COUNTRY REPORT: VIETNAM
Rooftop solar power a ‘huge potential’ for Vietnam’s clean energy goals This is given Vietnam’s expansive network of industrial parks and the appetite for clean energy.
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f there there are countries whose energy sectors have powered through the obstacles brought by the pandemic, one worthy of mention is Vietnam. In 2020, the size of Vietnam’s power system expanded by 23% to 69 gigawatts (GW), the fastest annual growth registered. More importantly, most of the additional capacity came from solar power. The country had just welcomed the first wave of investment in solar power with astonishing results. Institute for Energy Economics and Financial Analysis (IEEFA) Energy Finance Analyst Thu Vu noted that with the government’s successful response to COVID-19 throughout 2020, renewable energy investors managed to push Vietnam further into the energy transition pathway. “In less than two years, non-hydro renewable penetration reached 25% of the system, and is on track to deepen further as a significant number of wind power projects are due to come online later this year,” Vu said. As demand starts to pick up in 2021,
Thu Vu
Vietnam is seeing the initial signs of a structural transition as solar power plants become more integrated into the system, replacing fossil fuel-based sources, such as gas or expensive oil-fired power. In the first half of the year, renewables accounted for 11% of the generation mix, up from less than 5% last year. At the same time, the rapid emergence of commercial and industrial rooftop solar power is a trend worth noting especially this year. “Amidst the delayed issuance of the next round of feed-in-tariff policy for rooftop solar, developers have been focused on rooftop solar installations with solutions that would maximise on-site consumption by commercial and industrial users,” Vu said. Such occurrence is an area of huge potential for Vietnam given its expansive network of industrial parks and the appetite for clean energy from global brands and their suppliers to Vietnam’s export markets. “This is a win-win solution for all stakeholders and one that is here to stay,” the analyst said.
In 2020, the size of Vietnam’s power system expanded by 23%, most of the additional capacity came from solar power
20 ASIAN POWER
Meanwhile, Vu observed that the party which has been facing the most challenges adjusting is the state-owned utility company Electricity of Vietnam (EVN). “On one hand, there’s the pressure to integrate this new variable renewable energy source into the system, through necessary grid upgrades and dispatch decisions affecting other generation sources such as coal or gas. On the other hand, demand growth has plummeted by 3.4% in 2020 versus the pre-pandemic 10%, and the government froze electricity tariffs, forcing EVN to manage the generation mix and cost profile very carefully,” she said. Most generation sources have felt the impact, with a lower utilisation rate of the coal and gas power fleet and curtailment risk materialising for solar power plants. Looking into Vietnam’s PDP8 Meanwhile, delays in the power planning process have been the biggest challenge for Vietnam this year. The current status of the Power Master Development Plan 8 (PDP8), which will determine the role and room for growth
