Vietnam needs to unlock its renewable-energy development as quickly as possible to reach the government''s commitment to net zero by 2050 and the bold PDP8 goals, which aim for wind, solar, and other renewable sources (excluding hydropower) to cover at least 32 percent of the country''s energy needs by 2030. 6 "Decision no. 896/QD-TTg on
This paper investigates Vietnam''s recent solar and wind energy development and seeks to answer two questions: 1) How did Vietnam manage to accelerate its solar and wind power adoption? 2) What policy insights emerge for the other ASEAN member states?
Solar power is an increasingly attractive electricity generating option for Vietnam thanks to recent cost reductions, fast construction, and the contribution solar power can make to ensuring energy security and environmental sustainability. To meet the countrys target of having 12 GW of solar power capacity
Vietnam utilizes four main sources of renewable energy: hydroelectricity, wind power, solar power and biomass. [1] At the end of 2018, hydropower was the largest source of renewable energy, contributing about 40% to the total national electricity capacity. [2] In 2020, wind and solar had a combined share of 10% of the country''s electrical
：、、。2018,,40%。2020, 10%, 2030,。2020,17。25%。,,
Vietnam''s power sector has been expanding alongside its economy—at USD223.9 billion in 2017—one of the 20 fastest growingin the world with year-over-year growth rates ranging from above 5 percent per year to 7.1 percent from 2013 through year-end 2018.
Solar and other renewable energy resources figure to play a growing role in the country''s energy mix, but transitioning to an economy and society centered on emissions-free, environmentally friendly energy resources appears more than likely to take a back-seat to ensuring economic growth continues, accompanied by an increasing reliance on coal- and natural gas-fired power generation.
State-owned utility Electricity of Vietnam (EVN) anticipates some USD123.8 billion will be invested in development of Vietnam''s national power system within the next 20 years, according to a February 2019 Vietnamese news report. According to the latest revision to Vietnam''s national Power Development Plan VII, an average USD6.8 billion per year will be invested in the sector over the period. Two-thirds of this is expected to be invested in power plants, with a remaining 33.4 percent invested in grid network development.
Solar power accounts for a negligible percentage of electricity generation in Vietnam, around 0.01 percent of national output, according to a September 2018 Vietnam solar powermarket briefing from international law firm Dezan Shira & Associates. A tremendous amount of untapped solar energy resource potential exists in Vietnam, however. Estimates have pegged the country''s solar power potential at 60–100 GWh per year for concentrated solar power and 0.8-1.2 GWh per year for solar photovoltaic (PV) energy.
In common with its ASEAN (Association of Southeast Asian Nations) peers, the Vietnamese government has relatively modest goals when it comes to raising renewable energy resources''share of national power generation. Collectively, the 10 nations that make up ASEAN are home to some 650 million people, 14.3 per cent and 8.5 per cent of Asia''s and the world''s population respectively. Yet ASEAN accounts for just 6.6 percent of Asia''s and 2.8 percent of renewable power capacityinstalled worldwide, Assaad Razzouk, group chairman and co-founder of Singapore-based clean energy company Sindicatum Sustainable Resources, writes in a March 18 op-ed. Furthermore, ASEAN''s share of installed global renewable power capacity peaked in 2012 and has dropped 24 percent since, Razzouk added.
Hydroelectric powergeneration has long been, and continues to be, Vietnam''s primary renewable energy resource, but most of the nation''s hydro-power resource potential has been exploited. Totaling 18 GW as of 2015, Vietnam''s hydroelectric generation capacity is expected to increase to about 21.6 GW in 2020 nonetheless.
Moving to realize those goals, the introduction of a solar feed-in tariff (FiT) in April 2017 has led to a large-scale solar power project pipeline of 20 GW. That''s about half the country''s installed power generation capacity, Rystad Energy highlights in a September 2018 RenewableCube newsletter. In addition, there are "thousands of small, off-grid solar power systems in operation, mainly in rural and remote areas" of Vietnam, Hogan Lovells, an international law firm, points out in its Renewable Energy in Vietnam 2018 report.
Commissioning large-scale solar power projects by a June 2019 deadline to qualify for government solar FiT incentives will be challenging, according to Rystad. "While it''s likely some projects will make this deadline, grid connection and commissioning for many likely won''t happen until after. Furthermore, there is little experience or technical expertise in Vietnam to deliver projects of this scale on such a short timeline," according to the independent energy consulting services and business intelligence data provider.
That said, China''s JA Solar on Feb. 21 announced it had supplied 48.3 MW of PERC (Passive Emitter Rear Cell) PV modulesfor the 48.3 MW BP Solar 1 power plant in a coastal area of southeast Ninh Thuan Province, which engineering, procurement and construction contractor (EPC) Bac Phuong Joint Stock Co. recently completed ahead of schedule. The grid-connected, utility-scale project, which was brought online on January 20, is the first to make use of higher efficiency, bifacial PERC panels and is expected to generate 80 million kilowatt-hours (kWh) of electrical energy while avoiding 79,760 tons of carbon dioxide emissions per year.
Connecting solar, wind or other renewable power generators to the national utility grid is another major obstacle for project developers, however.
Vietnam, for example, claims (and is commonly perceived) to be a leader in renewable energy, while in reality its leaders have been pushing coal. Its current power development plan does not indicate any transition away from fossil fuels and proudly projects that future electricity demand will be met by more polluting fossil fuel sources. For instance, coal will increase to 53 per cent of its energy mix in 2030, up from 33 per cent in 2016.
"To compound the mystery, Vietnam is inviting more investments in its solar sector with feed-in tariffs that are attractive on the surface. But the result is this increased capacity cannot be handled by the current transmission infrastructure and therefore is guaranteed to lose investors a lot of money."
As is the case in many countries around the world, whether developed, developing or lesser developed, Vietnam''s government-run utility and its ownership of fossil-fuel power plants, poses one of, if not the biggest barriers to fostering development and growth of solar, wind and other emissions-free renewable energy resources in the country.
There are 73 power plants—hydro, thermal, gas and renewables—up and running in Vietnam at present, according to VietnamNet''s February 2019 report. Forty-eight have a power generation capacity greater than 30MW. Nearly all were built, and are owned and operated, by EVN.
Looking ahead, there are plans to invest in building as many as 98 new power plantswith a total capacity of 59,444 megawatts (MW), according to the U.S. International Trade Administration (ITA). EVN plans to build 48 of them with a total power generation capacity of 33,245 MW at a projected cost of USD 39.6 billion.
EVN is able to self-finance or raise debt financing for just two-thirds of the investment capital required, VietnamNet points out. EVN and the Vietnamese government are looking to independent power producers (IPPs), including foreign investors, to provide the remaining third, possibly more.
Unfortunately for solar and clean energy proponents and supporters, much of this is likely to come in the form of coal-fired power plants. Fitch Solutions expects coal-power generation growth to increase rapidly in Vietnam over the next decade and dominate Vietnam''s power-sector expansion. "We forecast coal-powered generation to grow at an average of 10.1% y-o-y to reach about 50.5 percent of the power mix by 2028," Fitch projects. Coal-fired power generation accounts for around one-third of Vietnam''s power generation capacity at present.
The credit analysis and rating agency points out that there are downside risks associated with Vietnam increasing its use of coal as a power-generation resource, due in particular to mounting environmental concerns, as well as Vietnam commitment to meeting U.N. Sustainable Development goals and carbon intensity-based greenhouse gas (GHG) emissions reductions goals as a party to the U.N. Paris Climate Agreement, however.
Arguments that solar and wind power are unreliable or too expensive are difficult to justify as they are now cost-competitive with conventional, fossil-fuel generation—given a regulatory and institutional framework that makes for a level energy market playing field. And that''s not taking account of the rising toll climate warming and environmental pollution is taking on human and environmental health and quality, a growing concern across the ASEAN region.
The falling cost and fast-growing deployment of battery-based energy storage in leading countries around the world adds to the feasibility of transitioning to zero-carbon energy. All that makes government and utility allegiance to centralized fossil-fuel and nuclear power generation questionable and suspect.
In spite of, or perhaps because of this, multilateral development banks, foreign aid and development agencies, multinational solar and renewable energy industry players and investors have been and continue to express interest in helping develop and grow Vietnam''s solar and renewable energy capacity. The World Bank in June 2014 approved a USD200 million loan and USD70 million credit to support the Vietnamese government''s power sector reforms, as well as climate resistance and development programs that should help Vietnam achieve its lower carbon-intensity, U.N. Paris Climate Agreement targets.
In 2016, the World Bank, the Asian Development Bank, the Japan International Co-operation Agency and the German Bank for Reconstruction made preferential loans to EVN amounting to USD1 billion. In addition, EVN has been working with France''s international development agency in order to receive two additional loans for the Se San 4 floating solar power plantproject.
A lack of clearly defined, consistent market rules and regulations, as well as institutional capacity, hinders solar and renewable energy development and growth in Vietnam. That''s especially the case when it comes to residential solar energy uptake, EVN Director General Tran Dinh Nhan was quoted as saying at a conference in Hanoi February 27 organized to identify ways of boosting rooftop solar energy installations.
Just 1,800 Vietnamese households have installed rooftop solar powersystems (total power capacity of 30 MW) over the past two years, according to the Vietnamese news report.
The high, up-front cost of investment, along with cumbersome requirements regarding payments, devices and equipment, serve as barriers to greater adoption, Nhan reportedly said at the conference. Insufficient information, knowledge and confidence in the nature and quality of solar PV equipment and devices adds to Vietnamese households and businesses''reticence to install solar power systems, according to the report.
EVN Deputy General Director Dinh Quang Tri has proposed the government subsidize local household purchases of rooftop solar power systems and institute preferential policies for those who invest in solar power projects. Tri also proposed that Vietnam''s Ministry of Industry and Trade move quickly to amend its so-called Circular No.16 so as to enable EVN and its subsidiaries to sign official contracts and make payments for solar power produced by utility customers. Among other items, Circular 16 includes a set of three templates of model power purchase agreements (PPAs) for grid-connected projects, residential rooftop and commercial-industrial rooftop projects.
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