The Government of Vietnam has always been aware of the importance of setting goals for electricity development to ensure sociol-economic development and national energy security. Indeed, in recent years, the improvement and extention of Vietnam’s electricity system have been remarkable in terms of both quality and reliability.
Today, almost all of the country’s large hydroelectric potential has been exploited. At the same time, coal-fired power development is facing capital mobilisation difficulties. Electricity generated from LNG requires huge investments, its production costs are high and the country must depend heavily on foreign sources of LNG. In order to facilitate more sustainable economic growth, the government is looking for ways to increase of the share of renewable electricity in both energy production and consumption. Also, in order to reduce the dependancy on fossil fuels, maintain national energy security and contribute to global climate change mitigation, the Government promulgated its Decision no 2068/QĐ-TTg dated 25 November 2015 on approval of the National Strategy of Renewable Energy Development by 2030 and vision to 2050. This Strategy included targets to raise the share of electricity generation from renewable forms of energy to 35% of total national electricity production by 2015, 38% by 2020 and 43% by 2050. In recent years, the Government has issued many successful policies whichencourage the development of wind, biomass, waste-to-energy and solar power development.
By 2020, Vietnam’s total installed capacity of renewable energy (excluding hydroelectricity) was 17,430 MW (an increase of 11,780 MW in 2019), equivalent to 25.3% of the total installed capacity of 69,000 MW. By 2020, there were 148 solar farm power projects with a total installed capacity of 8,550 MW, and 104,526 rooftop solar systems in operation with a total installed capacity of 7,711 MW. As for wind power, there were 11 wind power projects with a total installed capacity of 538 MW, and by October 2021 the total capacity of wind energy is to reach 3-5,000 MW.
The government has encouraged the development of renewable energy, especially wind and solar power, across the country and across all sectors of the economy. Among the various business operations, the medium- and small- sized enterprises have invested the most into the development of renewable energy. Concurrently, thousands of households have invested in rooftop solar systems without any challenges in terms of input capital and technical issues. Few of the renewable energy businesses are state owned. Within only three years, the electricity sector mobilised approximatedly USD 10 billion to invest in solar and wind projects. This is evidence of the successful implementation of policies geared to encouraging investment in power sector development.
Besides the businesses that provide consultancy and project management services for renewable energy development, the construction industry and equiment manufacturers have also benefited from the country’s efforts to raise the share of clean energy. In addition, the share of the required equipment and machinary produced domestically relative to the share of imported equipment and machinery has been steadily rising.
The government plans to develop retail and wholesale electricity markets in the near future, as well as more self-consumed rooftop solar power, a direct power purchase agreement (DPPA) mechanisms and Renewble Energy Certificates (RECs)
About the Author
Nguyen Ninh Hai
Head of Renewable Energy Division under Electricity and Renewable Energy Authority of Minstry of Industry and Trade (MoIT) of Vietnam.
Mr. Nguyen Ninh Hai is Head of Renewable Energy Division under Electricity and Renewable Energy Authority of Minstry of Industry and Trade (MoIT) of Vietnam. Mr. Hai has started working for MoIT on Renewable sector since 2008. Mr. Hai has been particiating in drafting incentive mechanisms to promote development of renewable energies in Vietnam such as FIT for wind power, biomass, and municipal solid waste to energy and solar power and other policies and stratergies related to renewable energy in Vietnam such as Competitive Auction for Re projects and National Stratergy on promoting development of renewable energy in Vietnam. Mr. Hai is also the Vietnam focal point of Renewable energy cooperation in ASEAN Member States (RE-SSN).