In Vietnam, the energy demand is predicted to rise by over 10 per cent per year by the end of 2020 and approximately by 8 per cent per year in 2021-2030.
In the forthcoming decades, ASEAN countries are expected to rise to be one of the world growth centres. Energy is considered a fundamental element of economic activities, thus there is an increase in energy consumption. Vietnam being no exception, the country has adopted varied strategies to bring more renewable energies into its current energy mix.
Although COVID-19 severely affected economies of many major countries, Vietnam’s economy grew by 1.81 per cent in the first half of this year. Expectantly, Vietnam’s economy is said to bounce back up to 6.8 per cent in 2021.
Considerably, the energy demand in Vietnam will rise by over 10 per cent per year by the end of this year and by 8 per cent per year in 2021-2030. With an outlook to 2050, Vietnam has adopted the Renewable Energy Development Strategy till 2030. The Renewable Energy Development strategy aims to promote the use of renewable energy sources as well as environmentally friendly natural resources.
Consequently, there has been a surge in green energy projects from foreign investors. It was reported that Vietnam had 121 solar power projects with a capacity of 8,100 MW as recorded at the end of 2018, and the authorities were also dealing with 220 pending projects. The booming industry can give good opportunities for interested investors who have the right skills and capital to invest in the country. Energy investors will spend around $150 billion to meet rising power demand in the forthcoming decade.
The wind and solar power sectors will rise and hit 19.9 GW by 2030 in Vietnam as per reports. The country has prioritized developing renewable energy sources such as solar, and Vietnam is said to increase the percentage of renewable energy power gradually in the near future.
Vietnamese government is trying to tackle the climate emergency by using green energy, thus Vietnam is an ideal place for investing in the solar sector because the demand for electricity is presently high.
Vietnam has introduced policies such the flexible FITs system, emphasizing on solar projects “with solar-cell efficiency greater than 16 per cent or with solar-module efficiency greater than 15 per cent, a feed-in-tariff (FIT) will be affixed at 2,086 Vietnamese dong/kWh (equivalent to 9.35 US cents/kWh excluding VAT) for generating electricity at the said delivery point.” Soon, Vietnam may become the largest solar power installer in ASEAN just two years into introducing the FITS system. Additionally, Vietnam plans to change from a FIT policy to a more competitive bidding scheme for its solar projects to reduce the overall cost of solar generation.
Solar resources will shortly play a major role in the Vietnam’s energy mix and will help it achieve its environmentally friendly energy resources target. According to an article of Solar Magazine, the country aims to have a solar power capacity of 0.5 per cent of national output by 2020, a 3.3 per cent by 2030 and about 20 per cent by 2050.
Recently, there have been an increasing number of solar energy projects in the country. This is citied to the Vietnamese government adopting incentives for solar power investment projects such as reductions of land-use fees, land rent, and surface water.
In Ninh Thuan province of central Vietnam, Ninh Thuan Energy Joint Stock Company launched a large solar power plant project on 22 June 2020. The project recorded an investment of over 1,000 billion VND ($43 million) and currently expects to reach about 75 million kWh electricity output per year. This solar power plant is said to join the country’s national grid.
Moreover, rooftop solar PV will be connected to Vietnam’s national electricity network. Vietnam Electricity, the largest power company in the country, announced aid for households and businesses having rooftop solar power in terms of installation and technical support. This move aims to develop green projects as well as reduce intensive CO2 emissions in Vietnam. The country also received a new financial package of $212.5 million in order to support its green projects. The package will boost financing for projects that help reduce carbon emissions, thus aiding small and medium businesses. The support would benefit a scale up solar production in Vietnam.
The new development could brand the country as a solar-powered destination for entrepreneurs. Despite COVID-19, the solar energy industry is booming in the country. The solar energy sector is definitely a green and profitable sector to invest in.
We will be watching out how exactly Vietnam navigates its solar energy sector, in the coming months, given the significant attention its government has placed on it.