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Vietnam’s renewable energy industry: market opportunities

Vietnam’s renewable energy industry: market opportunities

Monday 24, 08 2020
With great potential for renewable energy resources, Vietnam can further promote the development of solar and wind power, meeting the increasing demand for electricity and serving the socio-economic development.

Huge benefits

According to forecasts by the Ministry of Industry and Trade, electricity demand for economic development from 2021 onwards will still increase at a high rate of 8-10% per year. Meanwhile, Vietnam’s primary sources of energy (oil, gas, coal) is going to exhaust, which leads to dependence on imported fuel coal, gas, and liquefied gas. In addition, the impact of climate change also results in droughts, which may cause a shortage of water in hydropower reservoir. On top of that, some thermal power projects under the Power Master Plan VII have been delayed, causing great pressure on electricity supply.
Huge benefits
In such context, the development of renewable energy sources, especially wind and solar power, is considered an inevitable trend. This is one of the important solutions contributing to the full exploitation of natural resources for electricity generation serving the country's socio-economic development. The development of renewable energy sources can both protect the environment, and take advantage of the wasteland where crops cannot be cultivated.
Recently, the Vietnamese Government has issued many policies and regulations to encourage the development of renewable energy resources. The Ministry of Industry and Trade also issued Decision 2023/QD-BCT dated July 5, 2019 approving the rooftop solar power development program in Vietnam for the period of 2019-2025. 
With the open mechanism, the active participation of the Ministry of Industry and Trade, localities, businesses, and the active support of the power sector, Vietnam’s renewable energy industry has made a great progress in the past few years.  The amount of energy generated from this source has reached over 5,500 MW. There are over 31,570 rooftop solar power projects with a total capacity of 657.88 MWp. Renewable energy contributes over 3 billion kWh per month, accounting for about 10% of capacity and 6% of national commercial output.

Drawbacks

According to many experts, although there have been several achievements, Vietnam’s renewable energy industry still faces difficulties. For example, transmission grid infrastructure has not kept up with the progress of renewable energy projects, leading to the fact that grid-connected wind and solar power projects in some localities such as Ninh Thuan, Binh Thuan could not release 100% of their capacity at certain times. Rooftop solar power, despite being very potential and easy to conduct, has not met expectations because initial investment costs are still quite high, and there has been no strong support from financial institutions.
The market for solar power products and services is quite diverse, however, there have been no specific technical standards for quality and safety. Recently, the construction industry has required more administrative procedures for the installation of solar power panels, causing difficulties for people and businesses who wants to invest.
Drawbacks
The potential and advantages of renewable energy in the Central and Southern regions are still very large, amounting to over 30,000 MW. Although it is not possible to replace major power sources (hydroelectricity and thermal power), if developed methodically and planned, renewable energy sources will partially satisfy the electricity demand in the region.
To achieve the set goals, it is necessary to create a favorable and transparent environment, to remove difficulties that arise in the implementation process; to perfect the legal framework, especially policies related to electricity purchase and sale prices, the socialization of transmission grids, project bidding for grid-connected projects, and to issue guidelines on evaluation criteria for technical standards for rooftop solar power product and equipment.

Source: congthuong.vn

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