Cecilia Brennan, economic counsellor Australian Embassy in Vietnam

Like Vietnam, Australia’s whole-of-government approach includes building a more reliable, affordable, and low-emissions domestic energy system. Australia is pursuing a clean and equitable energy transition to a green economy, which is backed by government energy strategies and frameworks. Among these are the Future Fuels and Vehicles Strategy, National Hydrogen Strategy, and support for the development of an offshore wind industry.

Australia is committed to playing a constructive and substantive role in supporting Vietnam, and the broader region, to harness the opportunities of the energy transition. In March, the prime ministers elevated Australia-Vietnam bilateral relations to a comprehensive strategic partnership. This is Australia’s first partnership to feature a pillar dedicated to cooperation on energy, climate change, and environment, and provides a significant opportunity to scale up engagement in Vietnam.

A series of new initiatives, including the AUD90 million ($60.1 million) Australia-Vietnam Partnership for Economic Growth (Aus4Growth), will support sustainable economic development in Vietnam.

Aus4Growth, a priority for the Australian Embassy in Vietnam, will be guided by and contribute to Vietnam’s socioeconomic development strategy and other national priorities and strategies. The dedicated energy pillar of the programme will support Vietnam’s energy transition process, while balancing energy security and affordable energy prices with sustainability goals.

Responding to Vietnam’s priorities, Aus4Growth will support Vietnam to close gaps in policy and practice; strengthen the power network through the utilisation of digital and smart technologies; promote the use of energy efficiency technology; and ensure consideration of the social impacts of the transition.

In recent years, Australia has implemented many practical activities to enhance expertise and knowledge exchanges between energy agencies from both countries. These include peer-to-peer exchange between energy regulators and operators (i.e. Australian Energy Regulator and Electricity Regulatory Authority of Vietnam), as well as training courses and technical workshops delivered to parliamentarians, government officials, and engineers related to the energy transition, climate change, competitive electricity markets, and power system operation.

Australia is also deploying new blended finance mechanisms through impact investment funds to mobilise private sector investment for climate outcomes, including through the Australian Development Investments fund, Export Finance Australia, and other multilateral investment mechanisms.

Meanwhile, the Future of Electricity Vietnam programme is a science-to-policy initiative to forge closer links between our two countries in the energy sector. The initiative commenced in 2022 and is led by the Australian Embassy in Vietnam with the participation of the Vietnam’s Central Economic Committee and key energy agencies.

The initiative aims to leverage the Australian experience in the energy transition to support Vietnam in exploring practical and feasible interventions for a decarbonised, reliable, and affordable power system. This can be achieved by bringing Australian and Vietnamese experts together to share experiences and to develop knowledge products across the main dimensions of the power sector including generation, fuels, demand, grids, market, and planning.

As a result, eight collaborative research reports were presented to Vietnam’s energy agencies at the landmark State of the Energy Transition conference on September 18. The reports outline potential solutions for the sustainable transformation of Vietnam’s electricity sector related to deploying cost recovery mechanisms to help reduce electricity costs; the techno-economic feasibility of gas-to-hydrogen fuel switching; increasing distributed energy resources in reliable electricity grids; coordinating energy efficiency; building resilience for Vietnam’s power sector, and more besides.

Technical meetings, as well as a study mission to Australia in April-May, have also informed Australia’s joint work with Vietnam over the past two years.

Recognising the challenges and opportunities of the energy transition, Australia and Vietnam are cooperating to harness our complementary strengths and attributes to support the move towards a green economy. Australia, with strong financing tools and mechanisms, expertise, and research and development capability, is committed to supporting Vietnam to make the transition a reality.

At the same time, Vietnam has strong manufacturing and processing capabilities that can play an important role in future clean energy supply chains. Both countries have large reserves of the critical minerals which are fundamental to the development of renewable energy systems needed across the globe. Australian and Vietnamese businesses are exploring ways to deliver strong green economies for the future.