：、、。2018,,40%。2020, 10%, 2030,。2020,17。25%。,,
The Red River Delta province of Nam Dinh is set to expand its industrial landscape with the establishment of two new industrial clusters: Thang Cuong and My Thuan.
Vietnam''s school education sector presents strong foreign investment potential, fueled by rising demand, supportive policies, and tax incentives. Decrees 124 and 125, effective November 20, 2024, enhance oversight and operational and investment considerations.
On November 26, 2024, Vietnam''s National Assembly passed the 2024 Law on Value-added Tax (VAT), scheduled to take effect from July 1, 2025.
Vietnam''s new Decree No. 147/2024 introduces stringent regulation for internet services, imposing stricter compliance on onshore and offshore providers and reshaping access, content moderation, and user data management.
In 2025, workers in Vietnam are set to benefit from extended public holiday periods compared to the 2024 schedule. Businesses must plan in advance.
Vietnam Briefing has developed into a premium source for insight on doing business in Vietnam. It publishes business news concerning foreign direct investment into Vietnam, including the most important tax, legal and accounting issues. The Vietnam Briefing Magazine was first published in 2009, and is contributed to by investment professionals based in Vietnam.
This article is part of our partnership with the Green Economy Forum & Exhibition 2022, organized by EuroCham Vietnam, supported by Dezan & Associates Vietnam.
Vietnam is one of the most efficient power markets in Southeast Asia, driven by low-cost resources such as hydro and coal. The country has achieved around 99 percent electrification with relatively low cost in comparison to neighboring countries.
With electricity demand projected to increase by eight percent annually until 2025, the government is moving forward to develop renewable energy sources to ensure energy security and addressing the growing power demand.
Energy sources are diverse in Vietnam, ranging from coal, oil, natural gas, hydropower, and renewable energy. The total installed capacity as of November 2018 was 47,750MW.
According to the 2018 Vietnam Electricity Annual Report, hydropower and coal-fired power led among power generation sources followed by gas and renewable energy.
With growing industrialization and economic modernization, energy demand is predicted to increase by over eight percent per annum during the 2021-2030 period.
The demand is expected to increase from 265-278 TWh in 2020 to 572-632 TWh in 2030.
To meet the growing demand, Vietnam needs 60,000MW of electricity by 2020, 96,500MW by 2025, and 129,500MW by 2030. To do so, the country needs to increase its installed capacity by 6,000MW – 7,000MW annually and spend close to US$148 billion by 2030.
As for the renewable energy sector, the funding required would be around US$23.7 billion by 2030. For energy efficiency, a further US$1.5 – US$3.6 billion would be required during the same period, according to a report by the United Nations Development Programme.
At present, hydropower holds the largest share amongst all renewable energy sources, followed by wind and biomass. Solar energy, biogas, and waste-to-energy technologies are picking up slowly while geothermal energy and tidal energy are at a very early stage.
The government aims to increase the electricity output produced from renewable sources from approximately 58 billion kWh in 2015 to 101 billion kWh by 2020, and 186 billion kWh by 2030.
In 2016, the government approved the revised National Power Development Master Plan ("PDP VII") for the 2011- 2020 Period, with a vision for 2030. The next PDP VIII is expected to be released sometime in 2020.
The PDP VII plan aims to increase the share of renewable energy to around seven percent by 2020 and above 10 percent by 2030 and reduce the use of imported coal-fired electricity to ensure energy security, climate change mitigation, environmental protection, and sustainable socio-economic development.
Major investors in Vietnam in the approval, construction, or completion stage include German ASEAN Power, B.Grimm Power Public Co Ltd, Trina Solar, Schletter Group, JA Solar, Sunseap International, Nippon Sheet Glass, Ecoprogetti, Tata Power, Shapoorji Pallonji Infrastructure Capital, Gulf Energy Development, InfraCo Asia Development, and ACWA Power.
Although there is no foreign ownership restriction in the industry, PPP projects in the form of build-operate-transfer (BOT) contracts are usually preferred due to government guarantees and incentives.
Although foreign and domestic investment is on the rise in the renewable energy sector, much more needs to be done to ease investor concerns.
In spite of the liberalization of the policies in the last few years, investors are facing numerous obstacles such as:
Feed-in-tariffs in Vietnam is one of the lowest in the world. State-owned Electricity Vietnam (EVN) purchases all power from renewable projects. Tariffs are currently set for biomass, wind, waste-to-energy, and solar projects.
Vietnam would require around US$10 billion annually between now and 2030 to keep pace with the growing demand. With such high capital requirements, the government has allowed 100 percent foreign ownership of Vietnamese companies in the energy sector. Foreign investors can choose among permitted investment forms; 100 percent foreign-invested company, joint venture or public-private partnership (PPP) in the form of a BOT contract.
With low feed-in-tariffs and high production costs, PPP is the most effective means of entering the market to minimize risks. PPP term is 20 years from the commercial operation date.
Renewable energy projects benefit from import duty exemption for imported goods to establish fixed assets, materials, and semi-finished products. Tax incentives include preferential corporate income tax (CIT) rate of 10 percent for 15 years; CIT exemption for four years and a reduction of 50 percent for the following nine years.
In addition, other incentives include preferential credit loans, land use tax exemption, and land rental exemption.
To ensure consistent returns for investors, the government has also approved electricity prices (avoided-cost tariffs, Feed-in Tariff) for on-grid renewable energy, including standardized power purchase contracts (20 years) for each renewable power type. EVN, the sole buyer of electricity in Vietnam has also been mandated to prioritize renewable energy in grid connection, dispatch, and purchasing electricity at approved tariffs.
Vietnam has immense potential for wind and solar-based projects and is sufficient enough to address the growing power demands. However, low feed-in-tariffs (FiTs) have deterred foreign investors due to large investment costs. The government needs to gradually increase FiTs or at least adopt a price plan so that investors would be aware of the expected price hikes in the future. In addition, if Vietnam can introduce a bankable PPA, it could lead to an increase in international financing, which would help the country to meets its renewable energy goals.
Apart from FiTs, negotiating standard PPAs with EVN, the sole buyer of power is time-consuming, which leads to an increase in the total project costs. PPA negotiations have to be more efficient to reduce overall costs to investors due to delays. Relevant government authorities should also reduce the timeline regarding the formulation of guidelines and regulatory approvals, which in some cases has been years. Lack of clarity and delays in approvals often leads to execution delays or complete abandonment of projects.
Additionally, quality and sourcing of data for renewable energy sub-sectors have to improve to ensure clarity for investors about available locations, infrastructure capabilities, and government''s targets.
As the renewable energy sector picks up the pace in the coming decade, the government also needs to focus on developing the human resource capability. In the last few years, EVN has been conducting various training programs for technical experts, mostly for power plants and similar training should be introduced for the renewable energy sub-sectors as well, in order to meet up with new requirements.
Last but not least, supporting industries play a crucial role in the development and quicker adoption of renewable energy technologies. The government should promote domestic SMEs through capital subsidies and incentives such as tax breaks and preferential loans. A competitive supporting industry will help in reducing investment costs for renewable projects.
Note: This article was first published in March 2019, and has been updated to include the latest developments.
Our free webinars are packed full of useful information for doing business in Vietnam.
About Vietnam renewable electricity
As the photovoltaic (PV) industry continues to evolve, advancements in Vietnam renewable electricity have become critical to optimizing the utilization of renewable energy sources. From innovative battery technologies to intelligent energy management systems, these solutions are transforming the way we store and distribute solar-generated electricity.
When you're looking for the latest and most efficient Vietnam renewable electricity for your PV project, our website offers a comprehensive selection of cutting-edge products designed to meet your specific requirements. Whether you're a renewable energy developer, utility company, or commercial enterprise looking to reduce your carbon footprint, we have the solutions to help you harness the full potential of solar energy.
By interacting with our online customer service, you'll gain a deep understanding of the various Vietnam renewable electricity featured in our extensive catalog, such as high-efficiency storage batteries and intelligent energy management systems, and how they work together to provide a stable and reliable power supply for your PV projects.
Related Contents
