The Center for High-Tech Development under the Vietnam Academy of Science and Technology together with the Vietnam Lighting Association has prepared a National Roadmap for the development of the LED lighting industry up to 2025.a
LED technology meets the demand of energy saving
Energy Efficiency and Energy Conservation (EE&EC) is an important and essential requirement for the continued development of Vietnam, as it affects economic growth and equity, but also various other critical issues related to energy security, environment management and Climate Change. Moreover, it is much more economical to invest in EE&EC and thereby avoid investments in the supply side, as it requires only around 25 to 30% of the investment required for the electricity generation and transmission and distribution system. Vietnam still consumes electricity in an inefficient manner, and its power intensity (kWh per USD of GDP) is 1.6 to 6 times. Higher power consumption results in a more carbon intensive economy contributing to Global Climate Change, apart from various other environmental impacts. Lighting accounts for a significant portion of the electricity consumption. According to a report by Electricity of Vietnam (EVN) in 2012, Vietnam consumed 29.4 billion kWh for lighting, which was 25.3% of the total power consumption and equivalent to 12.64 million tons of CO2 equivalent. According to the national Power Development Plans up to 2020 and 2030, the total electricity demand for lighting will be 83.5 billion KWh in 2020 and 175.8 billion kWh in 2030. In addition, there is also a shift happening to a more carbon intensive and polluting power system. The hydropower dominated power system is gradually moving to a system dominated by coal-based thermal power. Currently, coal-based power accounts for 33.5% of the total installed capacity, which is expected to increase steeply to 49.3% by 2020 and 55% by 2030. Apart from its impact on Climate Change, this shift will have a negative impact on energy security, as well as on the environment. In recent years, Vietnam has moved from a net exporter of coal to a net importer of coal and this is expected to increase in the future. Coal-fired power stations also generate a lot of solid waste and air pollution. Hence, EE&EC, especially in lighting, is a national priority
At the consultation workshop to discuss the “Draft proposal on National Roadmap for the Development of LED lighting industry up to 2020” organized by the Center for High-Tech Development on June 14, 2017, the majority of the speakersappreciated the development of the Roadmap. According to Mr. Nguyen Doan Thang – Vice President of Vietnam Lighting Association, LED lighting technology has a lot of advantages compared to traditional lighting such as highly directional, easy integration with control systems and intelligent/smart applications, better light quality, and significant energy savings.
However, the Roadmap also has challenges, especially due to the high cost needed for producing LED products, as well as the need for Vietnam to adhere to international product quality standards so as to compete in international marketss. In addition, the analysis of the development trend of the LED industry in the world will help the domestic lighting businesses going in the right direction.
As a potential benchmark for Vietnam, China produces up to 70% of the global LED production, and exports account for nearly 50% of it. In China, the LED industry currently exists in 3 stages: Epi and chip production stage, whch generates 3.5 % of the total revenues; LED packaging, with around 14.5% of the revenues; and assembly of LED lighting products, generating about 82% of the revenues.
Vietnamese LED industry, Quo Vadis?
Producing good quality and affordable LED’s that can compete in the global market, requires high technology and Research and Development (R&D) and Manufacturing capacity. There are more than 200 LED manufacturers in Vietnam. Around 3 % of the LED manufacturers, are larger local companies that have many years of experience in producing lighting products and account for 10-20% of the LED market. Foreign-owned enterprises makes up about 13% of the total number and accounts for 15-20% of the total LED market, though the products from these companies are 2-3 times the average price. The remaining around 84 % are smaller enterprises accounting for 60-70% of the market share. Most of these smaller enterprises do not have much experience in the lighting industry and rely on assembling imported components, mainly using imported LED packaging equipments, with most of the imports being of low price and quality.Hence, there is a proliferation of poor quality LED products which is a major barrier for the development of the LED market in Vietnam.
For the sustainable development ofthe LED lighting market, Vietnam needs to incentivize good quality LED production and and support capacity building for such LED producers. While the state has a major role to play in this, enterprises also must proactively try to improve their productivity and competitiveness, by improving their R&D capabilities, and by applyingimproved and modern business, production and quality management systems. Vietnamese enterprises should focus on developing production lines on the assembly, in which theyseem to have the advantage. These enterprises could strive to move step by step from LED light source manufacturing company to lighting equipment company and finally towards a model lighting solution company.
Vietnamese enterprises have to explore specialized and emerging lighting applications such as those in agriculture, horticulture, animal husbandry and fisheries. The industry should also gradually imbible advances in LED production technology such as LED CSP (Chip Scale Package), Wicop (Wafer level Integrated chip on PCB), and AC/IC driver. The industry should also look at the competitive advantages of gradually getting more control over the entire business and production cycle, through more backward or forward integration.
The need for State support
State support is needed on many fronts, especially on further developing standards and guidance that deals with definitions, concepts, measurement methodologies, covering various aspects such as functional areas, performance, safety and environmental. These should also be compatible with that of ASEAN countries and be gradually harmonised with the standards of developed countries. Vietnam is currently lacking good quality testing laboratories, which is essential need for product certification by authorized agencies and for labeling and self-certification by manufacturers. The certification body also needs to be capable of carrying out its functions such as sampling products in the market, testing of samples for certification,and evaluating the capacity of enterprises’. The Government should be able to ensure compliance with the standards and should be able to weed out poor quality products from the market, while creating a transparent and supportive environment for good quality products.For the local LED industry to thrive in the long run, they also need to gradually access the large and lucrative export markets, especially in developed countries.
The Government of Vietnam has set up a policy and regulatory framework to support EE&EC, such as the “Law on Energy Efficiency and Conservation” promulgated by the National Assembly on June 17, 2010,or the Decree 21/2011/NĐ-CP detailing measures to enforce the Law. Specialized agencies, such as the Department of Energy at the central level, and Energy Conservation centres at the local level, have been established to promote and support energy savings, including in lighting.
Local authorities are also implementing many measures to encourage the use of LED lights, such as the People’s Committee of Hanoi’s Decree No. 47/KH-UBND dated March 01, 2013 on“Implementation program on usageof Energy saving and effective in the city of Hanoi in 2016″ through which Hanoi will replace all existing decorative lights with LED lights to improve saving and effective lighting energy. From 2012,Ho Chi Minh City has also implemented a pilot program for street lighting using LEDs and has handed it over to the Urban Traffic Management No.1.
Obviously, with so many initiatives from various actors, the development of the roadmap on LED lighting industry is urgent and necessary. However, according to Dr.Trinh Quoc Vu, Head of Science Technology and Energy Saving Division, Ministry of Industry and Trade, the priority tasks and roadmap for the development of LED industry up to 2025, more detailed market research will be needed to assess the potential for LED technology development. Which segment of the market should the Vietnam LED industry focus on?
Mr. Pham Viet Dung – Deputy Director of Science and Technology Application Department – Ministry of Science and Technology, and Mr. Nguyen Duc Chien – Vice President of Vietnam Lighting Association, stressedthe need to develop human resources needed for this industry.
With the global and national trend in favour of LED technology, it is clear that the local LED lighting industry in Vietnam needs strong support to develop products that can compete in the international market, both in terms of quality and price. To make this happen, the further development of the Roadmap is critical, and the continued support by the central and local government agencies to facilitate and implement the Roadmap.
TrầnTrung
