Investors eye Vietnam’s renewables in wind and solar energy

Home / Energy / Investors eye Vietnam’s renewables in wind and solar energy

Investors eye Vietnam’s renewables in wind and solar energy

Global investors are beginning to see growth potential in Vietnam’s renewable energy sector, particularly in wind and solar electricity, given the government’s reforms aimed to make Vietnam’s power sector more competitive and efficient.

At present, hydro power accounts for the largest share of power generation in Vietnam. However, since it is approaching maximum utilization, the government is seeking ways to diversify through coal and renewable energy.

Although Vietnam’s present level of feed-in tariffs remains a key barrier for renewables, the increasing domestic awareness of energy-efficient technologies, coupled with the growing global focus on sustainability, are key driving factors that promote its expansion.

According to Solidiance, an Asia-focused management consulting firm, Vietnam has an opportunity to become a leader in clean, renewable electricity. The strategy firm released a white paper forecasting the future of Vietnam’s power sector, stating that renewable energies will eventually become profitable in Vietnam despite the current low levels of feed-in tariffs.

Vietnam’s Feed-In Tariffs by Type of Renewable Energy

Screenshot at Aug 04 17-00-13

Source: Official documents of Vietnam Government, Solidiance analysis

In a master plan strategy to promote renewable energy, the government plans to increase wind energy capacity from the current 140 MW to 800 MW by 2020 and 6,000 MW by 2030, while a target has been set to increase existing or installed solar power capacity from the current 850 MW to 4,000 MW by 2020 and 12,000 MW by 2030.

Vietnam has also set a target to reduce greenhouse gas emissions by 8% by 2030 and has committed to increase this target to 25% with international support.

Along with these ambitious targets, a number of global companies are already investing on the lucrative market. Recently, the British Embassy of Hanoi announced a project to help businesses in southern provinces of Vietnam develop rooftop solar systems. The project, called Supporting Southern Vietnam Solar Photovoltaic Development, or Solar Hub, is supported by the UK Foreign and Commonwealth Office.

The initial phase of the project will last until March 2017, backed by Vietnam-based investment company Dragon Capital Group and Energy Conservation Center from Ho Chi Minh City. The project will receive financial support from the UK government as much as USD 1.7 billion.

Southeast Asian wind energy developer The Blue Circle has recently received an Investment Certificate from Vietnam for its 40 MW Dam Nai project in Ninh Thuan province, South Vietnam.

With less than 120 MW of wind power installed in the Vietnam so far, the Dam Nai project will significantly contribute to the ambitious target set by the government. The company intends to fully participate in wind power expansion in Vietnam.

As electricity prices are expected to continue to increase worldwide by 2023, Vietnam is set for more investment opportunities in renewable energy. Vietnam is in need of green growth, and the government will transition its policies to encourage these greener growth trends.

Recommended Posts

Leave a Comment

Start typing and press Enter to search