The Vietnam construction industry’s sustainable urban vision (Part 2)

In Vietnam’s humid southern regions, air conditioning is indispensable. Addressing the considerable energy demands of urban living, District Cooling—where centralised chilled water is distributed to a set zone—offers a sustainable, energy-efficient solution that significantly reduces carbon output.

Elsewhere, Schneider Electric is championing sustainability with the introduction of its new BVS UPS system in Vietnam. The technology decreases data centre footprint by 70%, while simultaneously enhancing flexibility and energy efficiency. Liquid cooling, especially suitable for AI-driven data centres, is also undergoing accelerated development and implementation.

Meanwhile, Aden Group is embracing full-spectrum digitalisation. “Our energy optimisation strategy comprises three phases,” explained Laurent Deflandre, Managing Director of Aden Group Vietnam. “We begin with data gathering via IoT, followed by real-time management using digital twins, and finally, we apply AI to accelerate responsiveness.” These tools are being designed not only for data centres but for use across a wide array of construction projects.

Could Vietnam transition from a consumer of technology to a creator—and ultimately, a leader—in its own right? In response to Tatler’s query, Mr Deflandre offered a confident outlook. Aden Group, which has been active in Vietnam for over 25 years, has already invested more than US$50 million in an innovation hub in Hanoi. Technologies such as the Akila platform are being developed by Vietnamese engineers and are currently deployed in France, Singapore and the United States. Partnerships with firms like FPT Software further underscore the country’s capacity for local innovation and global reach.

However, Mr David Pham—CTO of Business France Vietnam—has expressed concern that Vietnam’s investment in research and development (R&D) remains modest, at just 0.5% of GDP, in contrast to 2.5% in China and 5% in South Korea.

“Most patents registered in Vietnam originate from foreign companies, and intellectual property protections remain limited,” he observed. That said, he noted a promising development: Nvidia’s recent commitment to investing in AI R&D in Vietnam—an initiative yet to be mirrored even by France.

The rising influence of artificial intelligence is reshaping investment strategies and accelerating the expansion of data centres across Vietnam. Domestic tech leaders such as VNPT, Viettel, CMC, FPT and VNG are joined by global heavyweights including Amazon, Microsoft, Supermicro, ST Telemedia Global Data Centres, Google and Alibaba, all vying for a stake in this burgeoning market.

According to Research and Markets, the data centre sector in the Asia-Pacific region is projected to grow at a compound annual rate of over 10% from 2024 to 2029. Vietnam, notably, is expected to outpace this with a sustainable growth rate of approximately 13%, despite its modest internet speeds and relatively small market size—underscoring its potential as a promising frontier in the global data centre landscape.

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As digitalisation continues at speed, data centres face mounting pressure—not only to maintain robust, uninterrupted service but also to address their immense energy demands. Mr Dong Mai Lam remarked that these facilities—often considered the backbone of the digital economy—are rapidly becoming among the highest energy consumers today.

S&P Global reports that CO₂ emissions from the ASEAN power sector are set to peak at 805 million metric tonnes by 2029. Emissions are expected to stabilise through to 2040, with the region planning to phase out 20 gigawatts of coal-fired capacity and introduce 54 gigawatts of gas-powered alternatives. This transition aims to ensure stable power supplies while making space for renewable integration. For businesses, one of the most immediate paths to emissions reduction lies in greening their sustainable energy sources.

Diversification is essential. Mr Lam advocates for increased reliance on solar and wind energy. Mr François Magnier of IDEC Group Asia Vietnam echoes this, suggesting data centres be positioned close to renewable energy hubs, such as those in Ninh Thuan, where significant solar and wind projects are already in operation.

Another promising initiative is the Direct Power Purchase Agreement (DPPA), slated for release in 2024. This mechanism enables businesses to contract directly with renewable energy providers, bypassing full dependence on the national grid overseen by EVN. Currently, around 2–3 GW of renewable energy is available for bidding by 20 major international firms operating in Vietnam.

Also gaining attention is the use of “digital twin” technology. Mr Lam explained that this innovation allows data centres to model “what-if” scenarios, optimising performance and efficiency. When paired with AI, the technology enables predictive maintenance, risk mitigation and substantial energy savings—key steps toward achieving Net-Zero targets.

In a recent commentary, Associate Professor Dr Nguyen Trung Dan, now a Senior Researcher at the Corning Research and Development Center in New York, proposed a more unconventional approach: nuclear energy. He noted that small-scale nuclear power plants have already been adopted by several nations to ensure stable energy supplies for data centres without diverting resources from other industrial needs. “Constructing compact nuclear plants reduces building costs and allows for more precise risk management,” he explained.

Vietnam is navigating significant opportunities, but equally, it faces considerable challenges.

According to experts, timely government policies—both at the macro level and through public-private partnerships—are pivotal in advancing sustainable economic progress. These measures are essential not only for achieving effective emissions reduction but also for addressing the broader climate challenges facing the construction sector and beyond.

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