The national program on Demand Side Management - DSM - brings many great benefits, in which a fundamental one is the cost to change, reduce or save 01 MW of power capacity during peak hours will be cheaper than that to provide an additional 01 MW of power capacity by building new power plants or mobilizing higher-priced power sources together with more grid infrastructure. Setting the goals and benefits of DSM Programs in the current context of Vietnam as well as looking beyond the next 30 years, it can be assessed that DSM Programs will be one of the sustainable solutions to contribute to  achieving the goals that Vietnam has committed at COP 26 as well as contribute to ensuring national energy security.

In the last months of 2021, in the Vietnamese and international mass media, the phrases "Electricity prices skyrocketed in the EU" or "The risk of disruption of the global energy supply chain due to fuel prices rising" and "Power shortage" have become hot topics that many organizations and individuals are interested in studying to determine the causes and solutions. Also at the end of 2021, a Climate Summit was held within the framework of the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26). At COP26, the head of the Government of Vietnam affirmed that Vietnam will develop and strongly implement measures for greenhouse gas emission reduction with own resources, along with the cooperation and support of the  international community to achieve net emissions of "zero" by 2050.

Over the past 10 years, in the global context primary energy sources (coal, oil, gas) have been increasingly depleted, which is in contrary to the growth trend of increasing energy consumption, electricity consumption and climate change. In order to ensure the security of electricity supply, energy security and sustainable development, in addition to paying attention to development on the supply side, it is also necessary to pay more attention to the demand side.

Vietnam has focused on researching and implementing modern technologies, combined with the development of renewable energy, improving energy efficiency, especially focusing on demand-side solutions – customers using electricity or, in technical terms, electrical loads; including the National Program on Demand Side Management - DSM.

In Vietnam, DSM programs have been researched since 1997 when the World Bank supported the Electricity of Vietnam (EVN, formerly as the Vietnam Electricity Corporations) to carry out the Project “Evaluating DSM potential in Vietnam” to determine the potential of DSM to support the power industry to find effective solutions to meet electricity demand with high growth trend in the future. That shows that DSM Programs are not a new concept in Vietnam but on the contrary are very familiar. In fact, the overall legal regulations refer to the implementation of the DSM Program as a solution that contributes to ensuring the security of power supply. This is reflected in Article 16 of the Electricity Law, Article 10 of Decree No. 137/2013/ND-CP dated October 21, 2013 of the Government detailing the implementation of a number of Articles of the Electricity Law and the Law on Amendment, Supplement of articles of the Electricity Law. More specifically, there were the Decision No. 2447/QD-BCN dated July 17, 2007 of the Minister of Industry (presently as the Ministry of Industry and Trade) approving the National Program on DSM period 2007-2015 and Decision No. 279/QD-TTg dated March 8, 2018 of the Prime Minister approving the National Program on DSM to 2030.

1. Overview and benefits of the DSM Program

- The DSM program is a collection of Technical - Technological - Economic - Social solutions to support customers and electricity facilities to produce, trade and use electricity efficiently and economically. The DSM program includes indirect and direct activities of electricity customers and that process is encouraged by the Power Providers (supply side) through policy mechanisms with the goal of re-distributing electricity demand during peak hours, off-peak hours and normal hours to contribute to leveling the load graph, increasing the power load factor of the power system and optimizing energy use efficiency.

Ways to implement the DSM Program

- DSM Programs will benefit all parties including electricity users, electricity suppliers and society as a whole. Specifically, for the power supply facilities, the benefits are increase of investment efficiency, power supply reliability and quality, optimization of supply-demand balance, reduction of investment pressure to upgrade new power sources and expand power grid and reduction of production and business costs. For electricity use customers, the benefits are reduction of electricity purchase costs, power supply service with higher quality, some incentive supports (depending on the specific DSM Programs), increase of electricity use efficiency, improvement of their production and business efficiency. For the whole society, the benefits are contributing to reduction of the pressure in increasing electricity prices, contributing to development of the sustainable power industry, energy sector and contributing to socio-economic stability and sustainable environmental development.

- The effectiveness of each DSM Program depends on: (i) the number of customers participating in the program; (ii) the specific field and size of the participating customers such as residential, commercial or industrial customers; (iii) benefits from each program and customer satisfaction; (iv) policy, incentive and support mechanism; (v) investment and implementation costs.

2. Results achieved in the past:

Since 2007, after the Ministry of Industry (the Ministry of Industry and Trade at present) issued Decision No. 2447/QD-BCN, DSM programs have been piloted and officially implemented, gradually influencing customers' perception in the efficient use of electricity. Electricity users have had initial awareness and gradually changed their electricity usage habits towards efficiency, switched from peak hours to off-peak hours or normal hours etc., that has the effect to reduce electricity consumption demand at peak hours. Among the implemented DSM programs, the most obvious effect is the Time-Based Electricity Rate Meter Program – (or Time Of Use – TOU), which has brought many positive impacts on the power system.

a- For improving the electricity load chart of the power system, reducing the difference in electricity load between peak and off-peak hours:

+ The number of TOU customers (in industrial, commercial and service) has increased from 60,852 customers in 2007 (accounting for 0.58% of total customers) to 264,493 customers in 2015 (accounting for 1.11% of total customers) and increased to 637,356 customers in 2020 (accounting for 2.2% of total customers). Respectively, electricity consumption of customers increased from 52.45% (2007) to 64.8% (2015) and to about 73.86% (2020). This shows that while the number of TOU customers is rather small, the electricity consumption of TOU customers accounts for a very large proportion, so changing the electricity consumption habits of TOU customers will play an important, decisive role in changing and improving the electrical load diagram of the power system.

+ The load factor of the national power system has been improved from 0.74 in 2007 to nearly 0.78 in 2020. The average load factor in the period 2007-2015 reached about 0.77, in the period 2015-2020 reached about 0.783. That means it significantly improved in comparison to the period 2000-2006 (when only 0.7 average).

+ The demand for electricity at off-peak and normal hours tends to be higher than the demand for electricity at peak hours. For example, in the period 2007-2015, the average electricity consumption ratio of TOU customers compared to the total commercial electricity output in the country at off-peak hours is 14.4%, at peak hours is 13%, during normal hours is 38.4%; the commercial electricity output of TOU customers during peak hours compared to the total commercial power output of TOU customers accounts only  for 19.5%, while at off-peak and normal hours it is 80.5 %. In addition, the capacity difference between the minimum and maximum loads of the national power system has also been significantly improved from 0.43 in the 2000-2006 period to 0.51 in the 2007-2015 period and 0.54 in the 2016-2020 period, which shows that customers tend to gradually switch to use electricity during normal hours and off-peak hours, reduce electricity consumption during peak hours for reducing electricity purchase costs while still ensuring the production/business plan.

+ During the time when the TOU program had not been implemented, the typical load graph of the national power system had only 2 peaks (ie. morning and afternoon). After applying the TOU pricing mechanism, in the power system's load graph there has been gradually a peak in the evening even though the TOU pricing mechanism only has 2 peak hours in the morning and afternoon. These are the positive reactions of customers to the TOU tariff when changing usage habits electricity from peak to off-peak or normal hours.

b- For the goal of reducing peak load of the national power system: in the 2007-2015 period, there were 02 programs with the effect of reducing peak load, namely TOU program and DSM awareness raising program. In which, DSM awareness program can quantify and evaluate relatively effectively the peak load reduction. As of 2015, through the implementation of the Promotion Program on the use of solar water heaters and the Promotion Program on the use of compact lamps, in case of accounting only the number of compact lamps, T8 skinny lamps and solar water heaters installed by EVN for electricity customers, it contributed to reducing about 550 MW of peak load capacity during peak hours of the power system, equivalent to 45% of the suggested target. Although these results have not yet reached the expectation, they are only incomplete measurement and quantitative results from the programs implemented by EVN and its affiliated units and available statistics. If the statistics of all compact light bulbs or solar water heater systems are directly invested and equipped by electricity users, the results will be better.

In addition to the positive results achieved in the 2007-2015 period, the National Program on DSM 2007-2015 still had difficulties and obstacles that should be further overcome and improved. In which, the most important problem was that the incentive and financial mechanisms have not been fully studied and promulgated in order to apply synchronously and directly to National DSM Programs, especially the mechanism to encourage electricity use customers to participate in DSM. The way of implementation also needed to be adjusted to suit the actual situation in Vietnam. It was necessary to have an effective evaluation and measure method for the results of each program. These were reasons and justifications for the necessity to develop the National Program on DSM for the period up to 2030 approved by the Prime Minister in Decision No. 279/QD-TTg dated 8/3/2018.

With a new approach and inheriting the positive results of the 2007-2015 period, the National Program on DSM for the period up to 2030 has set out specific goals, contents and solutions for implementation, specifically as follows:

- Detail target:

+ Strive to reduce the peak load capacity of the national power system by about 300 MW by 2020, 1,000 MW by 2025 and 2,000 MW by 2030.

+ Increase the national power system load factor from 1%÷2% in the whole period of 2018 - 2020 and 3%÷4% in the whole period from 2021 - 2030.

+ Continue to research and promote the implementation of DSM programs that have been effectively implemented in the period 2007 - 2015 such as the Time of Use (TOU) metering program, promoting and awareness raising programs.

+ Gradually expand the potential customers participating in the National Program on DSM with household customers; combine implementing DSM Programs with supporting and encouraging customers to invest in installing rooftop solar energy systems.

+ Coordinate and implement integration with other Programs on economical and efficient use of energy, smart grid development roadmap in Vietnam and development orientation of renewable energy sources to ensure best exploitation of renewable energy sources for maximizing the potential of DSM Programs and achieve maximum effectiveness.

+ Develop a specific and appropriate roadmap for the implementation of new DSM sub-programs in the National DSM Program, especially the Demand Response Programs (DR) with the goal that after 2020 they can be widely deployed with many participants from electricity users nationwide.

- The National Program on DSM identifies three main groups of contents to focus on for synchronous implementation, including:

+ Content group 1: Develop and fully complete the legal framework for the implementation of the National Program on DSM;

+ Content group 2: Promote programs and activities to raise awareness of society, electricity users and electricity units about the National Program on DSM;

+ Content group 3: Implement DSM Programs, in which Demand Response Programs are identified as the focus for implementation in the period up to 2030.

- It has been nearly 3 years since the Prime Minister issued Decision No. 279/QD-TTg, its contents have been directed by the Ministry of Industry and Trade for implementation by EVN and electricity units. Due to the impact of the Covid-19 pandemic in the period of 2020-2021, the demand for electricity had significantly decreased, leading to a low requirement for DSM Program implementation. However, for 2019 alone with the promotion of implementation of non-commercial DR programs with large electricity users, EVN has carried out 10 DR events with a total energy saving of about 6.3 million kWh, of which the event with the largest adjustable capacity reduction is 514 MW. This is a very positive and potential signal for the implementation of DR Programs in Vietnam, especially in times of hot weather and high load or times of imbalance between electricity supply and demand due to various different reasons.

3. Difficulties, problems and recommendations:

              The effectiveness and benefits of DSM Programs have been verified by countries around the world and by practice in Vietnam. Especially in the current context and the goals of sustainable development, ensurement of national energy security and Vietnam's most recent  commitment to achieve "zero" net emissions by 2050 at the COP26, it is necessary to strengthen and accelerate the implementation of the DSM Programs. In order to implement DSM program most effectively, it is necessary to frankly recognize and have solutions to overcome the following difficulties and problems:

   - Financial, incentive and electricity-tariff mechanisms need to be reviewed, developed and promulgated in a timely and complete manner to be synchronously applied for the National DSM Programs, especially mechanisms to encourage electricity customers to participate in DSM. This problem is also the reason why the DSM Programs in the period 2007-2015 have not yet achieved the set goals.

- The active participation of customers will determine the success of DSM Programs. To attract and convince customers, it is necessary to organize the development and implementation of integrated strategies and programs for communication, promotion and public awareness improvement about the DSM Program, including contents, benefits of the programs and implementation procedures to fundamentally change customers' perception on energy use in general and electricity use in particular.

- The effectiveness or benefits of the DSM Programs cannot be accurately quantified or measured because there are not enough statistics or no evaluation method for implementation, especially in the 2007-2015 period. Therefore, it is necessary to build and organize a statistical database, including the electric load factor, the maximum capacity of the power system under the management of customers and of the national power system, the load chart (for electricity system, electricity users, etc.), quantity and subjects of customers applying electricity tariff over time of each electrical load component; also to step up load research to serve as a basis for setting the reasonable goals, testing and evaluating the potential and performance of the National DSM Programs for the following years and periods.

- The interest and resources of the facilities, especially of the electricity trading units to implement the DSM Program are still low; The training, improving skills in consultancy and customer-contact skills about the contents and benefits of the DSM Program are still limited.

- Infrastructure and information technology need to be continuously invested and equipped for expanding and applying a variety of DSM Programs to different subjects of customers.

- It is necessary to continue to supplement support resources to develop and improve  mechanisms and policies for piloting or officially replicating nationwide for each DSM Program. Especially it should supply funding resources for drastic implementation of public awareness programs that have been successfully applied in the previous period.

The final message that the author wants to send to readers is that the supply side, ie. power source, grid infrastructure etc. has been significantly invested, but in the situation with too high pressure in investment (more than 10 billion USD/year according to the draft Power Development Plan 8) and many difficulties in the implementation process,  the power lack had occurred and it will likely lead to the risk of supply not-meeting the demand for electricity. Therefore, the great attention to the management of the demand side through DSM Programs  will be both a short-term and a long-term solution to contribute to ensuring the security of electricity supply, energy security and sustainable development.

Mr. Nguyen Quang Minh, ERAV

& Vietnam Energy Conservation and Energy Efficiency Association

References:

1) Decision No. 279/QD-TTg dated March 8, 2018 of the Prime Minister approving the National Program on DSM for the period to 2030.