studies in Viet Nam
showing that income per hectare of agricultural land increases by an average of 10% where
upland areas are connected to markets through improved transport facilities.

Below is further analysis of potential social and cultural impacts on local communities:
Calculated economic benefit from appropriate use of water resources: As analyses in this
section show there are potential non-power benefits such as irrigated agriculture and flood
control. It should however be noted that any changes in the reservoir operation to carter for other
water users could imply decreased energy production and thus less power benefits.

If all 21 projects are built, the highest impacts would be found. The improvements to dry season
water flows would allow over 25,000 extra hectares to be irrigated, producing a yield of over
150,000 tonnes of rice and generating an income of over $90 million.

3.3.9.2. Thermal Power Impacts on the Economy, Society and Local Communities
Socio-economic impacts of thermal power development include the displacement of people
living on the site of the planned power station. The costs of this impact by thermal power plants
have been included in the project costs for compensation. Study results of the socio-economic
impacts of several big thermal power projects have confirmed this assessment.

There are social and environmental costs in addition to atmospheric pollution from thermal
power generation. These include the displacement of people living on the site of the planned
power station. Existing data from 14 thermal power plants in PDP VII have been collected for
assessment. The exact numbers of displaced people are unknown because some projects are still
in the planning phase but some cost estimates have been included, based on existing regulations.
194
In general, costs for thermal power development has three main components:

- Compensation costs for the loss of land and assets (such as homes).

- Resettlement costs such as infrastructure and housing development in resettlement area.

- Supporting costs such as rice support for the initial moving period or change of jobs etc.

These compensation and resettlement costs mostly include short-term and quantifiable costs such
as construction of houses, infrastructure, roads and irrigation development. Long-term and
unquantifiable costs such as for culture, health care, and livelihoods support are usually not
included in the calculation. There is a need for long-term development plans to help displaced
people to re-establish their life and livelihoods. These plans should ensure that after
resettlement displaced people have a better life (in terms of finance, livelihood and health care)
whilst having their cultural structures preserved. Therefore, the following items are proposed to
be included in the resettlement package:

1. Establishment of a health care center with adequate infrastructure and equipment for every
project that displaces more than 100 households.

2. An additional item of “infrastructure maintenance”, which is 7% of the infrastructure

construction cost, which is what has been done in 135 Program.

3. An additional item of “community development fund”, which is about 10 million

VND/household. This fund will be used and maintained after the resettlement as a micro
finance fund or in any form according to the needs of the people.

4. An additional item of “further training”: it is envisaged that each household need 15

training courses in 10 years (2 courses/household/year for the first 5 years and 1
course/household/year for the following 5 years).

5. An additional item of “health care and sanitation education”: this activity should be for all
displaced households. The plan is that each household will have 5 training courses in the first
5 years of resettlement.

6. An additional item of “rice support”: this is in accordance with the Prime Minister’s Decision
No.34/2010/QD-TTg dated 08 April 2010 regarding resettlement costs for irrigation and
hydropower projects. According to this decision, each displaced person receives 30 kg of rice
every month for three years after the resettlement if this person loses 75% of production land
and for four years after the resettlement if this person loses all of production land.

7. An additional item of support for “resettlement supporting group”: each group of three people
for one village/resettlement group to help people re-establish their life in the resettlement
area. These groups will be active in the first five years of the resettlement.

Based on the above proposals, the total compensation and social mitigation cost for 6 thermal
power plants (Mao Khe, Hai Duong, Van Phong, Quang Trach, Long An and Thang Long) was
recalculated. This new calculation introduces an increase of 9% compared with the original195
cost.
The table below presents changes to the resettlement package for the 14 thermal power plants:

Table 3.18 Changes to Rsettlement Costs of 14 Thermal Power Plants

Unit: VND

No. Power Plant Original Resettlement Cost Adjusted Resettlement Cost

60,304,000,000
1 Mao Khe 65,731,360,000

2 Thang Long 14,370,650,000 15,664,008,500

3 Long An 39,673,000,000 43,243,570,000

4 Thai Binh 130,721,606,000 142,486,550,540

5 Hai Dương 255,615,000,000 278,620,350,000

6 Nam Đinh 595,642,297,757 649,250,104,555

7 Quang Trach 509,504,436,672 555,359,835,972

8 Van Phong 115,868,780,160 126,296,970,374

9 Vinh Tan 52,972,492,888 57,740,017,248

10 Duyên Hai 65,476,945,656 71,369,870,765

11 Song Hau 570,522,000,000 621,868,980,000

12 Binh Đinh 305,320,980,000 332,799,868,200

13 Vung Ang 3 457,263,810 498,417,553

14 Mong Dương 1,660,000,000 1,809,400,000

Total (VND) 2,718,109,452,943 2,962,739,303,708

Total (USD) 139,390,228 151,935,349

3.3.9.3. Nuclear Power Impacts on the Economy, Society and Local Communities
The SEA of nuclear power plant siting recognizes a few big socio-economic impacts on
communities living nearby the project sites. These are impacts on displaced communities, which
is only 704 households in two nuclear power projects that are being implemented, and on the
livelihoods of local residents. Economic impacts are mainly found in aquaculture due to cooling
water releases rather than other pollutants. These impacts can be mitigated through calculation of
economic value loss from aquaculture production and spawning ground. Compensation for these
impacts was calculated and included in the feasibility studies of both projects. The total amount
196
of compensation for both projects is about 700 billion VND.

There are other concerns about impacts on other economic activities such as tourism, which is an
important activity for coastal areas, and agriculture. The first and foremost concerns of local
people about nuclear power development are impacts on the environment and human health and
other risks of nuclear accidents. Lessons learnt from the Fukushima nuclear power plant in Japan
show that nuclear power disaster is big and often have long-term impacts, which are hard to
evaluate.

The SEA of nuclear power plant siting also shows that all provinces (accept for Ninh Thuan)
support the idea of nuclear power development but disapprove nuclear power plants to be located
in their provinces: this reaction is no different from any where else in the world. Although these
concerns cannot be qualified in costs, they show uncertainties and fear of nuclear risks.

3.3.9.4. Transmission Line Impacts on the Economy, Society and Local Communities
Power transmission lines will for sure go through agriculture land, grassland, rocky mountains,
residential areas and industrial zones. Although these transmission lines will not have much effect
on land use, forest clearing will be required within the power transmission line rights-of-way in
areas where there are high trees that might threaten the safety of the transmission lines. The area
of rice paddy lost to transmission line development is very small, which means the compensation
value for lost crop yields is not big. The most considerable impacts are visibility and other health
impacts for people living nearby the transmisson lines who might be affected by electromagnetic
waves generated by these lines. Detailed assessment of these impacts will follow.

3.3.9.5. Other Issues

Opportunities for support to poverty reduction, social equity and income gap amongst
economic regions

Even if there is limited evidence so far in Viet Nam, in theory, hydropower development could
contribute to poverty reduction in the areas where hydropower schemes are built. Whatever form
it takes, there is little doubt that major infrastructure investments such as hydropower have a great
impact upon the locality where it is constructed: the issue is whether this is beneficial in poverty
reduction terms.
Experiences from Hoa Binh, Yali and Song Hinh show that one key issue concerns the affected
people’s participation in the planning and implementation of the hydropower construction. If
information, options, alternatives and local participation in decision-making are at hand, affected
people will take their responsibility and the basis for sustainable livelihoods could be established.
Another key issue is that if all short and long term costs are taken into account, then hydropower
development could also support poverty reduction in affected areas through enhancing positive
development opportunities whilst effectively mitigating potentially negative impacts.
Changes in culture and the issue of cultural preservation and intangible cultural assets

As shown from numerous experiences in Viet Nam and elsewhere, power development has many
potential economic, social and cultural impacts on local communities in both short and long term.
197
Hydropower development will, intentionally or not, change the current livelihood and cultural
patterns of the different ethnic groups and in different ways. Therefore, such development needs
to be closely interlinked with the general social, cultural and economic development plans in each
area. Generally, the ethnic groups in Viet Nam (including Kinh) represent a great variety in
cultural traditions and languages. Historically, the worldview and following rituals to uphold it is
inherently linked to the different production systems in the lowlands as well as in the highlands.
This relationship is particularly strong in the highland areas where alternative production systems
have yet not penetrated in full. Being removed from their home land and influenced by other
cultures will make it challenging for displaced communities to preserve their cultural structures,
let alone the cultural assets that are part of their home land and daily life.
Every ethnicity in every region has its own cultural and living characteristics and products: Dao
people have their bath medicine, Seng Cu people have their rice, Ta Phin people in Sa Pa have
their weaved fabric, Muong Khuong people have their chilli sauce, etc. It is recommended that
the economic development incorporate these specialties of each ethnicity to encourage product
branding and tourism in the region.
Economic development and hydropower development will result in the loss of many cultural
aspects, traditions and habbits of different ethnic minority groups as well as their specialty
products. Resettlement of residents in reservoir area cannot compensate for the psychological
effects such as feelings of belongingness to the homeland of their ancestors and culture as they
have spiritual value to them. The new location is often much different in terms of geography,
history and important landsmarks.
Indigenous knowledge is also a valuable asset. This knowledge is demonstrated through local
interactions with the environment and in the society, such as the experiences of Ha Nhi people
who worship the “forest sprit” and have strict but simple village rules for protection of forest and
water sources. There are traditions and habbits that were passed on through generations that
support the protection of upstream forest and river ecosystems. When hydropower plants are
built and people are resettled in a new location they might struggle to reestablish their life and
change their way of thinking and lose their indigenous knowledge and traditions.
An example of this is what happened in Lao Cai. There are 13 different ethnic minorities and 25
local sub-groups in Lao Cai. Local festivals are often organized when all the farming is done that
feature music, dance, and theatre, which demonstrate cultural values of people living in
mountainous regions. Each district has its own special festival features, such as the ‘going to the
rice paddy’ ritual of the Day people in Sa Pa, or the horse race in Bac Ha. Tay and Dao people
also still maintain their habbit of living in houses on stilts. The Department of Culture and
Information of Lao Cai province has been making great efforts and investing in preserving these
cultural heritages.

The plan to build 17 small hydropower plants in Sa Pa (approved by the Ministry of Industry and
Trade) will destroy the environment in Sa Pa in the future. After the Ban Den hydropower plant
was built in Ban Den village, the number of tourists to this village decreased by two third because
the contruction had destroyed the local scenery.
Similar situation is happening in the Central Highland where intangible culture heritage is being
altered or disappearing. These are examples of unsustainable development. This issue will198
need a
lot of attention during the implementation of PDP VII.

Changes in consumption patterns

According to the forecast results in Chapter 2, among five groups of electricity consumer,
management and domestic consumption stay in the second place after the industry and
construction sector. Though the share of electricity consumption for management and domestic
will reduce to only 30% in 2030, it still accounts for a considerable share of total demand. The
average electricity consumption per capita for household use in 2010 was about 996 kWh/year,
which is double the consumption per capita in 2005, but still a remarkably low level given Viet
Nam’s rapid development of recent years. Population growth, urbanization and increased per
capita electricity consumption will have a direct and considerable impact on future demand for
electricity. Urban residents typically consumes more electricity than people living in rural areas.
According to the Institute of Energy (2007), electricity consumption per capita in rural areas was
only 122 kWh/person/year in 2004: the figure was 12 times higher for the urban population (1488
kWh). It is forecasted that urban population will increase from 27% in 2006 to 40% in 2025.
Opportunities for local people to participate in development project planning

Generally, the current ‘socialization’ policies intend to bring responsibilities down to the lowest
levels. In practice this often means that lower levels should take greater charge of development
costs.

Until now, the role of the mass organizations20, led by the Fatherland Front, has been crucial and
effective to bring in local people’s interests into the focus of the development. Not the least, have
the mass organizations assumed the tasks of managing credit schemes bringing them to the most
remote areas and to people (often ethnic minorities) who then have been able to raise their living
standard; where often women have been playing a key role.
Current trends of devolved decision-making and community participation in Viet Nam open up
increased opportunities to involve local stakeholders (authorities, mass organizations and people)
in hydropower planning. Until now, local stakeholders have typically not participated in
feasibility studies and early stages of hydropower planning. In all cases so far, except the NHP
Study, the participation, if any, starts only after the decision on a hydropower complex has
already been made. Examples where local participation in resettlement planning and
implementation have taken/are taking place are Song Hinh and Son La.

3.3.10. Local Livelihood

There are benefits from power development projects that support the development of local
businesses and contribute to national economic development. A stable supply of energy lies the
path that leads to job creation, and more stable and better income generation. Each power
development project often creates thousands of jobs during the construction and operation phase.
Other busineses also benefit from the project such as in the hospitality sector, material supply,
and entertainment, etc.
However, in many cases, ethnic minority people who are highly dependent on natural resources

20
Farmers Association, Women’s Union, Youth Union, Veterans Association 199
and agriculture production will be directly affected in long term due to loss of access to vital
livelihood assets and common property resources. This happens when power development
projects take away the homes and large areas of production land of farmers who have limited
capacity and are less adaptitive to new working environment and practices. In some other cases,
the ecosystem is lost, exhausted or fragmented and can no longer supply for local residents or
people who have been relying on natural resources are relocated to a new place with limited
access to these resources which leads to loss of income and livelihoods. The level of impacts on
local livelihood varies depending on the nature of each project.
The affected populations are different in different types of power development project. Thermal
power development projects affect the population in the delta areas where there are favorable
transportation, water supply and infrastructure whilst ethnic minority people living in
mountainous areas are often affected by hydropower development projects.

Job Opportunities and Changes to Population Structure

It is generally considered that resettlement should at least not worsen the situation of the
displaced people. In some cases, investors and local authorities create opportunities for affected
people to have new jobs, which give more stable and higher income. In some other cases, large
areas of land are taken away from people who are older, unskilled and less adaptable to new
changes and the number of people who lost their livelihoods is higher than the number of new
jobs available. This puts affected people in a challenging situation and they are likely to become
impoverished.
Local participation in the early stage of planning of a power development project effectively
contributes to the process of employment and livelihood orientation for affected people,
especially when the project plans to take away their access to good quality land and their cultural
and psychological dimensions of daily life such as opportunities to preserve and develop local
traditions and habbits. It presents the local community an opportunity to take part in decision-
making related to the displaced people’s situation.
Experiences show that when a power project starts a number of workers and engineers will come
to live and work in the project area. These people are often more educated and have better income
than local people. The presence of these workers and engineers will encourage the development
of local infrastructure and services to meet with their demands.

Until now, there is no overall policy for resettlement and compensation in Viet Nam.
Compensation is regulated by the Land Law (2003). In the present, resettlement of power
development is decided at project level, but project investors must follow the state and provincial
guidelines for resettlement. Unlike in environment where EIAs have become compulsory, there
are still no obligations for social impact assessment in resettlement. Resettlement and
compensation in power projects tend to only cover the short term impacts like loss of land, plants
and houses. The long term impacts such as loss of livelihoods, having to adapt to a new culture,
feelings of belongingness, and not having the opportunity to influence the new situation, have in
the past not been satisfactorily addressed or compensated for. If a resettlement plan is well
considered and implemented, it will allow the resettlers and the host population to re-establish
their livelihoods.
200
3.3.11. Community Health

Air, water and soil pollution (as discussed in previous sections) means changes in air composition
and poor water quality. Pollutants cause negative changes to physical, chemical and biological
quality of water that are harmful to humans and animals. According to an assessment by the
World Health Organization (WHO) in 2006, about 24% of diseases and mortalities in the world
are related to the environment. Also according to this World Health Report, 85 of 102 common
diseases are related to the environment, including many waterborne diseases such as diarrhea,
dysentery, scabies, and conjunctivitis. Both human health and the ecology can be affected by
pollution. Air pollution threatens the life of many living organisms including human who can die
from repiratory diseases, cardiovascular, throat inflammation, chest pain, and breathlessness.
Water pollution causes 14,000 deaths everyday through food poisoning. The presence of heavy
metal in food and drinking water can cause cancer. Noise pollution can cause ear-related diseases,
high blood pressure, depression, and isomia. Oil spills can cause rashes and blisters, etc., amongst
many other serious impacts. Economic losses as the result of environment-related diseases are
reviewed for each type of production and pollution in Chapter 3. The calculation was based on
total hospital cost and economic losses due to diseases.
3.3.11.1. Water-related Diseases as the Result of Hydropower Development
Some infectious diseases can spread around hydropower reservoirs, particularly in warm climates
and densely populated areas. Some diseases (such as malaria and schistosomiasis) are the results
of water-dependent disease vectors (mosquitoes and aquatic snails); others (such as dysentery,
cholera, and hepatitis A) are spread by contaminated water, which is worse in stagnant reservoirs
than in fast-flowing rivers. The public health sector should introduce preventive measures (such
as awareness and information campaigns), monitor disease vectors and outbreaks, and provide
clinical treatment as needed. Control of floating aquatic weeds (see below) near populated areas
can reduce mosquito-borne disease risks.

Currently, water supply for most rural people comes from rain water and surface water taken
directly from rivers and near by surface water sources for domestic use. Wastewater is often
released directly to the environment without any treatment. Polluted surface water results in an
increasing number of diseases in local communities in river basins, especially in the lower river
basins. Some diseases show immediate effects on human such as scabbies, skin infections,
diarrhea, etc. Some more dangerous diseases only show effects when toxins have been
accumulated in the body for a long time. When the proportion of heavy metal or chemical
(from pesticide runoff) in water exceeds the safety level, the water becomes contaminated.
These contaminants are stored in aquatic organisms and plants. When these organisms and
plants become food the contaminants are transferred to human body. If exceeding a certain
level, these contaminants will cause functional disorder of the organs that can result in some
dangerous diseases such as genetic mutations, cancer, anemia and heart diseases (i.e. blood
pressure, blood circulatory disorder, pulmonary embolism, coronary artery disease, ischemia,
diabete, liver failure etc.). As discussed in Chapter 2, PDP VII is not the only cause of pollution
but a contributing factor aside from other agricultural, industrial and living activities that result in
an increased level of pollution of surface water.

Clean water supply in Vietnam is still inadequate. Wastewater treatment is only available in a few
201
big urban areas. If wastewater treatment is not done properly there will be serious impacts of
pollution of surface water.
3.3.11.2. Air-related Diseases as the Result of Thermal Power Development
Air pollution from both gaseous emissions (SO2, O3 and NOx) and Particulate Matter (PM) not
only has negative impacts on human health but also causes economic loss and climate change.

Air pollution happens when there is the presence of a strange substance in the air or a change in
the air composition that makes the air unclean, causes unpleasant odor, reduces visibility, or
produces acid rain. Air pollution also affects soild and water quality. Of the 25 government
insured occupational diseases, 18 are related to air pollution.

As discussed in Chapter 2, air pollution in Vietnam is getting worse and the amount of air
pollutants is increasing, especially in industrial zones. Forecast results in PDP VII show that the
electricity sector contributes significantly to air pollution. The analysis shows that the quantities
of particulate matter releases in particular (not SO2 and NOx) will rise from nearly 4,800 tonnes
in 2011 to over 34,460 tonnes in 2030: a seven-fold increase. Examples of human health impacts
of air pollution can be found in the results of the 10 year statistic collection by the Children
Hosptial 1 in Ho Chi Minh City, which show that air pollution related diseases are increasing
rapidly. The number of children who were diagnosed with asthma was 3,074 in 1996 and 11,491
in 2005. There were only 441 children with middle ear infection in 1996. In 2005, this figure
increased to 1,999. The number of children who suffered from juvenile cerebral palsy was 553 in
1996 and 895 in 2005. In 1996 there were 968 children born with birth defect. This number was
2,335 in 2005.
Human health impacts of air pollution are determined both in terms of increased morbidity
(frequency and severity of illnesses) and reduced life expectancy amongst vulnerable populations.
The most common illnesses are asthma and bronchitis. Other health problems as a result of air
pollution include cardiovascular and cerebrovascular diseases. The severity of these impacts
depends on distance from the power station and the existing levels of pollution from other
sources. The additional pollutant load from from the thermal power station in urban areas and
industrial zones, where the existing ambient air quality is poor, will have a greater impact. In
rural area where the air quality is good, the impact of air pollutants from thermal power plants
will not be big although areas of close vinicity to the plant will experience significant air
pollution.

Detailed assessment of these human health impacts shows that they vary in different parts of the
country and different power stations. The differences are determined by (i) pollutant distribution
patterns (clustered pollution); (ii) population density (reflective of the number of people at risk);
and (iii) existing ambient air quality.

Research results from pollutant distribution model in EIAs of several thermal power projects in
the plan and reference information from epidemiological studies about the spatial effects of air
polutants from thermal power plants were used to assess the impacts that might increase the risks
of respiratory diseases and other illnesses related to gaseous pollutants from thermal power plants
in the zones of influence of power projects. A three-fold zonation of future epidemiological risks
has been produced (see maps below):
202
1. Zone 1: up to 5 km from the power stations, where the risks of increased disease
incidence are high, especially where existing ambient air quality is poor. This is the
zone where the level of gaseous emissions and PM concentration is high. It is estimated
that there are about 1.78 million people living in zone 1 of up to 5 km from the existing
power stations and the ones included in the plan that are going to be built. Below are
maps that illustrate this zone. Detailed calculation can be found in Appendix 1 of this
report.

2. Zone 2: between 5 and 10 km of the plants, where there is a medium risk of increased
disease incidence. The remaining PM pollutants will be deposited in this zone along with
further levels of gaseous pollutants. The concentration of pollutants in this zone might be
lower than in zone 1 but can be significant if the existing ambient air quality is poor or
there are a few power stations in the area. It is estimated that there are about 5 million
people living in zone 2.

3. Zone 3: between 10 and 30 km of the plants. This is a low risk zone, with little or no PM
deposition but some residual risk of impacts from gaseous pollutants. There are more than
25.4 million people living in zone but only a small part of this population is at risk. The
risks here are higher where clusters of power stations are found and several zones overlap
in areas where ambient air quality is already an issue.

203
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205
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The maps above shows affected zones in the country, with more details for the zones in
the northern and southern regions. It is easy to see from these maps that there is an
obvious link between human health risks and thermal power production. Thermal power
plants in the central and the far southern region of Vietnam have the lowest risks
because they are often located far away from one another and in areas with reasonably
good ambient air quality. Assessment results show that the populations of the two main
economic focal regions (Northern Delta Region and South East Region) will be most
affected by power development in the future. The two main clusters of existing and
planned power stations are near the coalfields and industrial zones along the coast in the
North and around Ho Chi Minh City in the South. Both areas have high level of zones
overlap, poor exisiting ambient air quality, and high population density. The air in the
area around HCMC already has a high level of PM. If all the planned power plants are
built, human health impacts in this area will be significant because the existing ambient
air quality is already poor and continues to deteriorate due to urbanization,
industrialization and increasing private car ownership.

The economic cost of PM releases will increase from $99 million in 2011 to $710
million in 2030, whilst those for NOx will rise from $234 million in 2011 to $639
million in 2030. In health terms, these costs reflect both the increased cost of health
care and the value of lost productive time due to increased sickness and earlier deaths.
These represent significant economic costs that need to be ‘internalized’ into the cost
calculations of thermal power production.

3.3.11.3. Illnesses Caused by Electromagnetic Fields from High Voltage

Transmission Lines

The final possible impact to be considered in this section is the issue of possible adverse
effects on human health from the electro-magnetic fields (EMF) generated by the
transmission system: the lines, transformers and sub-stations. This is an extremely
controversial issue, with a number of scientists pointing to the potential impacts of EMF
on the incidence of health problems such as cancer and cardio-vascular diseases. The
evidence to support such claims is limited and the current consensus is that such a link
is as yet not established.

The World Health Organization announced that: “At low frequencies, external electric
and magnetic fields induce small circulating currents within the body. In virtually all
ordinary environments, the levels of induced currents inside the body are too small to
produce obvious effects”.

Similarly, an important report by the European Commission21 concluded: “In summary,

the available evidence from epidemiological studies is not sufficient to draw any
conclusions about potential health effects of static magnetic field exposure”.

21
European Commission Scientific Committee on Emerging and Newly-Identified Health Risks
(2006). Preliminary Opinion on the Possible Effecfs of Electro-Magnetic Fields on Human Health
page 38
207
This does not mean risks do not exist, but rather that they have not been scientifically
proven and it is agreed that a precautionary approach should be applied to this issue.
For example, the US Environment Protection Agency advice people living near or
under power lines to take precautionary measures. In Vietnam, the “Standards for
Industrial Electromagnetic Frequency and Workplace Safety Inspections” provides
information about the industrial electromagnetic frequency, the allowed length of time
of exposure to EMF accordingly with the frequency and how inspection of
electromagnetic frequency should be done. More details are provided in the table below.

Table 3.19 : Electromagnetic Frequency and Allowed Length of Time of Exposure

Electromagnetic < 5 5 8 10 12 15 18 20 20<E≤ >

frequency 25 25
(kV/m)
Allowed length of Unlimite 8 4.2 3 2.2 1.3 0.8 0.5 1/6 (10 0
time of exposure d 5 3 mins)
(h)
The affected area of EMF is where the electromagnetic frequency is above 5kV/m.
When the frequency is below or as high as 5kV/m, workers operating the power lines
and substations and people living near or under power lines are not affected.

It was not possible to evaluate the number of people who will be affected by EMF in
this SEA. However, it is necessary to identify the number of affected people when
implementing power development projects in the plan.

3.3.12. Food Security

Vietnam currently is not only self-efficient in terms of food supply but also able to
export about 5 million tonnes of rice every year. However, national food security is still
an important issue that needs attention from now on as discussed in the previous section.
Current concerns are natural disaster, epidemics and impacts of climate change such as
salt intrusion and loss of agricultural production land.

Vietnam is one of the countries that will be most affected by global climate change. If
sea level rises by 1 metter, the Red River Delta will lose 5,000 km2 of land (1/3 of the
total area), and between 15,000 and 20,000 km2 of the Mekong River Delta (half of the
current total area) will be under water. If this happens, total agricultural production of
Vietnam will be cut down by 5 million tonnes. Agricultural productivity can be
unpredictable due to bad crop yield, natural disaster such as flooding, and pets, etc.
Therefore, food security is always an urgent matter that needs special attention (“Food
Security and Climate Change” conference, organized in Hanoi on 31 May 2010).

In 2020, the population of Vietnam will increase to more than 100 million. The demand
for food will increase by half of the current amount. There have been evidence of how
food security affects national security: high price increases have caused violence in
many countries from Africa (Egypt, Burkina Faso, Marocco, Côte d’Ivoire, Mauritania,
208
Somali, Senegal, Cameroon, Mozambque, South Africa, Yemen, etc.) to South America
(Bolivia and Mexico), to the Middle East (Afghanistan and Uzbekistan), and Asia
(India, Bangladesh, Indonesia, and Srilanka). The picture of hungry people eating dirt
in Haiti has touched the world.

Climate change, global financial crisis, food crisis are among many other direct reasons
that have made the situation worse. There are natural disaster events such as too much
rain in Europe and drought in Ukraine or the long drought from 2006 to 2007 in
Australia. There are human-induced disasters such as the construction of dams for
hydropower development in upstream Mekong river that violates the rights of people
who live downstream whose livelihoods depend on the river and increases drought and
flood, and deforestration that causes inundation, flash flood and landslide which result in
low productivity.

According to the low case of climate change, Vietnam will lose 40% of rice cultivating
land in the Mekong Delta in the coming few decades. Without having good agricultural
development strategies in place, Vietnam might have to import food like in the period
before Doi Moi.

There have been many studies that identify challenges and propose solutions for the
world and regional food security. In Vietnam, challenges and solutions to food security
are closely related to the following factors:

(i) Rapid population growth: On average, the population of Vietnam grows by the
population of a province, and the population of a province in Vietnam grows by the
population of a district in a year;

(ii) Reduced land area for food production: A few decades ago, land area for rice
production in Vietnam was 4.2 million hectares, producing the equivalent amount of
rice as 7 million hectares because 25% of the rice production land area in Mekong
Delta (0.5 million hectares) was used to grow three crops a year. To date the land
area for rice production has not changed much and productivity is increasing thanks
to high-yielding varieties. The Mekong Delta can potentially produce more rice by
increasing both the number of crops in a year and the crop yield to make up for the
rice production land area lost to industrial and urban development;

(iii) Bio-energy: is an increasing trend. The source of food for more than 1 billion
people in the world who are livingin hunger is becoming a fuel source. It takes 204 kg
of corn, which is enough to feed a person in one year, to fill a 94.5 litter tank of ethanol.

(iv) Land speculation and acquisition: food-importing countries are rushing to

acquire land in other countries to secure their food supply. This is potentially
becoming a new form of “colonization”. According to many researchers, Vietnam is
a place for other countries to come and rent land from;

(v) Natural disaster due to climate change: Vietnam is one of the five most vulnerable
countries to the impacts of climate change, especially in the rice production area s of the
Mekong Delta, the Red River Delta, and the central coastline. Poor countries and poor
209
people, most of whom are farmers, suffer the most from global climate change, financial
crisis, and food crisis. Agricultural production is facing more and more challenges.
Extreme weather conditions such as typhoon, flood, drought, and salt intrusion are
becoming more and more severe. The main reason for this development is the CO2
emissions (and also H2S, SO2 emissions) from industrial production activities, causing
global temperature rise, ice melting and other heavy consequences.

The global financial crisis originated from American financial corporations in Wall
Street has spread all over the world. Rich countries use the excuse of the financial crisis
to neglect their aid promises to help poor countries buy food. At the same time, food
production is facing more challenges due to hash climate;

(vi) Lack of comprehensive planning in hydropower development: the short term

thinking in hydropower development planning has caused severe natural disaster such
as typhoon, flooding, salt intrusion, and landslide. Vietnam and many other countries
have long disapproved the construction of dams that alter the flow of the Mekong
River by upstream countries. China is an example of a country disregarding
international regulations by not recognizing the Mekong River as a common
property.

In the last two years, investment in hydropower projects has become very attractive
because it brings good economic result and quick return on investment: with an average
investment of 25 billion VND/MW it only takes from 8 to 10 years to recover the
investment capital. The investment per MW can be even less if the hydropower plant
has bigger capacity and good location. There has been a lot of investment from
businesses within and outside the electricity sector to hydropower development. The
result is an intensive network of hydropower plants has been developed in the Central
Region, especially the Central Highlands, causing many environmental and socio-
economic losses. Quang Nam province has approved 62 hydropower projects, including
10 in the Vu Gia – Thu Bon River. The provincial government has also allowed
research and investment studies of 47 other projects. Quang Nam is one of the provinces
in the Central Region that have planned and built many small and medium sized
hydropower projects. The 50 projects that either have been built or are being built in the
province result in 1,739 displaced families. Since 2000, hydropower development has
taken 11,589 hectares of land in the province. The issue of lack of land for production
and housing for displaced people is currently affecting food security in Quang Nam
province.

The national power development plan will affect a large area of agricultural production
land, as discussed in the previous sections. Some of the land taken for power
development was already included in the plan for industrial and infrastructure
development. However, more than 3.7 million ha of agricultural land that was not
included in the industrial and infrastructure development plan will be affected by the
power development plan.

Additionally, hydropower production also directly affects water supply sources for
210
agriculture due to the operation regimes of reservoirs. Gas emissions from thermal
power plants contribute to climate change therefore have direct impacts on food security
in Vietnam.

3.3.13. Impacts of Complementary Civil Work

Apart from impacts that are easy to see and can be mitigated such as noise,
air/water/soil pollution as the result of activities of transporting vehicles and waste
disposal of workers in the construction site, there are many other big impacts that need
to be adequately assessed, as discussed below:

Access road

New access roads to hydropower dams can induce major land use changes, particularly
deforestation, with resulting loss of biodiversity, accelerated erosion, and other
environmental problems. In some projects, environmental impacts of access roads can
greatly exceed those of the reservoir. On the 10 km long access road of A Luoi
hydropower plant lay many big wood logs that were cut down. Some of the wood logs
have been sawed and are waiting to be taken away. The contractor had to log tens of
hectares of old forest to build this road. There is no record of how many hectares of
forest that was cleared for the construction of other complementary civil works in this
project. The construction of Dak Ru hydropower plant has cleared hundreds of hectares
of forest along side the Dak Ru stream to build a dam an a cannal system of more than 5
km long.

The worker living quarter that houses many people coming from different areas is often
the source of many social and security issues, including the issue of transmissible
diseases.

The siting of any new access roads should be in the environmentally and socially least
damaging corridors. Forests and other environmentally sensitive areas along the chosen
road corridor should receive legal and on-the-ground protection. Road engineering
should ensure proper drainage, to protect waterways and minimize erosion.

Environmental rules for contractors (including penalties for noncompliance) should

cover construction camp siting, gravel extraction, waste disposal, avoiding water
pollution, worker behavior (such as no hunting), and other construction practices.

Power transmission lines

Impacts of power transmission lines can be small in thermal power projects but these
impacts are significant in hydropower projects. Power transmission line rights-of-way
often reduce and fragment forests; indirectly, they occasionally facilitate further
deforestation by improving physical access. Large birds are sometimes killed in
collisions with power lines, or by electrocution. Power lines can also be aesthetically
objectionable. Power lines should be sited to minimize these concerns and built using
good environmental practices (as with roads). In areas with concentrations of vulnerable
bird species, the top (grounding) wire should be made more visible with plastic devices.
211
Electrocution (mainly of large birds of prey) should be avoided through bird-friendly
tower design and proper spacing of conducting wires.

Quarries and borrow pits

Quarries and borrow pits are used to provide material for construction of the dam and
complementary works. They can considerably increase the area of natural habitats or
agricultural lands that are lost to a hydropower project.

Associated Development Projects

Power development projects often make possible new development projects with major
environmental impacts, including irrigation, urban expansion, and industrial facilities
(due to new water supplies). New development projects should be planned to minimize
adverse environmental and social impacts. Environmental impact assessment studies
should be carried out in the early stages of project planning.

Change of natural scenery

Industrial projects are often located in areas with favorable natural conditions for water
supply and transportation, and low population density. The first requirement for a
hydropower or a renewable energy project is that the location needs to be near a primary
energy source such as a river where it is possible to build dams, wind and solar energy
that is available all year round, or good supply of rice husk or bagasse, etc. Because of
these requirements, most projects are located in areas with beautiful natural scenery and
they often alter the natural conditions of both aquatic and terrestrial habitats by power
plant construction work and complementary civil works such as establishment of fuel
and product port, dam and reservoir building, and installation of giant wind mills in
coastal sand dunes, etc. These changes have direct impacts on local people’s psychology
and natural ecosystems. In long term, these projects might cause changes to the
landscape and hydrological regimes in the project site and surrounding areas, and
microclimate change.

3.3.7. Cumulative Impacts and Development Trends of Environmental Issues

Detailed assessment results for each type of power project are included in Table 3.12.
These results show that power development projects have big impacts on the
environment from every aspect. The cost for environmental impacts mitigation also
varies from project to project.

a. Thermal Power Development:

Thermal power development projects often affect large areas. The cumulative impact
and impact coefficient of thermal power development are assessed below:

Areas with developed economic activities and high population density are usually where
the environment is already quite stressed (such as the Red River Delta Economic Focal
Region). Additional pollutant load in these areas will have big impacts on the
ecosystems, human health and economic activities. The effects of the pollutant load
212
are not only obvious at the source but also can be seen within 5 or 10 km from the
source, depending on various factors. The impacts of thermal power projects are
assessed as widespread but these impacts can be fully mitigated if a large amount of
investment is spent on taking care of the environment in these sensitive areas. Typical
examples of cumulative environmental impacts can be seen in coal-fired thermal power
projects in the North (Mong Duong, Hai Duong, thang Long, Thai Binh, Nam Dinh, and
Hai Phong 3), and in the South (Duyen Hai, Hiep Phuoc 2, cai Mau, Soc Trang, Tra
Vinh, Son My, and Song Hau), especially in clusters around Ho Chi Minh City and Bien
Hoa – Dong Nai such as the Hiep Phuoc 2 and Formosa. More details are included in
Figure 3.13. According to research results in Chapter 2, these two areas are sensitive to
environmental pollution even without the power projects in PDP VII. Therefore, the
power development projects proposed for these two areas in PDP VII will be under the
pressure of high environmental costs to meet the investment requirements.

Power development projects proposed for the Central Region where the water resources
are limited will have to consider adjusting their proposed capacity to minimize impacts
on water supply for local residents and power production activities of the projects.

b. Hydropower Development

Table 3.20. Hydropower Projects with Big Impacts and High Biological Risks

Project Area of high Affected area Conservation Affected

biodiversity of high area conservation
biodiverisy (ha) area (ha)
A Luoi A Luoi-Nam Đong 9,032
Bac Me Du Gia 1,179 Bac Me 24,238
Sinh Long 459 Du Gia 1,14
Ban Chat Nam Đon 4
3,592
Dak Mi 1 Lo Xo Pass 18,245 Ngoc Linh 23,061
(Kon Tum)
Song Thanh 9,607 Song Thanh 9,541
Đong Nai 2 Loc Bac – Bao 1,208 South West Lam 1,168
Loc Đong
Ta Dung 6,870 Song Thanh 6,601
Đong Nai 5 Loc Bac – Bao 9,504 Cat Tien 19,092
Loc Loc
Cat 19,684 South West Lam 9,798
Đong
Hua Na Xuan Lien 11,247 Mu Cang Chai 298
Nam Đon 12,144
Lai Chau Muong Nhe 77,968
SrePok 4 Chu M’Lanh-Yok 20,472 Yok Đon 20,229
Đon
213
Cu Jut 7,446
Trung Son Pu Hu 12,533
Pu Luong 1,025
Xuan Nha 11,298
Song Bung 4 Mac Cooih 17,693
Song Thanh 2,133
Upper Kon Kon Plong 62,446
Tum
The table above shows that hydropower projects in Bac Me, Ban Chat, Trung Son and
Lao Chau have big impacts on areas with biodiversity sensitivity. All of these schemes
are located in the north of Viet Nam, in areas where poverty is particularly entrenched
and where there is a very high proportion of ethnic minorities in the affected
populations.

The presence of several schemes on one river basin presents the possibility of
cumulative impacts that will compound the effects of individual schemes. This is
particularly an issue in the Vu Gai-Thu Bon basin, the river basins in the Central
Highland, and Dong Nai 2 and 5 in the South.

It is highly important to recoganize the common interests (multinational and regional)

and practice multi-purpose water resource management in big rivers when developing
hydropower projects in the upstream of these rivers. When China started their
hydropower projects in upstream Mekong River it affected large delta areas in the
Mekong sub-region nations, amongst which Vietnam was most affected, because the
release regimes of the dams completely change downstream hydrological regimes. The
Mekong River plays an important role in the socio-economic development of these sub-
region countries.

Environmental issues associated with small hydropower projects seems to have gone
beyond the control of the authorities and are causing significant impacts. Initial data
collection shows that there are about 800 small and medium hydropower projects in the
whole country, including 335 projects in the Central Region. These hydropower plants
contribute greatly to socio-economic targets. However, they have some negative
impacts on the environment due to inappropriate planning and practices.

Hydropower development in the Central Region is now in a situation that “no expert or
authority can possibly draw a location map of all hydropower projects. Simply because
there are too many! So many that experts would say to each other that by randomly
pinning a point on the map one can find that there is actually a hydropower plant there”.
In the three provinces of Gia Lai, Dak Nong and Kon Tum only there are 257 small and
medium hydropower projects. There are 113 hydropower projects in Gia Lai with total
capacity of 549,781 MW, which is about 1/10 of the total capacity of 11 hydropower
plants by EVN). 21 of these projects are now in operation.

In Dak Nong province there are 70 hydropower projects with total capacity of
241,07MW, of which 26 projects are now in operation. In the Dong Nai River Basin,
214
the three big hydropower projects namely Dong Nai 3 and Dong Nai 4 (total capacity of
520 MW, by EVN) and Dac R’Tih (144 MW capacity, by Construction Company 1) are
under construction. These projects will be completed and connected to the national grid
in 2012. There are medium and large hydropower projects which are either already
completed or still under construction in Krong No – Serepok river. They are: Buon Tua
Srah (86 MW, by EVN), Buon Kuop (280 MW, by EVN), Đray H’Linh II (16 MW,
by Electricity Joint Stock Company 3), Serepok III (220 MW, by EVN), Serepok IV
(70 MW, by Dai Hai Ltd. Co.).

Kon Tum is a province with diverse hydropower resources for hydropower

development. The hydropower development potential of Kon Tum is still high
considering there have been many national hydropower projects in the Se San, Poko
and Dak Nghe rivers. Kon Tum also has a development plan for 74 small and medium
hydropower projects with the total capacity of about 300 MW.

c. Transmission Line Development Project

Conservation areas and areas of high biodiversity are severely affected by transmission
line development projects as summed up in Appendix 4. It is most important to note that
large areas of conservation in Cat Tien, Cuc Phuong, Hon Son Tra – Hai Van, Mom Ray,
Muong Sai, Nui Chua, Vinh Cuu, and Yok Don are significantly affected and fragmented.

The National Power Development Plan also shows that there are some cumulative
impacts when the zones of influence overlap, which creates more serious impacts. An
example is that there are too many hydropower development projects in the Vu Gia –
Thu Bon river system. Transmission line development projects near or within the
hydropower zones of influence will exelerate the existing impacts in affected areas or
increase the risks of impacts in the remaining areas of biodiversity sensitivity. For
example, the Dong Nai 5 ZoI and the 500 kV transmission lines will divide Cat Tien
national reserve into 8 fragments and threaten biodiversity of the remaining forests.
Similar impact is likely to happen to Nui Chua and Yok Don national park.

Thermal power: Generally, thermal power development is necessary because it

contributes to economic development and domestic power supply. Planning for thermal
power development needs to be based on efficient economic and sustainable
environmental development targets. In order to achieve this, the costs of environmental,
social and economic impacts need to be quantified as much as possible to be included in
cost calculations for comparison and assessment. Additional cost for social and
environmental impacts is US$27 billion per annum during the PDP VII period up to
2030, accounting for 17% of the total investment for this period (US$156.3). This
calculation has not included all the costs of impacts on the environment, economy,
society, and human health. However, it shows that environment impacts of PDP VII are
relatively high. These impacts can be mitigated considerably if the Government and
management authorities take positive actions and make more efforts.
Transmission line: The construction of transmission lines as presented in PDP VII will
consequently have significant ecological and resource value impacts. These in turn will
215
have economic consequences in terms of the loss of ecosystems services values and
negative local livelihood and amenity value impacts. The extension of the transmission
grid is vital to the future development of the power supply system in Viet Nam and there
are both technical and economic restrictions that limit the extent to which the negative
impacts itemized above can be mitigated.

The overall impacts of PDP VII were assessed using Multi-Criteria Analysis (MCA)
method. This is an assessment tool for complex problems in a situation where multiple
criteria are involved. The table below presents a summary of power development
assessment results from 47 Provincial Departments of Natural Resources and
Environment and 47 Provincial Departments of Industry and Trade.

As seen in the table below, the assessment results show that overall PDP VII has big
environmental and social impacts in all three areas of thermal power, hydropower and
nuclear power, although each type of power development has its own impacts. The
results also show that there is a concern amongst local people and governments about
current environmental issues.

216
TABLE 3.21: IMPACT ASSESSMENT SUMMARY

SCORE BY POWER DEVELOPMENT

Assessment Criteria
CAUSE, AFFECTED Score TYPE (0-100)
OBJECTIVE PEOPLE AND SCOPE 1 - 10 Hydro- Thermal Nuclear Power Renew
OF INFLUENCE power power power grid able
POWER DEVELOPMENT TYPE

Social People Ethnic Minority To ensure good Land acquisition for 3 80 20 20 40 10

Impact living conditions power plant project
Gender/Vulnerable and benefits for Areas affected by 3 90 70 70 30 0
Group affected people. development activities.
Ethnic minority group, low
Number of Large scale (> 1.000 income group, vulnerable 5 70 20 70 20 0
affected people household) group (women, children,
Scale (> 100 elderly, veterans,), 2 90 80 100 40 0
household) indigenous people.
Change in land use and land reserve for To preserve Effects on religion and 4 70 90 70 40 10
resettlement natural resources belief.
Cultural heritage /asset/natural resources that local people - Conflict of interests and 4 80 100 20 0 0
including fuel are dependent on benefits in the use of water,
Natural scenery and cultural soil and other resources. 3 90 50 40 70
heritage that that - Changes to or loss of
they own cultural aspects, habbits or
lifestyle of local people,
People’s life Agriculture To ensure local 4 60 90 90 10 10
especially ethnic minority
income and
Fishery people. 4 90 60 70 10 10
livelihood

Water use 5 80 50 60 0 0

216
Job/Employment - Withholding information 4 80
from relevant parties:
Income level and local government, people’s 3 60 70 80 20 30
income gap committees at different
levels.
Social equity Unfairness in To get local 3 80 60 30 50 20
Limitation of decision
development consensus
makers.
activities and benefit through
sharing and lack of information
information distribution.
exchange
Lack of local 3 50 40 60 20 20
consensus
Environmen Ecosystem (Deterrioration & loss of To protect Construction of roads, ports, 5 90 30 70 70 10
tal Impact forest; loss of habitats of endangered original forests, new navigation routes. The
species, impacts on national parks, tropical forests, scope of work and scope of
preservation areas and biosphere and habitats of influences of these activities.
reserves) high biological
values such as
coral reefs,
mangroves, and
tidal areas.

Coastal areas Changes to coastline in large 3 20 60 80 0 0

scale
đường bờ. 70 40
Wetlands 3
Landscape or impacts on landscape. To prevent Ground leveling, embankment 3 80 20 30 30 10
landslide, reenforcement
erosion, Building activities,
sedimentation including building of waste
and surface storage areas.
runoff.
Changes to hydrological regimes 5 0
217 90 40 10 0
Climate CO2 and other greenhouse gas emissions To limit the Fossil fuel and biomass 4
Change impacts of GHG combustion, geothermal,
methan hydrate reaction,
treatment of coal and fuel
coke. 10 80 0 0 20
Pollution Air quality (SO2, To meet the Fuel treatment. Fuel 4 20 80 70 20 30
NOx, ordor, PM, other standards for combustion.
gases and radioactive gaseous Operation of fuel port.
agent) emissions and Operation of vehicle and
ambient air. mechinary.
Effects of the Coal ash storage area.
compound and Scope of influence of power
cumulative plant. Wind blowing to
effects. residential area.
Water quality (pH, To meet the From various sources: 3 80 60 60 10 10
SS, BOD, COD, standards for untreated wastewater,
organic compound, gaseous rainwater runoff, waste
oil, Phenol, sulfur and emissions. storage area, cooling water,
sulfide). Heavy metals Protection of fuel port, wastewater from
(Cu, Cd, Zn, Pb, Cr, river basin, coal storage, runoff from
Ni, Hg, and other river coal ash storage area.
metals). Over- ecosystems and
fertilization, thermal domestic water
pollution and supply sources.
Environment

rainwater runoff.
Soil quality: pH, Around the waste area of 4 10 50 60 0 0
heavy metal, oil, the plant.
radioactive material Earth work for the plant.
Noise 3 20 70 10 10 70
Impacts Electromagnetic fields 1 20 20 20 70 10

Solid waste 3 20 80 40 10 60

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Communit 4 30 80 70 20 10
y Health
Food 4 50 90 80 40 10
Security
Environme Risks and accidents: Climate change 3 70 90 60 40 20
ntal Risk - Drought, flood, temperature rise Changes to the coastline or
- Erosion, landslide river-edge structure.
- Acid rain Changes to the hill/mountain
- Salt intrusion surface structure in the
project construction site.
Deterioration of soil and
air quality due to air
pollution. Less river flow
in downstream.
Total 102 1,770 1,760 1,510 690 380

Total Point 178,500 179,52 151,9 70,380 38,760

0 80
Note Scoring (according 1: not important
to priority ranking
of the national 2: marginally important
High scores are big impacts with little possibility for
environmental 3: relatively important
mitigation. (opinion of the experts)
protection targets)
4: important
5: extremely important

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Chapter 4: Stakeholder Consultation

4.1. Organization of Stakeholder Consultation

4.1.1. Objectives of Stakeholder Consultation

Following the sequencing of SEA phases, stakeholder consultations were organized in

the 3rd and the 6th stage of the SEA.

The objectives of the stakeholder consultations cover the following issues of the SEA
of PDP VII:

(1) The main environmental issues and environmental indicators to be assessed in the
SEA
(2) The SEA approach and evaluation methods
(3) The analysis of the results of the social and environmental impact assessments of
the different power development scenario
(4) The feasibility of the draft mitigation measures to address main social and
environmental impacts.

4.1.2. Consultation Methods and Participants

There were two methods selected for consultation: workshop and distribution and
collection of questionnaires.

(1) Consultation workshops with support from the Environmental Operation Centre of
the Asian Development Bank:

1st workshop: The objective of this workshop was to gather stakeholder’s comments on
the SEA approach and evaluation methods, and strategic environmental issues to be
assessed in the SEA of PDP VII.

Participants to this workshop included representatives of related ministries and

departments, government management agencies, enterprises in the electricity sector,
provinces with big power development projects, and some NGOs working in Vietnam.

2nd workshop: This final workshop expected to gather stakeholder’s comments on the
assessment and comparison of the proposed scenarios, the proposed mitigation
measures for environmental impacts, and the feasibility of the recommendations and
proposals.

Participants to this workshop were the same as the first workshop. Additional activities
on the side of the workshop included interviews with managers in the environment and
energy sector.

(2) Questionnaires:

The Impact Matrices were sent to provincial authorities responsible for environment and
power management. The Impact Matrices provide a list of impacts of power
development and grid expansion, and criteria to rank impacts. Impact Matrices for
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certain power development projects were sent to provincial Department of Industry and
Trade and Department of Natural Resources and Environment for provinces in which
significant investments were proposed in PDP VII. The results collected from the
provincial key informants provided additional information for the SEA.

A list of key informants for the Impact Matrices is included in Appendix 6. This list
consists of around 50 key informants whom the Impact Matrices were sent to.

4.2. Consultation Results

4.2.1. Consultation Results

a. Exchanges between the SEA Working Group and the PDP VII Working
Group

In May 2010, the power development scenario was completed and sent to the SEA working
group for assessment and analysis. Important details of this scenario are:

(1) Thermal power: According to this scenario, all gas-fired thermal power plants
will be converted to coal-fired thermal power plants after 2017 when gas runs
out, and all new thermal power plants are designed to be coal-fired.

(2) Power generation from renewable energy accounts for 3.1% of the total power
production, which is in line with the availablibility of renewable energy.

This power development scenario of PDP VII did not meet national targets for environment
and socio-economic development. The SEA working group has discussed this issue with
the PDP VII working group and proposed a reduction in power production from thermal
power and in the number of proposed coal-fired thermal power plants in order to reduce
coal consumption and its consequences.

In July 2010 the adjusted power development scenario was completed and sent to the SEA
working group again. The plan in this scenario is:

(1) Thermal power: the number of gas-fired thermal power plants remains
unchanged. A few more gas-fired thermal plants are proposed in the Centre, which
will be using imported Liquified National Gas. This means there is the need to
look for LNG sources for import.

(2) Power generation using renewable energy increases to 4%, mainly by small
hydropower development.

(3) Nuclear power: three more nuclear power generators in the Centre.

The PDP VII working group also considered two other alternatives that the SEA
working group proposed, which were:

+ To increase the electricity efficiency and conservation rate from 3% in the base case
to 5-8% as set out in the National Strategy for Electricity Efficiency and Conservation.
The calculation shows that there will be around 14,600 MW reduction compared with

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the base case scenario.

+ To increase the rate of electricity generation from renewable energy and nuclear power
from 4.1% in the base case to 8-10% as set out in the National Energy Development
Strategy. This means a reduction of 6,200 MW from coal-fired thermal power
production.

These two alternatives propose reduction in power generation, which means less
reliance on coal, less impacts from coal-fired thermal power production, and less cost
for the electricity sector.

However, the analysis of all scenarios shows that the base scenario is the optimal
scenario because it is not only feasible but also incorporating all social and
environmental issues. During the implementation of PDP VII, these two alternatives
should be considered for implementation to whatever extent possible. According to
analysis of the PDP VII working group, these two scenarios require big investment but
have low potential and high technical standards that are not easy to achieve.

b. Workshop

The 1st workshop focused on discussions and comments from the stakeholders about the
key environmental issues and the prospect of the SEA identifying all main
environmental issues related to PDP VII. Main discussions and comments are:

< Review of some indicators that might be beyond the scope of the SEA such
as social equity, food security, income gap and some other over ambitious
indicators. Environmental cost should be eternalized into the cost structure of
electricity. It is necessary to evaluate the environmental load of each power
development center.

< Power generation using fossil fuels contributes to climate change, rising sea
level and the overall sustainable development. It is necessary to develop
renewable energy. To achieve effectiveness in renewable energy
development, the government needs to develop and issue policies to support
the use of renewable energy.

< Power development needs to consider environmental impacts beyond the

national scale.

< Impact assessment should cover the issue of electricity import from
neighboring countries.

< The PDP VI did not meet the targets, which had negative impacts on socio-
economic development. Lessons learned from the implementation of PDP VI
should be considered and carefully assessed in PDP VII.

< Environmental assessment indicators need to be clear for each type of power
production. There needs to be an additional set of assessment indicator for
soil quality (especially for thermal power and nuclear power plants).
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Indicators for noise and heat pollution need to be considered for some types
of power plants.

< Environmental assessment for hydropower plants should include integrated

river basin management.

The 2nd workshop was organized on the 17 December 2010. The objective of this
workshop was to present findings of the SEA and to collect feedback from stakeholders
on these findings so that the SEA working group could incorporate the feedback into the
final report.

Over 70 invitees to the workshop were representatives of relevant ministries and

departments, research institutes, universities, management authorities at provincial
level, and Non-governmental organizations. Most of these participants also took part in
the first workshop.

c. Questionnaires

The Impact Matrices were sent to the provincial Department of Industry and Trade and
Department of Natural Resources and Environment in more than 50 provinces in which
significant investments were proposed in PDP VII. 48 provinces sent back the results,
which included their assessment on the impacts of power projects in their provinces.

Feedback Summary

The Impact Matrices were sent to the provincial Department of Industry and Trade and
Department of Natural Resources and Environment for provinces in which significant
investments were proposed in PDP VII. The Impact Matrices provide a list of potential
impacts by power generation and power grid development, together with a set of criteria
for ranking and an impact scoring system. The provincial departments were asked to
provide their answers about power development projects in their provinces based on their
knowledge of the issues. A list of recipients of the Impact Matrices is included in
Appendix 6.

The provincial consultations provide the knowledge and perceptions of managers at

provincial level, who will have big responsibilities in dealing with the potential impacts,
both positive and negative, from power plants in their local areas. In general, the
consultation results show that there was an acknowledgement of both positive and
negative impacts of power development. There were also concerns about certain
impacts and the characteristics of these impacts. The impacts were scored from 3 to -1,
with 3 for a big and unchangeable impact, 2 for a medium impact that can be mitigated,
0 for no impact, and -1 for a positive impact.

Thermal power development: Health impacts from atmospheric pollution and acid rain
were identified as the biggest concern by provincial authorities. Some concerns were
expressed about displacement of people and loss of agricultural land and houses. These
issues were thought as could be handled well in some provinces but were identified as
challenging or impossible by some other provinces due to the specific locations of the
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projects. The issue of solid waste raised a considerable level of concern, as identified in
about 50% of the responses. Some were concerned about greenhouse gases but scored
them quite low at 1 (as in small and indirect impacts). Loss of biodiversity was not an
issue of concern for most provincial authorities, except for several provinces that have
experienced this from past projects. This shows that the SEA was successful in bringing
this issue to the attention of local authorities and raising their awareness about this issue
for the implementation of power development projects in the future. The overall results
show that there is a good understanding about thermal power development and local
authorities have good understanding of their local situations and are concerned about the
potential impacts of thermal power development. However, local understanding about
long-term impacts of thermal development is still limited. Direct and immediate
impacts seemed to draw more concerns. Big impacts, such as climate change, were
often assessed as small and indirect. Therefore, climate change can be considered as a
national level issue.

Hydropower development: Social and environmental issues did not seem to draw much
attention. Most social impacts, such as impacts on livelihood, were scored very low.
Only a few provinces had different opinions on the matter. This raised the question
whether all issues related to compensation and resettlement are currently handled to the
satisfaction of the people and there does not need to be any additional support in this
area? The issues of biodiversity, loss of land and natural resources received more
attention. Many provinces gave high or medium scores for these issues. This is helpful
in terms of pointing out the local situation of understanding the issue and giving an idea
of what provinces might need attention when it comes to biodiversity issues in the
future implementation of hydropower development projects. The level of concerns
about impacts by hydrological changes also varied. Local authorities in some provinces
believed that hydrological changes could result in negative impacts but in some other
provinces pointed out that hydrological changes could be positive. The reasons for the
difference in opinions are unclear. Further research is required for a better
understanding of this difference. The issue of reservoir greenhouse gases did not raise
much attention.

Transmission line development: This area received the most attention. Most impacts
were scored medium or low. Very few provinces recognized the impacts of transmission
line development as big and serious. This reflects the fact that most provinces are
affected by transmission line development plan. In most cases, local authorities did not
recognize the impacts of transmission line development as the result of development but
only regarded them as losses for their provinces.

Overall, the provincial consultations provided the SEA working group a different view
about the environmental issues related to PDP VII. Most local concerns are about the
issues listed in the Impact Matrices. It was not a surprise to see that environmental
issues that are most concerned about are the ones that have significant and direct
impacts on people’s lives. Other issues that are less concerned about are issues that have
long-term impacts and are regarded as less serious. The provincial consultation results
reflect the fact that local authorities are more focused on their local issues in their
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decision-making, rather than national or global issues.

4.2.2. Opinions of the SEA Working Group Regarding Recommendations of the

Stakeholders during the Consultation Process

The 1st workshop gathered results beyond the expectations of the SEA working group.
Apart from comments on the methodology, approach, scope of research, and key
environmental issues for assessment of the SEA, further information collected included:
(i) the new government decree on payments for environmental services; and (ii) the
SEAs of hydropower projects in the Mekong River Basin.

To conduct a thorough research and to gather adequate information on the impacts of

power development projects in PDP VII, it will require an enormous amount of data and
will be costly as well as time-consuming. During the provincial consultation there was a
lot of missing information. However, local assessment of the impacts helped to increase
the reliability and reduce the uncertainty of this research.

The last workshop was an important activity because it gained consensus on the
research findings and the feasibility of the recommendations.

The very short (half day) workshop gathered many relevant and useful ideas regarding
the role of hydropower, how to balance water resources with integrated water resources
management, solutions for traditional cultural heritage preservation for ethnic minority
groups, resettlement, and livelihood. One of the issues that were most concerned about
in the workshop was the reliance on coal-fired power production. The SEA working
group has taken into account all the comments and feedback in the workshop and
adjusted the report accordingly.

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Chapter 5: Recommendations on Preventative and Mitigation Measures and
Enviornmental Management and Monitoring Programs

5.1. Options to Prevent and Mitigate Negative Risks and Enhance Positive
Potentials for the PDP VII
5.1.1. Prevent and Mitigate Negative Risks by Changing Project’s Plan, Location
and Scale

The world’s economy is in the process of post-crisis recovery and development, which
provides Vietnam with good opportunities to promote trade and attract foreign
investment. Economic development creates greater demand for electricity and presents a
larger market for the electricity industry, both in terms of production and geographical
coverage. The renovation roadmap of the electricity sector includes diversification of
investment in power production and development of various internationally available
power production models as part of the efforts to improve electricity productivity and
sales.

As discussed in the previous section, the SEA working group has considered the
pressure to find affordable fuel sources and to reduce the reliance on the international
fuel market to ensure energy security. The SEA working group then concluded that
coal-fired thermal power production would be the main type of power production in the
coming time although it is classified as the “dirty” type of power production. The
proposed base scenario for power development aims at ensuring minimum cost in the
context where oil price is climbing, natural gas reserve is limited, and it is not yet
possible to develop nuclear power.

The SEA working also tried to examine other options for energy efficiency on the basis
of government policies and national targets. The SEA working group has reached an
agreement with the PDP VII working group in developing two more alternative
scenarios based on certain assumptions. The two working groups also recommended
changes to the development scenario to reduce the number of thermal power plants to
reduce potential social and environmental impacts.

The alternative scenarios recommended for the preparation of the energy development
strategy might be not economically feasible, but are likely to have more positive social
and environmental impacts. The base case scenario for power development still has a
few shortcomings, as discussed below:

< The assessment of the primary energy potential and supply sources for power
production in PDP VII shows that thermal power will be the main power
source in the future, accept for nuclear power, and that thermal power will
rely mainly on coal. However, Vietnam will have to import coal from 2015,
which will affect energy security and primary energy supply of coal
exporting countries in the primary energy market.

< Diesel-fired and oil-fired thermal plants are considered as not economically
feasible compared with other thermal energy sources.
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< Nuclear power is not considered as an option in this research.

< Electricity import from neighboring countries is not regarded as an option due
to legal barrier and all of the above reasons.

< Increasing power production from renewable energy, including small

hydropower, is not considered as a feasible option because power production
from this source only accounts for a small proportion of the total power
production, and is mainly an option for areas that are not connected to the
main grid. On top of that, power production using renewable energy usually
requires high investment.

< Increasing productivity of pumped-storage hydropower is not considered as

an option because it is simply just a way of using electricity. This should be
combined with nuclear power development in Vietnam.

The assumptions in the alternative power development scenarios are based on the criteria
of: (1) reducing the number of thermal power plants as in the base case scenario; (2)
meeting all the environmental targets as discussed in the last chapter.

Alternative Scenarios for the National Power Development Plan

The SEA working group (with approval from the PDP VII working group) proposed
two more power supply scenarios for the national power development plan, which have
the following advantages and disadvantages:

Alternative Scenario 1:

- The energy efficiency and conservation target was set at 1-3% in the base case
scenario, which was believed to be feasible and achievable. In this scenario, the
energy efficiency and conservation target was set at 5-8% to be consistent with
the National Strategy for Energy Efficiency and Conservation. This higher target
of energy efficiency and conservation is for the best interest of the energy sector,
especially in terms of the use of primary energy.

In assessing the feasibility of this target, it is recognized that in the electricity

sector some energy savings can be done with the old fashioned coal-fired and oil-
fired boilers. However, this old technology only accounts for a small proportion
of power production in the electricity sector. Most energy savings should be
expected from electrical devices and electricity transmission. Most projects with
high energy saving potential in the National Targeted Program on Energy
Efficiency and Conservation have been implemented. The remaining projects
have lower energy saving potential. These projects are also more challenging to
implement, as the costs for implementing them are higher because they require
more advanced technologies and equipment. Power loss in transmission line is
currently under 10%. The goal is to reduce it to 7%. To achieve this goal, it is
required that the power transmission and supply system is upgraded to ensure
maximum transmission capacity and contingency. However, there has been not
227
much positive result and almost no significant improvement in the past few years
because the investment required for this work is too high. Investment
requirement to upgrade the power transmission and supply system can be seen as
a burden but also as an opportunity to invest into the electricity sector.

- The rate of energy efficiency and conservation that is feasible and investment
efficient for the electricity sector, according to expert opinion, cannot exceed
3%.

Alternative Scenario 2:

- The target of this scenario is to increase renewable energy use from 3.8-4%, as
determined in the research phase, to 8-10%. This new target is in line with the
National Energy Development Strategy. According to the calculations and
forecast of renewable energy in development scenarios in the Master Plan for
Renewable Energy Development I, the highest level of renewable energy use is
4.1%, as determined in the research phase. This target is achievable in theory,
considering the potential of all renewable energy sources. However, the potential
of using renewable energy for power generation is very low because of the low
technical and economic efficiency.

- On the other hand, investment for power development using renewable energy is
often much higher than other traditional forms of power development. On top of
that, power development using renewable energy has a very low resource
mobilization rate of only 1/3 compare with power development using other
energy sources, which is not very attractive to investors. Renewable energy
development clearly has many benefits in terms of the environment. However,
these benefits are not verifiable.

The conclusion drawn from the above discussion is that the optimal scenario for
power development for PDP VII, which should be both feasible and economically
efficient, is the base scenario. This power development scenario was chosen for the
planning phase of the PDP VII. In the preparation of the PDP VII, the power
demand forecast had taken into account the power demand for the period 2011-2030,
the rate of power saving and efficiency by using advanced technologies, and the
results of the DSM programs. A more sensible rate of energy efficiency and
conservation was identified at 3%, This is a new development from the PDP VI as
the result of the contribution of the SEA working group.

However, there are obvious benefits for the environment in the alternative scenarios in
terms of reducing the number of coal-fired thermal power plants: (i) the alternative
scenario 1 proposes a cut back of 16 coal thermal power plants (around 14,600 MW) –
most of which are not included in the plan and located in the South and the South
Central Coast where the ambient air is already compromised. This cut back on the
number of coal thermal power plants is expected to reduce the annual amount of
greenhouse emissions and the social cost of environmental pollution by around
US$3,893 million by 2030. It is also expected to result in a reduction of around 56.3
228
million tonnes of import coal, which would help to reduce the reliance on the
international energy supply market and prices (ii) the alternative scenario 2 proposes a
cut back of 9 coal thermal power plants (around 6,200 MW), which would result in a
reduction of 10.6 tonnes of coal and US$1,868 million of social cost. Although these
alternative scenarios are not optimal, it is recommended that more supporting measures
are applied to achieve best level of energy efficiency and conservation through
increasing the use of renewable energy in power production during the implementation
of the PDP VII. It is also possible to combine these two alternative scenarios during the
implementation of the PDP VII to achieve the desirable targets.

The power development scenario for the period 2011-2013 was based on the power
demand forecast and the socio-economic growth scenarios for the same period. The
accuracy of the power demand forecast is much dependent on the socio-economic
growth scenarios. Thermal power, especially coal thermal power, contributes the
biggest part of the power development plan. Power contribution from this source will
increase strongly in the future to 56%. The social and environmental impacts of thermal
power development will also increase, as well as issues related to energy security such
as the heavy reliance on fossil fuel sources and market prices, and global climate
change. The goal is to reduce the number of coal thermal plants to reduce the
pressure of these issues. Considering the existing conditions and capacity, the SEA
working group and other experts participating in the planning have assessed other
options such as energy efficiency and conservation, and development of renewable
energy at the highest level in order to achieve the pre-determined targets. However,
it is very difficult to achieve these targets because there are many challenges in terms
of technical requirements, management, and costs.

To increase the rate of energy efficiency and conservation to 5-8%, as specified in

alternative scenario 1, it is very important to use various methods to reduce the level of
power loss to under 7%. It is only possible if the power supply and transmission system
is upgraded to accommodate a better transmission capacity and contingengy. Research
and development of an ultrahigh voltage transmission system (100-1100kV) is
recommended for reducing the number of transmission lines and minimizing power
loss during transmission. Estimated investment packages for the expansion of the
500kV and 1,100kV transmission lines in the South East are US$1,164.4 million and
US$1,717.4 million, respectively, which means investment needed for the ultrahigh
voltage lines is much higher than for the 500kV lines.

Changes to the Scale and Location of Projects in PDP VII

The assessment in Chapter 3 shows that the zones of influence of several hydropower
and transmission development projects that are either very close or overlapping, which
intensifies the impacts. This is particularly true in cases of infringement to national
parks, nature reserves, special-use forests, biosphere reserves, and areas of significant
biodiversity, tourism potential and ecosystem services. Attention should focus on
minimizing potential impacts when mapping transmission line routes and planning
investment for hydropower projects. A list of 500kV and 220kV transmission line
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development projects that are planned to pass through national parks, nature reserves
and areas of high biodiversity density, which need consideration for impact mitigation,
is included in Appendix 4.

It is recommended that the two planned schemes, Dak Mi 1 and Dong Nai 5, are
actively examined for cancellation because of their likely severe biodiversity impacts.
The SEA working group also recommended that the Serepok 4a and the Dong Nai 6,
which are still in the site-planning phase, are excluded from the power development
plan.

It is further recommended that the thermal plants with big capacity, which are planned
for the drought-prone areas in the Central Region, are examined for possible reduction in
capacity to reduce their impacts. The Binh Dinh thermal power plant with a proposed
capacity of 4,400 MW is an example. A series of power stations with capacity of over
2,400 MW in Ha Tinh and Quang Binh and some coal thermal plants in the South are
also recommended for capacity reduction.
5.1.2. Mitigation Measures Involving the Organization of Implementation of
the PDP VII and Financial Mechanism

There are issues that need to be emphasized and turned in to actions during the
implementation of the PDP VII. These issues are:

Management Policies and Financial Mechanism

Requirements for Issues Related to Multi-purpose Water Resources Management and

Environmental Risk Mitigation:

- Develop and implement plans for water extraction and reservoir regulation in
accordance with the National Target Program for Integrated Water Resources
Management and the Irrigation Development Planning Program as discussed in Section
1.2.3.

- Finalize multi reservoir operation procedures for river basins. To date, there are 3
complete procedures for reservoir operation and management. However, all of them
have proven to be problematic during application. In response to this situation, the Prime
Minister has instructed the development of multi reservoir operation procedures for 11
river basins, based on the lessons learned from the implementation of the three existing
procedures.

- To study reservoir management (including of the current schemes) to assess the

potential of multi-purpose management method. This method must be applied from the
design stage, where hydropower schemes should consider their impacts on the whole
river basins to assess the costs and benefits of design modification to include purposes
beyond power generation.

The criteria for this should reflect national water management policies and priorities and
should specifically include the assessment of water release regimes necessary to
guarantee minimum environmental flows in order to ensure the maintenance of the
230
integrity of downstream ecosystems in dry season and flood control in rainy season.

There also needs to be regulations on the accountability of relevant parties responsible

for reservoir management in case of loss of ecosystem, life, and asset due to
mismanagement of water discharges.

Although general regulations on the need for this exist, they are not specific enough to
provide clear guidance for reservoir managers on the most appropriate regimes. The
basis for achieving this is the full participation of the power sector and the power
project investors in the emerging river basin management systems of Viet Nam. It is
recommended that a more detailed and thorough assessment of the costs and benefits of
multipurpose management should be undertaken (including distributive effects) and that
new reservoir management regulations should be issued for both existing and future
reservoirs to reflect the benefits of multi-purpose management within an integrated
water resources management context and based on cumulative river basin effects where
multiple reservoirs exist.

Benefit sharing mechanisms: the contribution of hydropower development to the long-

term development of communities in the vicinity of dam development is a key means
for ensuring that hydropower has positive impacts for local communities. The financing
of such development actions (such as infrastructure development, community forestry,
improved agriculture and enterprise development activities) should come from a benefit
sharing mechanism whereby a percentage of revenues from electricity generation is
provided for local development activities. A successful piloting of such a mechanism
under an ADB-funded project22 in relation to the A’Vuong hydropower scheme in
Central Viet Nam demonstrates the viability of such an approach and it is recommended
that this mechanism be adopted for all future hydropower development.

The overall power development plan requires coordination among relevant departments
to combine improved energy efficiency and accelerated renewable energy development,
while prioritizing fuel supply for domestic production activities and water resources
sharing. This would include further assessments of the potential scale and best sites for
renewable energy development as well as the means through which greater energy
efficiency and a reduction of future dependency on coal can be achieved for the
sustainable power development of Vietnam.

The assessment of approaches to improve management and operational efficiency in

the power sector through economic incentives needs to be explored. This includes options
to charge a fee for the use of cooling waters, polluter pays fees that reflect levels of
atmospheric emissions of particular pollutants, the establishment of a management
mechanism for the collected fees and the implementation of the recent national decree on
the payment or forest ecosystems services in relation to upper watershed management for
hydropower development. The MoIT should also define and enforce clear regulations on
the technologies to be used for thermal power generation so as to ensure that the highest

22
Haas, L., Dang Vu Tung and the Institute for Energy Studies (2007) Benefit Sharing Mechanisms for People
Adversely Affected by Power Generation Projects in Viet Nam Electricity Regulatory Authority of Viet Nam.
231
standards of generation efficiency and pollution mitigation possible are found.

Water quality management: Provincial Departments of Natural Resources and

Environment need to work with local people to manage and control wastewater
discharges from power stations and aquaculture, agriculture and tourism activities in
river basin areas.

Promoting renewable energy development: The Government and relevant ministries and
departments need to develop financial mechanisms to encourage investment in new and
renewable energy development. In particular, favorable policies, such as equipment
price and import tax support, prioritized access to loans and sites, are needed to
encourage investment from private and foreign sectors to renewable energy
development. With the right support, power production from renewable energy can
develop fast in the future to meet the desirable targets of the power development scenario
and to reduce investment from the government and government enterprises to the power
sector. Examples of this include the solar power project funded by the Vietnam National
Petroleum Corporation in the Spratly Islands, which brought invaluable benefits to local
people, and the big wind power project in Binh Dinh, which is being implemented by the
Song Da Joint Stock Co.

Energy saving and efficiency: The next phase of the Energy Efficiency and
Conservation Program will be implemented and strengthened in all sectors and all parts
of the country. Specific measures are:

(1) More research on technology improvement to promote electricity saving.

(2) Changes to the pricing mechanism of electricity to eliminate cross-subsidies to
reduce power consumption.
(3) Monitor and supervise localities and individuals in implementing the Prime
Minister’s Decision No.79/2006/QD-TTg, dated 14 April 2006, on approving the
National Target Program on Energy Efficiency and Conservation, and Decree
No.19/2005/CT-TTg, dated 02 June 2005, on electricity saving.

Rational extraction and use of fossil fuels such as oil, coal, and natural gas. The
Government, MOIT, and energy corporations should pay more attention to issues
related to the extraction and use of fossil fuels. The level of fossil fuel export should be
managed to prioritize energy for domestic production activities. Attention should also
be paid to the market fossil fuel prices to make sure that energy corporations can still
sustain their income.

If this is done well, Vietnam will have a better chance of delaying coal import and
reducing reliance on the availability and prices of primary energy in the world’s market
to strengthen national energy security.

Resettlement and livelihood for local people: Although the recent Decree 69 has shown
many positive changes in terms of meeting the needs of displaced people and motivating
investors to fulfill their responsibilities, it is still inadequate, as discussed in Chapter 2
and 3. There is a need for an accountability mechanism that legally binds project
232
investors with their responsibilities for displaced people. This mechanism should
include:

- Requirements for selecting resettlement location and production land to avoid

situations where people are relocated to areas where they cannot grow crops such
as in special-use forest or low quality land or areas that are prone to landslide,
etc.
- Requirements for construction quality of infrastructure, houses, and supporting
facilities within resettlement area.
- Requirements for a timeframe within which a resettlement package should be
implemented, and transparency requirements to ensure that the compensation
package enables local people to sustain their lives after being displaced.

To fulfill these requirements, there needs to be collaboration amongst relevant agencies

such as MoNRE, MARD, MOC and other specialized agencies at different levels.
The “responsible persons pay” solution: There are laws and national decrees,
standards, and regulations concerning gaseous emission. Thermal power plants are
often equipped with treatment facilities, which are continuously improving. Although
there have been efforts focusing on limiting the amount of gaseous emissions, there
needs to be mitigation measures for the impacts. It is recommended that part of the
costs associated with environmental and health impacts as the result of gaseous
emissions from power generation is covered by owners of the emission sources, as a
contribution to the community and society. There needs to be a legal document that
specifies how this contribution should be collected from the owners of the emission
sources, following the example of similar process in wastewater management.

This financial contribution should be managed in an efficient manner. Experiences show

that the National Environmental Protection Fund has not been successful in achieving
the goal of providing financial support for environmental protection and environmental
accident recovery. It is proposed that financial contribution from thermal power plants
that release gaseous emissions is used to invest in infrastructure development for local
communities and to support the public health system through health insurance and
development and maintenance of health care facilities. Part of the investment should
go to nature reserves to increase carbon absorption capacity, and to the development
of renewable energy and other activities that promote energy efficiency and
conservation.

The Regulatory Framework for Nuclear Development

A critical constraint to the safe development of nuclear power in Viet Nam is the lack of
radioactive management regulations and norms, along with experience in the
construction and operation a nuclear power plant.

Nuclear power development requires agencies to work together closely to develop a

legal basis and conditions for radioactive safety to:

< pass appropriate laws and regulations based on international experiences in

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planning, designing, construction and operation of nuclear facilities.
< establish clear and detailed operational guidelines for all stages of the
planning, construction and operation of nuclear facilities.
< define and implement a sustained program of training and capacity
development, including building institutional capacities, for the planning,
construction, operation and independent monitoring and supervision of
nuclear facilities to ensure absolute conformity to all regulations.

These steps represent a significant investment that must be seen as an integral and
indivisible part of the costs of establishing nuclear power in Viet Nam. The absence of
such a system of regulations, guidelines, institutional and human capacities and effective
monitoring and supervision will significantly increase the likelihood of a catastrophic
accident, potentially with devastating releases of radiological material. This is one of the
most important mitigation measures for nuclear power development in this SEA.

5.1.3. Mitigation Measures for Inevitable Adverse Impacts and Directions for SEAs
of PDP VII Sub-component Projects

5.1.3.1. Thermal Power Mitigation Measures

Assessment of the scenarios included in PDP VII (see Chapter 3) shows that potential
impacts from the atmospheric emissions from thermal power, especially coal-fired
thermal generation, is the most serious issue in the SEA of PDP VII. These impacts
have very high social, environmental and economic costs. It is concluded that the
identification of possible options to reduce the future dependency on coal-fired power
generation is consequently the key to the mitigation of adverse social and environmental
impacts from PDP VII.

There are many management and financial solutions to support the two alternative
scenarios proposed by the SEA working group, such as:

Various solutions could be applied to achieve the energy savings potential of around
36% in the residential sector, and more than 20% and 12% in the industrial and
commercial sectors. The World Bank’s Commercial Energy Efficiency Program
(CEEP), which involves pilot projects in commercial and industrial sectors, shows
project savings between 15-30%.

EVN’s DSM Assessment Study considered achieving the 5-8% electricity savings target
set under the Vietnam Energy Efficiency Program (VEEP) for the period 2010-2015 and
gradually increasing this savings target to 20% of the total electricity demand during the
period 2015-2030. These targets bring down the country’s electricity elasticity (ratio of
growth rate of electricity demand and growth rate of GDP demand) from a high of 1.90
in 2010 to 0.85 in 2030, which is consistent with those of many efficient developing and
developed countries.

Achieving these high levels of energy efficiency improvements requires successful

implementation, enforcement and large-scale replication of the measures identified in the
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VEEP. This includes: i) legislative frameworks on energy efficiency and conservation in
all the sectors of the economy were formulated and effectively enforced; ii) education
and information dissemination systems established and projects in the residential sector
implemented; iii) energy efficiency standards and labeling systems introduced and
assistance extended to domestic appliance manufacturers; iv) energy efficiency and
conservation management models developed and support provided to industrial
enterprises; and v) capacities strengthened related to energy efficiency and conservation
in building design and management as well as successful demonstration of projects
related to building energy efficiency improvement.

The DSM program will expand to include measures and actions to reduce the gap
between planning and implementation, and to tackle the lack of human and financial
resources to implement the measures, and the lack of a monitoring and evaluation system
and coordination amongst relevant parties to achieve energy efficiency targets.

One of the critical factors, in addition to the regulatory and management measures, is
financing of energy efficiency activities and projects. An energy efficiency fund could
be established to support activities and leverage private sector investments. Similarly,
the market for energy efficiency services and the establishment of energy efficiency
service companies should be stimulated and supported by the government.

Solutions for Increasing the Use of Renewable Energy in Power Generation

The second major element of any strategy to reduce the levels of coal-fired power
generation needed in the future is to generate the electricity from other sources. Under
the existing base case of PDP VII, large-scale hydropower will be close to maximized
in terms of feasible hydropower construction sites, nuclear power will be developed at
as fast a rate as is feasible for Viet Nam and both oil and gas will be at levels that are
as high as is likely to be economically and technically feasible. This leaves the further
rapid expansion of power generation from renewable energy sources as the outstanding
option for reducing coal consumption and impacts through substituting alternative
power generation sources.
At present, grid connected renewable energies are mainly from small hydropower
systems, which are projected to increase from 461 MW in 2011 to 3,129 MW in
2030. Wind power generation will increase from a minimal level at present to 2900
MW by 2030. For this renewable energy scenario, an additional 4800 MW of small
hydropower systems and 3000 MW of wind power plants are to be installed.

To achieve the goal of renewable energy development, the government should

encourage investment into this area through the introduction of favorable laws,
policies and a special legal framework to support the participation of private national
and international investors.

However, according to the most recent statistics in the strategic report of the Vietnam
Renewable Energy Master Plan I, renewable energy supply potential of Vietnam is
rather limited (see table below). Total renewable energy potential is estimated at 11.17
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million Wh/year in 2025, and the total power generation from renewable energy in
2008 was only at 159.39 MW, of which 132.23 MW was not connected to the grid.
The base scenario of PDP VII expects 13.021 million Wh or 4,829 MW from
renewable energy in 2030, which means more than 81% of total renewable energy
potential would be used for power generation in 2030.

The cost of renewable energy is higher than any other traditional forms of energy for
three reasons: (i) Low capacity level and power generation is dependent on weather
conditions (wind generators, solar energy, tidal harnesses, small hydroelectric), and
seasonal (biomass, biogas, etc.); (ii) the government still supports the use of
conventional forms of energy; and (iii) inadequate investment into research to reduce
price and increase productivity of renewable energy equipment and technology.
Renewable energy development currently still needs government support with the
level of support depending on many factors such as type of technology, target users,
time and length of support.

According to calculations in the Renewable Energy Master Plan I, the cost of coal-
fried thermal is the lowest in thermal power production. The cost of electricity
generation using wind power is much higher (even when the investment package was
at US$1,000/kW) than thermal power using coal or gas (although the investment
package was assumed to be at US$1,750/kW, which is much lower than in reality), but
lower than thermal power using oil.

Table 5.1. Renewable Energy Potential for Power Generation in Vietnam – Alternative
Scenario 2

Potential
Source Potential Capacity Annual Cost
location MW Production USD/KW
Small hydropower GWh/year

Technically exploitable 1,050 4,015 16.4 1,200 (50%

performanc
e load)
Economically exploitable 408 152 13.35
Geothermal 1,700
Technically exploitable 269 400
Economically exploitable 6 112.7
Wind 1,000 (25%
39% of performance
Technically exploitable Vietnam’s 22,400 load)
territory

Economically exploitable 12 1,785

236
Biomass
Bagasse 1,200
Technically exploitable 276 1,10
Economically exploitable 221 3
882
Rice husk 1,600
Technically exploitable 225
Economically exploitable 197 299
Solid waste/ landfill gass
Technically exploitable >15 298 214 NA
Economically exploitable
PV solar
Technically exploitable 11 provinces 0.00124
Economically exploitable
Tidal harness 14 1,60
0
An Integrated Solution

The issue of whether it is feasible to combine the two proposed alternative scenarios to
reduce environmental and social impacts of coal-fired thermal power needs further
and more in-depth consideration. To do this, it is advised to consider all technical and
economic aspects of renewable energy potential. This strategy should also be used as
the basic framework for actions in PDP VII to achieve sustainable development goals.

5.1.3.2. Hydropower Mitigation Measures

Mitigating social impacts: SEA proves that power development can cause many
impacts to local communities, displaced residents and residents living in affected area.
Here are some detail suggestions for social impacts:

< A package of mitigation measures for displaced people.

< Support for local communities in resettlement areas.
< Support for agricultural development.
< Mitigate the risks caused by reduced access/exploitation of forestrial
resources.
< Introduce PES based on national regulations to encourage river basin
management.
< Mitigate the risks caused by reduced access to aquatic ecosystem resources.

In general, mitigation measures for social impacts defined in SEA are over the limit of
cover method that are only defined and compensated for direct measurable impacts.
Components on this mitigation package supply a comprehensive method to ensure that
power sector is dynamic sector for development, poverty reduction in project areas.

SEA report defines a mitigation package for social impacts that affect to comunities
displaced for power development based on Model of “Impoverishment, Risk and
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Reconstruction„23 that includes advanced approachs of resettlement. This package
consists of mitigation measures for long-term livelihold development, poverty
alleviation for affected comunities. Cost for this package increase but it does not affect
to the economic feasibilty of each project. This cost is only 23% higher than cost of
mitigation measures mentioned in PDP VI study. This cost should be considered as a
part of cost for hydropower sustainable development and more social responsibility.
Compulsory regulation should be established soon for all power projects including
projects owned by individual invester at provincial level.

Resettlement “host” populations: the risk of negative impacts on the host populations
where resettlement takes place are significant but are impossible to predict until the
specific resettlement sites are identified. Nonetheless, mitigation measures can be
identified. The approach recommended is to ensure that the host populations are
provided with the same development possibilities as the resettled households, with in
particular investments provided to ensure that they have equal access to basic services
and livelihood development opportunities. The planning of resettlement and
development activities should be jointly undertaken by the resettled and host
communities, providing a means to build mutual understanding and shared development
objectives and ensuring that the potential resentment of host populations to the resettled
communities is reduced.

Reduce impacts to forest resources: the SEA has identified the risk of negative impacts
on forest resources in the areas affected by the planned schemes. The valuation of these
resources estimated their total value as being over US$7 billion, so even a relatively
minor negative impact can have a high value. These risks reflect increased pressures on
forest resources due to a combination of increased population and the possible reduction
of forest area and quality. These impacts can be mitigated through the introduction of a
community forestry programme in areas where there is a risk of increased stress on
forest resources; that is, in zones of influence where there is a high dependency on
forests as part of local livelihood patterns and where the density of population is such
that potential declines in forest area and/or quality could result in unsustainable
pressures. The costs of the community forestry should be internalised in the
calculations of the hydropower development costs. Community forestry is organised at a
village level, with standardised unit costs per village of approximately US$45,000 per
village group. It is estimated that the likely total cost of the introduction of community
forestry would be minor compared to the resource value of forest areas under risk from
hydropower development and that economic rates of return in the order of 10:1 or more
could be expected.

Development of the Payment for Environmental Services: The Government Decree No.
99/2010/ND-CP, dated 24 September 2010, on Payment for Environmental Services
(PES) for water management and erosion control are being introduced at a uniform level
of 20 VND 20 VND/kWh. This will provide an important revenue stream for upstream

23
Cernea, M. (2000), Impoverishment, Risk and Reconstruction: Model of population movement and Resettlement in Cernea,
M. & McDowell, C. (2000) Impoverishment and Reconstruction: Experience of resettles and refugees, World Bank,
Washington DC. Experience of resettles and refugees, World Bank
238
resource owners that will have major local development benefits. For example, the pilot
study in Lam Dong Province has resulted in many poor upland families gaining PES
income that has nearly doubled their existing cash income streams. The PES system
can be perceived as an additional charge to the hydropower sector, but if it results in the
successful preservation of upstream forests, with better water management and reduced
siltation, it is likely to be beneficial in economic terms to the hydropower sector by
significantly extending the life of many hydropower schemes. This system is
consequently an important and positive mitigation measure that benefits both local
people and the hydropower sector.

Mitigating negative impacts on quatic resources: the National Hydropower Plan (NHP)
identifies the lengths of upstream and downstream rivers that are likely to be severely
affected by the individual hydropower schemes. The impact on the availability of
aquatic resources is likely to be severe in most cases. It is estimated that over 100,000
people live within one kilometre of these lengths of affected rivers and rely on these
resources to a greater or lesser extent. These can be mitigated by the introduction of
measures such as aquaculture development, the introduction of hatcheries to reintroduce
productive fish species and the development of alternative livelihood options. The
provision of these investments should be an integral part of the planning of each scheme
and the costs of such measures (which in most cases will not be particularly expensive)
internalised in the cost calculations of the different schemes.

Identifying and mitigating biodiversity impacts: the assessment of potential biodiversity

impacts of the hydropower schemes assessed in detail in the SEA found that there are a
number of schemes where potential risks to biodiversity are of particular concern. This
is a combination of fragmentation risks, where a high proportion of key biodiversity
areas lie within a zone of influence, and inherent biodiversity value as represented by
the presence of endangered or indigenous species. These concerns are compounded
where there are several schemes within a river basin. They will also be compounded, as
we have seen, by fragmentation due to the expansion of the transmission grid. Where
risks to biodiversity are high it is recommended that the planning process for the
hydropower scheme and/or the construction of transmission lines include the detailed
assessment of likely impacts and a biodiversity action plan, including necessary
funding, to ensure that adequate protection measures are introduced and implemented.

A key part of this will be the establishment of protected areas in localities where
threatened key habitats do not have a protected status. The mitigation measures should
also include exploring the costs and technical feasibility of transferring key endangered
species to new habitats.

It is also recommended that an education and awareness programme on the importance

and value of biodiversity resources is developed for implementation both in the sites
where schemes are constructed and for wider stakeholders involved in the sector. As with
other areas of mitigation, the costs of biodiversity protection measures should be
internalised to the calculation of the economic costs of individual hydropower schemes.

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5.1.3.3. Nuclear Power Mitigation Measures

The first priority in the planning phase of a nuclear power plant should be to comply
with regulations on radiation safety, including first of all the safe radioactive isolation
distances. These are the absolute isolation zone, the protective isolation zone, and the
peripheral isolation zone and emergency evacuation zone. In this, it is essential that
Viet Nam follows international standards and good practice.

The planning of the location and layout of the plant must pay attention to issues of the
environment, natural resources, economy and society in the region besides requirements
in terms of economic, technical, and transport aspects.

The construction phase should consider design options to ensure absolute conformity to
all regulations regarding health safety for workers, including evacuation procedure and
radioactive management.

It is necessary to define and implement a sustained program of training and capacity

development, including building institutional capacities, for the planning, construction,
operation and independent monitoring and supervision of nuclear facilities to ensure
absolute conformity to all regulations.

5.1.3.4. Transmission Line Mitigation Measures

The inherent nature of the most important impacts of the transmission lines mean that
they are difficult to mitigate in any way other than changing the route of the line so that
it passes through less sensitive localities. This is of particular importance in relation to
the issue of ecosystems fragmentation. It is recommended that assessments are
conducted for projects included in the plan that have transmission lines passing through
national parks (see list in Appendix 4) to evaluate the scale and level of fragmentation
for adjustments in later phases.

The use of ultra-high voltage cable (1,100KV) is recommended to reduce the number of
lines (for example in the South East route, the number of line was reduced from ten
500kV lines to four 1,100kV lines. It is also recommended to use transmission lines that
require less space for the safety corridor to save land and reduce risk of impacts.

Physical barriers to at least prevent and control the entry of motorized vehicles (both for
the project activities or others) into forest areas opened up by transmission line routes
should also be a mandatory requirement. It will not prevent all access, and will need to
be maintained, but it can at least limit illegal logging and encroachment for commercial
purposes.

The local communities and the Forestry Department (under the provincial Department
of Agriculture and Rural Development) should be notified about line routing, any
possible environmental impacts, and planned protective measures to have the
opportunity to provide feedback and to collaborate in the planning and implementation
of the forest protection programs to ensure that the line construction does as little
damage to the integrity of the forest area as possible.
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The final area where mitigation measures should be introduced is with regard to the
possible health risks associated with EMFs from the transmission system. Line routing
should avoid residential areas. Regulations about safety corridor for transmission lines
should be strictly followed.

5.1.3.5. Orientation for the SEAs of PDP VII Sub-component Power Projects

Thermal power projects

Thermal power projects are often located in river basin and delta areas where the
population is high and the existing ambient air quality is either already compromised or
already beyond the limit in some areas. New projects planned for these areas must
strictly follow the requirements for environmental protection and therefore the cost for
environmental protection of these projects would be much higher. The assessment in
Chapter 3 leads to a proposal to reduce the number of thermal power plants based on
some specific criteria, such as time of operation, in order to systematically optimize the
power plan. Some thermal power plants recommended for cancellation are the ones that
have not had fixed locations and that are likely to affect agricultural land in the future.
These plants were expected to be in operation in 2009-2030.

Thermal power plants in economic focal regions and big cities with high concentration
of population and industrial parks, such as the Red River Delta and the South East
Economic Regions, need to be monitored closely to ensure that environmental
protection requirements are strictly followed. This is necessary because the environment
quality in some of these areas is already beyond the limit, in regards to both air and
water quality. It is further recommended to pay more attention to the issues of erosion
and impacts on aqua-habitat ecosystem in estuaries and coastal areas where clusters of
big thermal power plants are planned. These issues can be addressed by adjusting the
station capacity and planning fewer big power plants in one area. Attention is needed
when preparing strategic environmental assessments for and during the implementation
of thermal power projects in Quang Ninh, Hai Phong, Ha Tinh provinces (such as the
Quynh Luu, Vung Ang 1, 2 and 3), and other thermal power projects such as the Long
An, Song Hau, Long Phu, Duyen Hai 1, 2 and 3.

Regarding social issues, it is important to implement compensation and support policies

in accordance with the Government Decree No. 69/2009/ND-CP, dated 13 August 2009,
on additional provisions for land use planning, land prices, land acquisition,
compensation, support and resettlement. However, SEAs should do better in assessing
social impacts and long-term costs to support displaced people, as proposed in Chapter
3, to ensure that these costs are internalized in the calculations of project investment.

Hydropower projects: Most of hydropower projects included in PDP VII are either in
construction phase or investment preparation phase. Therefore, recommendations for the
SEAs of these projects are no longer needed. Issues that need attention in the future is
revision of the implementation of hydropower projects, particularly the resettlement and
compensation aspects, and evaluation of the quality of life of the displaced people,

241
especially after 3 years or more. The situations of forest ecosystem fragmentation, loss
of upstream forest, water management and hydrological regimes in river basins where
many hydropower projects have been implemented also need to be evaluated. Further
recommendations can then be made to relevant ministries and departments on protection
of the remaining forests, reforestation and support to displaced people who are still
struggling.

Transmission line development projects: it is necessary to identify the level of damage

to sensitive ecosystems and fragmentation of biodiversity areas to consider if re-
routing is necessary. The construction of transmission lines should be planned to best
minimize or avoid ecosystems fragmentation. In case fragmentation is inevitable, it is
necessary to propose solutions for protecting the remaining of the ecosystems to limit
the risk of total damage.

Nuclear power projects:

The most important measures involve site selection and absolute conformity to nuclear
safety regulations from planning, designing, construction and operation of nuclear power
facilities. The SEAs for nuclear power projects will base on these established criteria and
the following design features:

There needs to be two separate sewage networks – one for the inside of the factory
boundaries and one for the outside of the factory boundaries, both need to comply to the
following rules:

- Sewage networks need to ensure that rain water drains quickly without causing
any overflowing.

- Wastewater contaminated with radioactive or chemical materials needs to be

collected and treated within the factory in accordance with Vietnamese
environmental standards before discharge.

- Cooling water intake and outlet structures need to be designed and placed in
locations that have the least impact on the sea ecosystem. Temperature of cooling
water when discharged needs to be lower than water temperature in the cooling
tower to ensure no impact on the ecosystem.

Resettlement and compensation for displacement of people as the result of nuclear

power development need to follow the national standards for resettlement package as
for other forms of power development.

Rational site selection and technical solutions embedded in design of nuclear power
plants can minimize impacts on aqua habitats and coral reefs. It is recommended that
different options are considered for site selection and construction of nuclear power
plants to maintain local scenery and to reduce impacts on local tourism. During project
implementation, it is proposed that the project works with science institutes to
develop optimal conservation plan for the project. Detailed research and mapping of
coral reef areas are needed to protect the aqua-systems and aquatic resources.
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During operation, each of the 1,000 MW generators of the two planned nuclear power
plants uses around 252,000m3/h of cooling water. It is absolutely necessary to have
solutions for surface water protection, which should be based on integrated water
resources and ecosystem management principles. A system should be established for
controlling water pollution. All calculations, monitoring and supervision of wastewater
discharges need to strictly comply with environmental protection standards for all kinds
of wastewater, including domestic wastewater and cooling water.

Cooling water discharge needs to be less than 40oC, as specified in Vietnamese

Standard QCVN 24:2009/BTNMT. If the temperature of cooling water discharge is at
40oC or higher, the system design needs to be examined and adjusted to reduce the
temperature of cooling water before discharge. Cooling water should also be treated to
ensure that the level of radioactive contamination (if any) is lower than the permitted
level before discharge.

Treatment facilities need to be installed for smoke and radioactive contaminated

gaseous emissions in accordance with radioactive safety regulations. Air circulation
system also needs to be installed using appropriate technology to be complied with safety
regulations.

5.1.4. Mitigation Measures Using Scientific and Technological Advances

Scientific and technological advances play an important role in power development, as

they provide solutions for fuel efficiency and reduction of power loss and gaseous
emissions. Scientific and technological advances that should be considered for the
implementation of the PDP VII include:

+ New technologies in thermal power development such as critical or super-critical

thermal power technologies, which improve fuel efficiency.

+ Advanced treatment technologies for gaseous emissions and wastewater, which result
in high treatment performance, such as carbon capture and storage technology.

+ Installation of high capacity generators in one location when possible to reduce

cost and investment capital.

+ Smart grid technology for grid development and use of ultra-high voltage
transmission lines to reduce the total number of lines and consequently the land area
needed for safety corridor.

+ Technologies for treatment and reuse of waste materials, especially coal ash.

5.1.5. Regional Power Integration with Other ASEAN and GMS Countries
Grid connection with Laos and Cambodia creates an opportunity for Vietnam to explore
further grid connection and power trade with other ASEAN countries such as Thailand
and Malaysia. Regional grid connection brings significant benefits, such as lower level
of power reserve for the inter-connected power system, higher operation efficiency, and

243
possibility of installing generators of bigger capacity to take full advantage of domestic
hydraulic power. An inter-connected power system also allows a more flexible
operation mechanism and reduces gaseous emissions to 15-20% compared with separate
national power systems. Overall, it contributes to sustainable energy development and
promotes international integration and regional cooperation.

Grid connection plan with Laos: In 1998, Vietnam and Laos signed an agreement,
according to which Vietnam would buy 2,000 MW from Laos by 2010. On January 10,
2008, the Governments of the two countries signed an agreement on economic, cultural,
scientific and technological cooperation, which specified that Vietnam would import
over 5,000 MW from Laos by 2020 through two 500 kV transmission lines. In the
present, there are 35 kV lines transmitting electricity from Vietnam to several areas near
the border in Laos. It is expected that in the period 2010-2011 Vietnam will import
electricity from various hydropower plants in Laos, such as the Sekaman 3 (250 MW),
Sekaman 1 (320 MW), and Nam Mo (105 MW), etc. In the period 2016-2017, Vietnam
will import 1,410 MW from the Luong Pra Bang hydropower plant, which is located on
the Mekong mainstream.

The power connection plan with Laos is as follows:

- From Southern Laos (Ban Sok) to Pleiku is a 500 kV line from the 500 kV Ban Sok
station to the 500 kV Pleiku station, covering a distance of 180 km. This line will
transmit electricity from hydropower plants on Sekong River such as the Se Kaman 1,
Se Kong 4, Se Kong 5, and Nam Kong 1 & 2, etc., with total capacity of nearly 1,600
MW. In the future, this line can be connected to the power system in Thailand through
Udon area.

- From Northern Laos (Luong Pra Bang) to the North of Vietnam is a 500 kV line from
Luong Pra Bang hydropower plant to the 500 kV Nho Quan station, with total capacity
of 1,410 MW. The total length of this line is around 400 km.

Grid connection plan with Cambodia: There is an agreement between the Vietnamese
and the Cambodian Governments about Vietnam selling electricity to Cambodia to
supply for the Phnom Penh area via a 220 kV line from Chau Doc through Tinh Bien
and Ta Keo to Phnom Penh with a total capacity of around 200 MW.

The two hydropower schemes Ha Se San 1 and Ha Se San 2 are both funded by EVN
International Company. After 2010, Vietnam will import electricity from several
hydropower plants in Cambodia, such as the Se San 5 (90 MW) and Ha Se San 2 (420
MW). It is expected that Vietnam will import over 1,000 MW from Cambodia by
2020, and 2,000 MW by 2030, when Cambodia has developed more hydropower plants
on the Mekong mainstream.

Grid connection plan with Yunnan (China): Yunnan province in China, north of
Vietnam, has a high hydropower potential of over 400 billion kWh. By 2008, Vietnam
had imported over 550 MW of electricity from Yunnan through 110 kV and 220 kV
lines. A grid connection plan using 500 kV line is currently under preparation. If this

244
plan is implemented, Vietnam will import between 2,000 MW and 3,000 MW from
China between now and 2020.

From the analysis above, the total amount of electricity import from neighboring
countries can be between 5,000 MW and 6,000 MW by 2025 and between 8,000 MW
and 9,000 MW by 2030. However, these calculations are solely based on assumptions
from the Vietnam side. Whether it is possible to import electricity to Vietnam and what
would be the possible amount depends the opinions of the other countries, and on
whether a consensus is reached. This means there is uncertainty over the possibility to
import electricity from neighboring countries.

The Trans-ASEAN Gas Pipeline Project is also being promoted. This project explores
the possibility to connect big oil fields in Indonesia and Malaysia with Singapore,
Thailand, and Vietnam through a pipeline network on the continental shelf. If all goes
well, Vietnam is expected to be connected to this network in the late 2020s. Within
the ASEAN grid connection plan, Vietnam might be able to connect with Thailand
through other countries and through the 500 kV lines between Vietnam and Laos.

Whether these plans and projects are feasible or not depends on the economic
development of each country in the region, influences of the global market, and national
and regional policies for bi-lateral and multi-lateral cooperation.

5.1.6. Other Mitigation Measures

This section discusses mainly mitigation measures for the construction phase, which
should form the basis for implementation of the next phases of the projects included in
the power development plants.

Transportation, supporting facilities and infrastructure: Impacts of complementary civil

works often contribute to environmental deterioration, including forest ecosystem
deterioration, and reduction of agricultural land area. The impacts are usually not
obvious at this stage – it is either not easy or impossible to identify them. Therefore, it
is recommended that studies are conducted during implementation to evaluate
environmental factors related to these works, particularly in relation to the location,
construction plans for complementary civil works, total affected land area, and other
effects. Special attention should be paid to the effects that power development projects
might have on local traffic. As the pre-project road conditions are to accommodate local
traffic only, appropriate solution might be needed after the project commences to make
sure that the extra load of traffic from the project will not affect local people, damage
roads and cause traffic accidents.

Quarries and borrow pits are used to provide material for construction of power plant
and other complementary works. They can considerably increase the area of natural
habitats or agricultural lands that are lost to a power development project. To the
greatest extent feasible, quarries and borrow pits should be sited within the future
inundation zone. Where this is not possible, the pits should be rehabilitated after use,
ideally for conservation purposes such as wetland habitats.

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The Ministry of Commerce and Trade and the Ministry of Natural Resources and
Environment need to have supporting policies and measures to promote the development
of technologies for reusing coal ash from coal-fired thermal plants. If coal ash is reused,
thermal power plants will not need to look further for storage area and the costs of
management and environmental treatment for coal ash storage areas will be reduced.
Storage area of coal ash is currently a pressing issue for coal-fired thermal projects in
Vietnam and it will persist in the future without a practical solution.

5.2. Environmental Management and Monitoring Programs

5.2.1. Objectives of Environmental Management and Monitoring Programs

Objectives of Environmental Management and Monitoring Programs of the PDP

VII are:

- To ensure that all environmental targets for the PDP VII are met, and electricity
development is done in a sustainable manner, both in terms of the economics and the
environment.

- To make sure that all power projects recommended for cancellation in the previous
sections of this report will not be implemented without commitments and detailed
solutions to avoid or mitigate all the potential impacts.

- To ensure that the proposed mitigation measures will be implemented well and to
collect information about changes to the environmental quality on a regular basis to
promptly detect any negative impacts on the environment caused by sub-component
projects.

5.2.2. Environmental Management Program

In order to manage and supervise the environmental protection targets of the PDP VII
effectively, it is recommended that a working group is set up to supervise the activities
and to collaborate with relevant ministries and departments in support of the full
implementation of the proposed mitigation measures and recommendations for the PDP
VII and the sub-component projects.

This program will supervise and provide guidance for project investors to ensure energy
efficiency and full conformity to environmental laws and regulations.

5.2.3. Environmental Monitoring program

The main principle is to ensure full conformity to national guidance and guidance of the
Ministry of Commerce and Trade on environmental management. Detailed tasks are as
follows:

Monitoring is required for the implementation of environmental protection measures in

power development projects included in the power plan. Special attention is needed for
projects that are recommended for cancellation in the SEA. It is necessary to monitor
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the conformity to environmental protection requirements of power projects during
operation phase.

Required monitoring activities are as follows:

1. Monitoring of waste discharges and gaseous emissions, including wastewater,

CTR, CTNH, etc., and of the atmospheric pollutants in the surrounding
environment (PM, SO2, NOx);

2. Monitoring of wastewater quality from power production facilities and domestic

use to ensure conformity to Vietnamese Standards QCVN 24:2009/BTNMT and
QCVN 14:2008/BTNMT, and changes to surface water quality;

3. Monitoring of soil quality;

4. Monitoring of the impacts on ecosystems, national parks, and nature reserves.

There needs to be research and statistic collection to assess these impacts as well
as to find out the causes for timely interventions.

5. Monitoring of the progress of displaced people in resettlement areas. All

indicators should be monitored, such as level of people’s satisfaction with their
home, their livelihood and income, their living arrangement, etc.

6. Revision and improvement of detecting systems for environmental risks

and accidents during the implementation of PDP VII for timely
interventions and remedies.

Monitoring is required for all locations of sub-component power projects.

The project owners can either take charge of the monitoring, or hire independent
environmental companies for this job.

5.2.4. Reporting Mechanism during Implementation

The reporting needs to be in accordance with regulations by the Ministry of Commerce

and Trade and the Ministry of Natural Resources and Environment:

The environmental working group of PDP VII should report to the Minister of
Commerce and Trade every 6 months on the progress of power projects in the plan. The
report should specify what mitigation measures have been implemented and the results.
Information on challenges during the implementation and plans for the coming projects
should also be included.

An annual report on environmental protection progress of the power plan is required.

This report should include environment related information from all power projects,
including information about the good progress as well as mitigation measures that are
challenging or impossible to implement, and the support needed.

Environment reports of PDP VII can be sent to leaders of the Ministry of Commerce and
Trade if necessary.
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Chapter 6: Data Sources and Assessment Methodologies

6.1. Data Sources

6.1.1. Data and reference sources

- The Strategic Environmental Report of Location Plan for Nuclear Power Development
in Vietnam.

- The Pilot Strategic Environmental Assessment of the Hydropower sector in the

Context of the Power Development Plan VI, implemented by the Stockholm
Environment Institute, with support from the GMS Core Environment Program, funded
by the Asian Development Bank (ADB).

- The Strategic Environmental Assessment of the Quang Nam Province Hydropower

Plan for the Vu Gia-Thu Bon River Basin, prepared by the International Centre for
Environmental Management (ICEM) for the ADB, MoNRE and EVN.

- The Mekong River Commission Strategic Environmental Assessment of Hydropower

on the Mekong Mainstream, by the Mekong River Commission Office, prepared by
ICEM in 2010.

- The Strategic Environmental Assessment for Vietnam Forestry Master Plan 2010-
2020, a project by the Forestry Bureau, MARD, funded by the World Bank, prepared by
IECM Vietnam in collaboration with Integra Consulting Services (Czech).

- The Strategic Environmental Assessment of Power Development Plan VI, by JICA

in 2007.

- The Strategic Environmental Assessment of Vietnam Energy Development Plan, by

JICA in 2008.

- The Vietnam National Target Program to Respond to Climate Change, in accordance

with Decision No. 158/2008/QD-TTg dated 02/12/2008, and the National Action Plan
of Vietnam for Climate Change.

- Specialized report on “Socio-economic Situation in the Present and Future with Long-
term Prospects to 2020 and Further to 2030 and 2050”, prepared by experts from the
Institute of Strategy and Policy, Ministry of Planning and Investment, 2009-2010.

- Specialized report on “Industrial Park Development in Vietnam to 2020” (reference

document, unofficial).

- Specialized report on “The State of Nature Reserves, National Parks, and Wetlands
and Recommendations for the Future”.

- The National Action Plan for Environmental Protection for the period 2010-2020.

- The National Environmental Protection Strategy to 2020.

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- The State of the Environment Report in 2005, 2006, 2007 and 2008.

- The Report on Environmental Baseline Data by MoIT and EVN in 2007 and
2008.

- The National Strategy for Energy Development to 2020 with 2050 vision, as approved
by the Prime Minister’s Decision No. 1855/QD-TTg dated 27/12/2007.

- The Strategy and Plan for the Development of New and Renewable Energies for the
period 2011-2020.

- Water management plan for river basins

- Statistics on forest land area in Vietnam in 2007, 2008 and 2009 provided by the
Forestry Bureau, MARD.

- Development Plan for the Coal Sector in Vietnam to 2015 with Perspective to
2025.

- Master Plan for the Development of the Oil & Gas Sector in Vietnam to 2015, with
Perspective to 202.

And many other foreign data sources.

6.1.2. Data Created by the Institute of Energy

The National Plan for Power Development in the period 2011-2020 with Perspective to
2030, prepared by the Institute of Energy in 12/2010.

The Strategy and Master Plan for Renewable Energy Development in Vietnam (Master
Plan for Renewable Energy Development I), prepared by the Institute of Energy in
2010.

The National Power Development Plan for the period 2005-2015 with vision to 2025,
prepared by the Institute of Energy in 2006.

6.1.3. Assessment of the Level of Detail, Reliability and Currency of the Data
Sources.

All the materials and data on socio-economic situation, the environment, hydrology,
oceanology, and biological resources are reliable as they were provided by recognized
agencies and organizations. Some of the data came from the ADB data bank.

However, gaps are seen in data from the project level on displaced people, affected land
area, compensation cost in resettlement, health care cost, cost of work loss due to
illness, and cost of environmental impact caused by power generation and transmission.
Information about these costs was taken from previous projects, which was based on
lower cost calculations, or from research results provided by international experts,
which might have come from different cost calculations. The calculations of these costs
in this SEA are for references rather than application in the future projects.

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Some power projects planned for the period after 2020 have not yet had identified
locations. Therefore, it is not possible to have detailed calculations or forecast of the
potential impacts.

The results of assessment on the affected people based on population map using GIS are
only indicative.

Because information about power transmission routing is only on proposal, the cost
calculations and assessment of impacts of power transmission development presented
in this SEA are subject to changes.

Any missing information in this SEA will be added in the implementation phase.

6.2. Methodologies

6.2.1. List of Methodologies

The methodology adopted for this SEA aims at linking the SEA process with
development plans of the electricity sector as well as of other economic sectors, and the
development process of the whole country. The SEA was prepared in the context that
there were scarce financial and human resources, as well as limited time. Information on
key issues was either not in place or only partial available. This necessitated a method
and process which relied heavily on the judgments and opinions of the government
officers and other national experts involved.

- Statistic collection and comparison method: this method was used in collecting and
processing statistics on hydrology, oceanology, socio-economic development, the state
of the environment, and calculations of environmental costs and benefits for the various
scenarios.

- Trend analysis method: this method was used as the primary analytical tool. Trend
analysis is the most important component of every strategic assessment. Considering
the requirements for SEAs in Vietnam, this analysis can be seen as an analysis that
reflects changes over time in key socio-economic and environmental issues.

Trend analysis in this SEA focused on key issues that were identified and selected by
stakeholders from the government and the private sector. It allows the identification of
the main trends and models within the scope of the research in the last 10 years and a
view of the future in 20 years. These trends are mainly described through details of the
main qualitative trends, their motivations as well as geographical coverage, and the
main concerns in the development of electricity sector.

- Expert consultation method: Experts were consulted in the areas of hydropower,

thermal power, nuclear power, new and renewable energy, power grid expansion,
environmental planning, environmental management and the management of other
fields. International experts were consulted for strategic environmental analyses,
assessment and comments.

- The followings are cost calculation methods used in the SEA of PDP VII, including
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cost calculation of losses and social impacts.

Cost calculation of losses and social impacts:

Indicator Method
Investment cost for power According to the current rate of investment for power
production and supply plant
Loss of biodiversity value: river Use of GIS to define the scope and use coefficients in
ecology, forest ecology. “Changes in Nature’s Balance sheet: Model-based
Estimates of Future World Wide Ecosystem
Services” and “The Economic of Ecosystem and
Biodiversity”, provided by Prof. John Soussan.

Calculation of loss of environmental services.

Atmospheric pollution, Use of GIS to define the scope and use coefficients in
greenhouse gases “Changes in Nature’s Balance sheet: Model-based
Estimates of Future World Wide Ecosystem
Services”.

Information on the costs of health care services,

reduced longevity, time and income loss due to
illnesses, loss of crops.
Cost of climate change Reference information from Development and
Climate Change Report of the World Bank.

Cost calculation and identification of scope of influence for social and environmental
indicators

Indicator Method
Cost of social impacts Use of current rates for compensation and
resettlement.
Number of displaced Use of GIS and survey for power projects that have
households completed project investment report.
For hydropower and nuclear power - use existing
data combined with the number of household
displaced by PDP VII.

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Cost of affected land Use of GIS to define the scope and use coefficients in
- Loss of income due to “Changes in Nature’s Balance sheet: Model-based
agricultural land is affected. Estimates of Future World wide Ecosystem
- Forest. Services”, provided by Prof. John Soussan.
Use of standard rates for cost and land compensation
for projects based on reports of compensation for
displaced people.
For hydropower projects, use existing calculations in
the Pilot SEA for the Hydropower Sector in the
Context of PDP VI.
Reference information from Benefit Sharing
Mechanisms for People Adversely Affected by Power
Generation Projects in Viet Nam, ADB.
- Further reference information from the Sustainable
Development Report by the WB and Planning for
Existing and Proposed Nature Reserves in Vietnam
Project.
Cost of loss or additional cost Use the same analytical method in the Pilot SEA for
due to changes of water use Hydropower Sector in the Context of PDP VI and
purposes. reference information from “Changes in Nature’s
Balance Sheet: Model-based Estimates of Future
World Wide Ecosystem Services” for other areas.
Calculate the cost of impacts on the
ecosystem.
Calculate the costs of health care services, reduced
longevity, time and income loss due to illnesses, and
loss of crops.
Food insecurity. Reference information from “Changes in Nature’s
Balance Sheet: Model-based Estimates of Future
World Wide Ecosystem Services” for other areas.
Reference information from other relevant materials.
Loss of income due to loss of Reference information from the World Development
access to resources. Report: Development and Climate Change, 2010,
World Bank, and other relevant materials.
Increased poverty rate. Use analytical method in the Pilot SEA for
Hydropower Sector in the Context of PDP VI and
reference information from “Changes in Nature’s
Balance Sheet: Model-based Estimates of Future
World Wide Ecosystem Services” for other areas.
Increased/decreased income Use analytical method in the Pilot SEA for
Reference information from the World Development
from agriculture and/or Hydropower Sector in the Context of PDP VI and
Report: Development and Climate Change, 2010,
manufacturing. reference information from the World Development
World Bank, and other relevant materials.
Report: Development and Climate Change, 2010,

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Value of aqua resources Use analytical method in the Pilot SEA for
(upstream and downstream). Hydropower Sector in the Context of PDP VI and
reference information from “Changes in Nature’s
Balance Sheet: Model-based Estimates of Future
World Wide Ecosystem Services” for other areas.
Community health issues due to Look for new
Calculate the relevant
costs ofmaterials.
health care services, reduced
increased atmospheric pollution. longevity, and time and income loss due to illnesses.

- The use of GIS as an analytical tool: by overlapping maps that show geographical
scale of main socio-economic and environmental issues;

- Risk assessment: by analyzing changes in the development trends of environmental

elements and characteristics of projects.

- Maps and graphs in this SEA were built using available data to illustrate the
development of the main issues over time when possible.

- The SEA is based on assessment and analyses of socio-economic and environmental

impacts of power projects in the areas where the sub-component projects are
implemented or planned for.

6.3. Level of Detail and Reliability of the Assessment in SEA

6.3.1. Level of Detail and Reliability of the Assessment in SEA

The assessment methods adopted in this SEA are popular methods in the world and in
Vietnam. Different methods were used for different assessments and sometimes several
methods that complement each other were used for one assessment. The method of
statistic collection and comparison gives quantitative results that are highly accurate and
reliable. The use of matrices is helpful for listing all the impacts of projects included in
the power development plan and for determining the level of impact for project priority
ranking, etc.

All the methods listed above have helped the experts to produce reliable assessments,
which determine the high quality of the report.

The execution of the SEA in this study demonstrates the potential of the SEA as a key
part of the strategic planning framework for the power sector. The SEA has provided a
mechanism to assess and understand the full range of potential risks associated with
power development for people and the environment, both within the immediate vicinity
of project construction and beyond. It also provides a mechanism for identifying and
assessing the most effective mitigation and compensation actions, including actions to
reduce risks and to fully compensate for negative impacts where they do occur.

The SEA identifies costs related to human health and other social and environmental
costs and introduces mitigation measures and a mechanism to internalize these costs
into the cost calculations of power projects. This approach balances economic
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development, social equity and environmental sustainability for the development of the
power sector, which has never been done before.

The SEA proposes a few alternative scenarios to reduce the number of thermal power
plants in the future. It also recommends cancellation of several hydropower projects that
potentially have big impacts, and re-routing of some 500 kV and 200 kV lines, which
might have big impacts.

The SEA provides a framework for establishing a consensus among stakeholders on the
most appropriate forms of social and environmental mitigation measures and the level
of development of the overall power sector that is most efficient and sustainable. It
provides a means for ensuring objectivity and balance in the decision-making system.

When approached in this way, the full potential of SEA as part of strategic planning can
be realised. This differentiates SEA from more traditional EIA and safeguard
approaches to social and environmental issues, approaches that have often proved to be
ineffective in catalyzing more sustainable patterns of development. The introduction to
SEA, as previously presented, emphasised that an SEA should be decision-oriented,
balanced and evidence-based. The SEA presented in this report demonstrated that these
three principles can be followed in relation to the development of the national plan for
power development.

The effectiveness of the SEA as a mechanism for strategic planning in the power sector,
which is inherently complex and controversial, is demonstrated in this report.

6.3.2. Implications of Data Unreliability (Due to Objective and Subjective

Reasons).

The SEA requires a significant amount of original data. However, the time and
resources available means that it was only possible to use data from existing sources in
most cases. There is a need for a more adequate data collection, considering the current
state of institutional capacity. Conclusions in some areas could have been more reliable
if there were adequate data, such as data on compensation for displaced people, land
area lost to power projects, number of affected and displaced households/persons, level
of concentrations of air pollutants from thermal power projects and the zone of
influence of these pollutants, and health care statistics of affected people, etc.

In the future, the quality of analyses and assessments in SEAs can be improved by
having a better system for statistic collection and filing. This task can only be done
gradually and one part at a time. The analyses in this report guarantee reliable
conclusions, considering the available data. However, there is a need to institutionalize
all aspects of SEAs in the strategic planning systems.

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Conclusions and Recommendations

The analysis presented in this SEA shows the importance of an integrated and effective
plan for the managed expansion of the power generation sector in Viet Nam over the
coming decades. Demand will continue to grow as the economy develops and living
standards rise and not meeting this demand would have serious social and economic
consequences. The central goal of PDP VII is to meet future demand through the most
effective strategy for economic development, social progress, and sustainable protection
and preservation of the environment. Meeting this goal will require a balance between
the development of different types of power generation and the expansion of the power
transmission system with the main environmental issues and factors.

The requirement for PDP VII is to provide adequate power supply for economic
development for the period 2011-2030 in a way that is both cost-effective and
environmentally sustainable.

The conclusions presented in this part mainly focus on results of the assessment in the
previous chapters and the contribution of the SEA to the development of the power
plan. The recommendations aim at realizing the proposed mitigation measures.

I. Conclusions

1. Contribution of the SEA to the PDP VII

The execution of the SEA in this study demonstrates the potential of SEA as a key part
of the strategic planning framework for the hydropower sector. The SEA has provided a
mechanism to assess and understand the full range of potential risks associated with
hydropower for people and the environment, both within the immediate vicinity of
project construction and beyond. It also provides a mechanism for identifying and
assessing the most effective mitigation and compensation actions, including actions to
reduce risks and to fully compensate for negative impacts where they do occur.

The SEA has changed opinions about power development and the power development
plan towards a more optimal and sustainable manner. Changes that were made under the
influence of the SEA include:

+ Cancellation of unsustainable development plans at early stage (plans with more than
60% of coal-based power generation).

+ The optimal power development scenario that was chosen for PDP VII features
energy efficiency and conservation on the demand side and an increase in renewable
energy in power source development.

+ Attention was drawn to a few alternative scenarios, which are more favorable of the
environment but not feasible nor cost effective.

+ Attention to re-routing some transmission lines.

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+ The SEA recognized a few projects that have significant impacts and recommended
cancellation of these projects, including the Dak Mi 1, Dong Nai 5, and Srepok 4 for
their significant impacts on the ecosystem and biodiversity. The SEA also proposed re-
routing a few 500 kV and 200kV lines.

The effectiveness of the SEA as a mechanism for strategic planning in the power sector,
which is inherently complex and controversial, is demonstrated in this report.

The SEA also has identified costs associated with human health, environmental and
social impacts, and mitigation measures, and internalized these costs into the
assessment of the economic feasibility of power development schemes. This is an
approach that balances economic development, environmental sustainability, and social
equity that has never been done before in the implementation of an overall development
plan for the electricity sector.

The SEA acknowledges the progress that Vietnam has made in collecting payments for
environmental services from hydropower projects and internalizing a series of costs that
have been traditionally treated as externalities into the calculations of costs and benefits
for power projects, which are the costs of impacts such as environmental pollution,
gaseous emissions, damage to the integrity of the ecosystem in the expansion of the
transmission system. These costs need to be included in assessment of economic
feasibility and calculation of investment for power development projects.

The SEA has provided a mechanism to assess and understand the full range of potential
risks associated with power generation and transmission for people and environment,
both within the vicinity of project construction and beyond. It also provides a
mechanism for identifying and assessing the most effective mitigation and
compensation actions, including actions to reduce risks and to fully compensate for
negative impacts where they do occur.

Where an economic analysis is undertaken, the SEA also provides a basis for the
internalization of costs and benefits that have traditionally been treated as externalities.
This in turn provides a means for comparing the full range of risks and impacts that are
very different in character. For example, through the economic analysis one can
compare potential impacts on human health due to pollution, and on the culture and
livelihoods of local communities with risks to biodiversity resources and with impacts
on global atmospheric processes including greenhouse gas emissions. This in turn
provides a basis for objective decision-making on the most desirable, sustainable and
competitive levels of the types of power source development and the expansion of the
transmission system. When approach this way, the full potential of SEA as part of
strategic planning can be realized. This differentiates SEA from more traditional EIA
and safeguard approaches to social and environmental issues, approaches that have
often proved to be ineffective in catalyzing more sustainable patterns of development.

The SEA provides a framework for establishing a consensus amongst stakeholders on

the most appropriate forms of social and environmental mitigation measures and the
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level of overall development of the power sector that is most efficient and sustainable. It
provides a means for ensuring objectivity and balance in the decision-making system.

The SEA analyzes potential social and environmental impacts of the power sources
included in the base scenario of the PDP VII. The impacts of the expansion of the
transmission line system in the PDP VII are also analyzed and assessed. Conclusions
about the adverse impacts on the environment of the power development plan are
presented below.

2. Adverse Environmental Impacts of the PDP VII

The impacts of atmospheric pollution are resulted from the combustion of fossil fuels,
and especially of coal. The consequences of the four main pollutants (CO2, SO2, NOx
and PM) are the three main impacts: acidification, human health and climate change.

Under the plan in PDP VII, CO2 and PM releases will increase more than ten-fold
during the PDP VII period up to 2030. The impacts of these atmospheric pollutants will
be severe and widespread. Acidification, affecting both soil and water quality, is
spreading and increasingly affecting the Mekong River Basin. The number of people
exposing to air pollutants at different levels is increasing and contributing to the rises in
the incidence of health problems such as respiratory disease and other diseases. The
impacts on human health from atmospheric pollutants associated with thermal power
plants are particularly severe in large cities where there are many economic activities
and where the existing ambient air quality is poor. These impacts have been assessed
and valued at about US$9.7 billion per annum by 2030 unless actions are taken to
reduce the levels of atmospheric pollutant releases from, in particular, coal-fired power
generation.

There are 10 million people in Vietnam living in the mountainous, coastline and delta
areas, who are vulnerable to negative impacts of climate change. Millions of people will
be affected at different and increasing levels by abnormal weather phenomena and the
risks of climate change.
Damage to the integrity of ecosystems: Fragmentation of ecosystems and forest land
area, especially in protected areas and areas of high biodiversity significance, has been
recorded in 10 key biodiversity areas of international significance.

Resettlement and impacts on the culture and livelihood of affected communities,

including communities that are not displaced: All total of 61,571 people would be
displaced (more than 90% of whom are ethnic minority people) if the 21 hydropower
schemes under consideration are constructed.

The total area that will be submerged in the 21 schemes is 25,133 ha.

Changes to hydrological regimes, multi-purpose water resources management and the

issue of downstream salt intrusion: Water resources will for sure be affected by
hydropower development. Many stakeholders were concerned that the impacts of

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hydropower development on water resources were not full taken into account in the
planning and management of reservoirs. The present management regimes are in
general single purpose: to maximize power generation, which can cause big losses, as
discussed in the previous chapters. In every case, it is necessary to take into account
common interests such as flood control, water supply for agricultural activities, and the
need to ensure minimum environmental flows if serious downstream impacts on
ecosystems are to be avoided. The analysis also demonstrated the potential benefits in
terms of flood protection and improvements to dry season water availability that could be
accrued if more effective multipurpose management regimes are adopted.

Natural resources efficiency and conservation: from the energy import forecasts and
issues in power source development, there is an urgent need for a plan of actions for
energy use, conservation and efficiency to ensure national energy security in the coming
time.

Nuclear power development in Vietnam: Nuclear power is a source of power generation

that is characterized by risks that are low probability but extremely high in impact if they
do occur: reflecting the extreme hazards associated with the use and management of
radiological materials. It is essential that Viet Nam develops the capabilities and
management systems to handle radiological materials before nuclear power
development starts. There are additional predicable impacts that are a cause for concern,
especially associated with the use and release of the very high levels of cooling waters
that nuclear power stations require. The site selection of the power station is the key
issue here: any locations in the proximity of sensitive or high value ecological areas
must be avoided and the possible impacts of cooling water on riverine and marine
ecosystems must be carefully assessed.

Renewable energy is the source of clean power production that contributes to the
reduction of environmental impacts caused by power generation from coal. Power
generation from renewable energy has low impacts and is more socially and
environmentally benign than other forms of power generation.

Impacts of the transmission line development are mostly associated with the clearance of
land along the routes of transmission lines. The transmission line expansion plan in
PDP VII will clear more than 14,000 ha of forest, including 7,739 ha of rich and
medium forest. The resource value of the forests cleared would be around US$218
million. The line routes will pass through a total of 59 protected areas and 39 key
biodiversity areas, with 3,387 ha cleared in protected areas and 2,297 ha in key
biodiversity areas. This has potentially negative impacts because of the fragmentation of
habitats, with several areas likely to be divided into several fragments that could
potentially compromise the integrity of high value biodiversity areas.

II. Recommendations

1. Recommendations on Project Approval

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The study in the SEA shows that the PDP VII is necessary to meet economic
development needs. During the implementation of the PDP VII, impacts on people and
the environment and other social impacts are inevitable. However, the PDP VII is an
effective national power plan for power generation development and transmission grid
expansion, which meets all environmental protection targets by ensuring a balance
between economic development and environmental sustainability. Thanks to the SEA,
all national environmental targets and main related environmental issues are recognized
in the PDP VII. Assessment and selection of development options are based on the
recognition of these targets and issues to reach community consensus, to ensure
protection and preservation of the environment, forest and riverine ecosystems, and
local livelihood, and to attend to social and cultural and health related issues. These are
the basic conditions that the Government and related agencies need to pay attention to
when appraising the PDP VII, with regards to environmental issues and mitigation
measures presented in Chapter 3 and 5 of this report.

2. Other Recommendations

Capacity development for undertaking SEAs: The use of SEA as an integral part of the
preparation of PDP VII has helped to improve the quality of strategic planning in the
power sector significantly. However, to improve the quality of SEAs in the future, it is
recommended that further capacity development takes place in planning agencies and
other relevant agencies. Specialized areas that need improvement include the capacity
to analyze environmental and social issues, as well as the economic and technical
aspects of power projects, and the skills to collect and process a significant amount of
data, especially data management skills (such as GIS).

As regards to internalization of external costs of power technologies in PDP planning

and modeling, the differences in externalities between different technologies suggest
that the optimization means a lot for the electricity-producing sector. Power generation
using renewable energy can compete with other forms of power generation. Integrating
external costs into the optimization runs will lead closer to a socially optimal power
generation mix.

It is recommended that the multi-reservoir operation procedures are finalized soon for
the 11 river basins.

It is further recommended that additional efforts are made to ensure the necessary data
are available for undertaking SEAs. In this SEA, there were a number of data limitations,
most notably on aspects of the calculation and valuation of the impacts of the different
supply option proposals, data availability on health impacts and costs, compensation and
resettlement costs of each power project, the implications of climate change for the
sector’s development and the verifiable potential of renewable energy development
options. Steps need to be taken to systematically assess and address these data gaps so
that future SEAs can provide more rigorous analyses.

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A financial mechanism for undertaking SEAs needs to be issued soon. The
undertaking of a SEA is a long process that requires significant human resources from
many areas, a large amount of data, and an information exchange mechanism for
relevant parties to share their concerns in regards to the plans/strategies under
development. Therefore, it requires a relatively big budget. The execution of this SEA
was faced with many challenges, as there has not been a basis for budget planning and
appraisal.

The current SEA Guidelines, as reflected in Circular No. 05/2008/TT-BTNMT dated

08 December 2008, provide a strong national framework for the execution of SEAs, but
it has been found that the structure of the SEA report is not the most convenient or
effective one for producing an efficient SEA report. It is recommended that this
required report structure should be reviewed, drawing on international experience and
good practices in the SEA preparation.

Hanoi, May 2011

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APPENDICES

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APPENDIX 1

LEGAL DOCUMENTS AND INFORMATION RELATED TO THE

PDP VII

Document No. 11693/BCT-NL dated 09/12/2008 regarding budget planning for

PDP VII

App. 1.1: Summary of investment capital for national power development by 2030

App. 1. 2: A list of thermal power plants in PDP VI

App. 1.3: A list of hydropower plants in PDP VI

App. 1.4: A list of thermal plants in PDP VII

App. 1.5: A list of hydropower plants in PDP VII

App. 1.6: A list of 20 nature reserves in 2008

App. 1.7: Nature reserve areas in Vietnam (National parks)

App. 1.8: A map of nature reserves in Vietnam

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APPENDIX 2

GIS RESULTS OF IMPACTS OF HYDROPOWER PLANTS IN PDP VII

App. 2.1: Total land area that will be submerged in reservoirs

App. 2.2: Timber value in Vietnam

App. 2.3: Estimated value of forest services in Vietnam

App. 2.4: Value of forest that will be lost to hydropower reservoirs in

PDP VII

App. 2.5: Number of displaced people in each project according to each scenario

App. 2.6: Increased agricultural value thanks to water regulation by hydropower

development projects

App. 2.7: Forest land area in the ZoIs

App. 2.8: Economic value of forest in the ZoIs

App. 2.9: Number of people within 1 km – Upstream and downstream

App. 2.10: Hydropower projects with potential biodiversity impacts

App. 2.11: Assessment of biodiversity value in nature reserves at high risk

App. 2.12: Inundation areas

App. 2.13: Affected area by hydropower projects by district and province

App. 2.14: Areas of high biodiversity significance

App. 2.15: Land area of affected nature reserves (ha)

App. 2.16: Inundation area of the Bac Me project

App. 2.17: Areas identified as at high risk of disruption to ecosystems

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APPENDIX 3

GIS CALCULATION RESULTS OF IMPACTS OF THERMAL POWER

PLANTS IN PDP VII

App. 3.1: Number of people affected by thermal power plants

App. 3.2: Population (2009) in affected areas

App. 2.3: Gaseous emissions of the scenarios

App. 2.4: Costs of environmental impacts of the scenarios

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APPENDIX 4

GIS CALCULATION RESULTS OF IMPACTS OF THE EXPANSION OF

THE TRANSMISSION SYSTEM OF PDP VII

App. 4.1: Area of nature reserves affected by transmission lines

App. 4.2: Fragmentation of nature reserves

App. 4.3: Area of high biodiversity significance affected by transmission

lines

App. 4.4: The scale and percentage of fragmented areas of high biodiversity
significance

App. 4.5: Area of different types of forest affected by

transmission lines

App. 4.6: Transmission routes passing through forest

App. 4.7: Transmission lines and areas of high biodiversity significance

App. 4.8: Transmission lines and fragmentation of natural habitats

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