Renewable energy: the future of power for Vietnam
HCM City (VNS/VNA) – Vietnam could meet its long-term energy demands by adding
renewable energy sources and cutting-edge battery storage technologies to its
arsenal of solutions, experts said at a two-day international conference on
renewable energy that ended on April 4 in HCM City.
Speaking on the sidelines of the conference, Nguyen Tam Tien, CEO of Trung Nam
Group, said that renewable energy generation has already significantly
increased. “Renewable energy, especially solar and wind power, will be the
future of Vietnam's long-term energy strategy,” he said.
Mai Van Trung, business development director at SolarBK, said the
country has favourable conditions to develop solar energy and that
commercial and industrial solar PV rooftop applications have great development
potential.
Rooftop solar panels have also become more affordable for homeowners and
communities, he said.
Samresh Kumar, managing director of Principal Investment at VinaCapital, said
solar rooftop power presents an effective solution which provides a
commercially viable option, especially for the commercial and industrial
segments.
Solar power leverages existing infrastructure and monetises idle assets
without requiring additional land, and it is also efficient because power
is produced only where it is needed and thus frees up the grid, he noted.
John Rockhold, head of the Power and Energy Sub-working Group under the Vietnam
Business Forum, said rooftop solar panels must be encouraged to reduce pressure
on the national grid, while modest annual price increases and a road map for
efficiency energy are badly needed.
Huge investment
Vietnam has a great opportunity to reach its energy security goals by
attracting local and foreign investment, according to Rockhold.
New technologies are creating opportunity for the renewable energy sector, he
said, adding that such technologies could help lower the cost of equipment for
solar and wind energy.
Vietnam will require around 10 billion USD annually between now and 2030
to meet the growing demand of the energy sector, experts said.
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 such as 100
percent foreign-invested company, joint ventures or public-private partnership
(PPP).
FDI and domestic investment from the private sector could include investment in
batteries and other storage methods, which would help stabilise supply and
extend the availability of solar and wind power sources.
By storing renewable energy and keeping supply high, prices for solar and wind
power could be lowered.
With low feed-in-tariffs (FiT) and high production costs, PPPs are the most
effective means of entering the market to minimise risks. The PPP term is
usually 20 years from the commercial operation date.
Government efforts
With 66 percent of rural inhabitants, Vietnam is
scaling up its efforts to bring electricity to the entire population, whether
on or off-grid, increasing electrification rates and preparing the country for
growth.
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
neighbouring countries.
With electricity demand projected to increase by eight per cent annually until
2025, Vietnam aims to develop renewable energy sources to ensure energy
security and address growing power demand.
Hydropower currently holds the largest share among all renewable energy
sources, followed by biomass and wind. Solar energy, biogas, and
waste-to-energy technologies are picking up slowly while geothermal energy and
tidal energy are at a very early stage.
Renewables could become Vietnam’s lowest-cost option to meet its energy needs.
In recent years the Government has developed initiatives to boost renewable
energy, especially solar and wind power. Tax incentives include
preferential corporate income tax rate of 10 percent for 15 years, corporate
income tax exemption for four years, and a reduction of 50 percent for the
following nine years.
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 for on-grid renewable energy, including standardised power
purchase contracts (20 years) for each renewable power type.
EVN, the sole buyer of electricity in Vietnam, has also been mandated to
prioritise renewable energy in grid connection, dispatch, and purchasing
electricity at approved tariffs.
From now until 2030, Vietnam’s economy is forecast to grow at a high rate
of between 6.5 and 7.5 percent per year.
The conference was held during the two-day Solar Show Vietnam 2019,
Power & Electricity Show Vietnam, Energy Storage Show Vietnam, and Wind
Show Vietnam, which attracted hundreds of policymakers, regulators, investors
and financiers from Vietnam, Asia-Pacific region and beyond.
The trade shows were also attended by power producers, project developers,
renewable energy vendors, and business owners and land developers.-VNS/VNA