Installation of solar panels on a factory's rooftop in HCM City. (Photo: VNA) In a recent study by UK-based think tank Ember, Vietnam accounted for 69% ofall solar and wind power output in ASEAN in 2022, which was estimated at 50TWh.
Vu Chi Mai, director of Clean, Affordable and Secure Energy forSoutheast Asia (CASE), a programme that drives change in the Southeast Asianpower sector towards an increased ambition concerning climate changemitigation, said the Southeast Asian country's stable socio-politicalenvironment makes it among some of the most attractive investment destinationsfor solar and wind power business in the region.
In addition, the Vietnamese government has implemented numerous preferentialpolicies, aimed at supporting renewable energy, paving the way for thedevelopment of a substantial market and workforce.
Mai said the country has the potential to promote domestic market localisation,with the proportion increasing from 45% to nearly 80% for solar power and from37% to 55% for wind power by 2050. The value of localisation could reach 80billion USD, or 50% of the total market potential.
However, participation by Vietnamese businesses in the industry has beensomewhat lacklustre. Consequently, the market share, valued at billions ofdollars, remains predominantly in the hands of foreign enterprises.
According to experts from CASE, the current supply capabilities of domesticenterprises in the renewable energy sector are limited, with the onshore windsector in Vietnam lacking the production of nacelles (wind turbine housing),hubs, rotor blades, and underwater cables have not been produced. Statisticsshow that 90% of equipment for renewable energy projects is still imported.
Contributing factors included a lack of assessment capacity, andinfrastructure, in addition to insufficient technological capabilities andproduction levels that do not meet the requirements. Moreover, the industrialsupport policies for renewable energy are still inadequate.
Industry insiders and experts have long called for a faster rate oflocalisation and less dependence on foreign companies.
A case study that may be useful for Vietnam is China. When European windturbine manufacturers went to China, the country also required them to meet acertain level of localisation and transfer specific technologies.
As a result, China's renewable developed rapidly and rose to become the globalleader in the solar energy sector. Currently, China's GoldWind, a wind powergeneration company, holds the second-largest share of the global market. In avery short period, China achieved this because of its favourable policiesencouraging localisation. This serves as a lesson for Vietnam to "follow,but lead" by setting conditions for renewable energy technology leaders tohold the leading technology, Mai said.
In addition, to absorb technology from FDI regions, businesses need to continueevaluating the capabilities of companies in the wind and solar value chain,including support industry enterprises. Simultaneously, boosting research anddevelopment, technology transfer, experimental projects, and developing skilledmanpower is essential for maximum localisation.
Dinh Van Tuan, Deputy General Director of Ba Son Corporation, one of the firstdomestic companies to participate in manufacturing wind turbine towers,believes that Vietnamese businesses are taking advantage of opportunities toproduce final products for foreign renewable energy partners. However, thebiggest obstacle for enterprises is the policy mechanism and pricing. Withoutmastering technology, the cost of production will be high, leading to lowcompetitiveness.
"Vietnam is following, so it needs support from the government in terms ofmechanisms and policies to transfer technology, and invest in new, modernproduction lines. Only in this way can we reduce production cost, increasecompetitiveness for domestic businesses, and integrate deeper into the globalvalue chain," he said./.
VNA
