Vietnam makes a big push into renewable energy

Vietnam makes a big push into renewable energy

By Huynh Kim

According to a representative of GreenID, while the world is breaking up with coal-fired power, Vietnam also begins to promote investment in renewable energy.

Opening a recent seminar on renewable energy, Nguy Thi Khanh, chief executive officer of GreenID, said the time for renewable energy in Vietnam has come. “We all know that the world is running out of fossil fuel and renewable energy emerges as a new trend,” said Ms. Khanh.

According to her, 2018 was the third consecutive year that the capacity of coal-fired power reduced across the board. The capacity of newly built coal-fired power plants was down 39% compared to 2017 and 84% against 2015. The capacity of those awarded with operation certificate dropped by 20% over 2017 and 53% over 2015. Pre-construction operations fell by 24% versus 2017 and 69% versus 2015.

In China and India, which have accounted for 85% of the global coal-fired power since 2015, the number of new coal-fired power plants has drastically decreased. China approved new power plants totaling 5GW in 2018, way below 184GW in 2015. In India, the total capacity of licensed coal-fired plants was less than 3GW in 2018 versus 39GW in 2010.

Meanwhile, the number of closed power plants peaked. In the United States, many coal-fired power plants whose total capacity amounted to 17.6GW were shut down in 2018 even President Trump still wanted to maintain them. Similarly, many localities and cities in Europe and the U.S. joined a union fighting the use of coal to generate power initiated by the UK and Canada.

“The biggest coal-fired power plant in South Korea has been closed,” said Ms. Khanh. “In many countries, contractors in the sector have faced the toughest business environment.” More than 126 banks and insurance firms worldwide have tightened their financial conditions and 33 countries and 27 local governments have pledged to step up the process of putting a stop to coal-fired power and switch to clean energy.

Vietnam encourages investment in renewable energy

Following that trend, Vietnam has kicked off her energy restructuring effort to ensure that the power demand will rise sustainably and fairly. The power reshuffle will ensure Vietnam’s energy security, reduce emission, maintain economic development, and better access to energy at affordable prices and create jobs for the community.

According to Ms. Khanh, Decree 55 on energy development strategy until 2045 endorsed by the Politburo in February 2020 provides the lifeline. It relates to formulating policies on promoting and developing renewable energy which replaces as much as possible fossil fuel, diversify energy sources and fully utilize sources of renewable and clean energy. In addition, roadmaps for coal-fired power reduction should be charted out while economic sectors, especially private entrepreneurs, are encouraged to develop energy projects and a transparent and competitive market is created.

Pertaining to the policies on renewable energy development, in accordance with Decree 55, Vietnam Electricity is committed to buying all power generated from renewable energy plants within 20 years. Power prices will be adjusted hinging on the exchange rate between dollar and Vietnam dong. Moreover, there are also incentives for investments, export tax, corporate income tax and land rentals and fees for land use.

The conclusion of the draft of the Eighth National Power Master Plan to be submitted soon by the Ministry of Industry and Trade to the Prime Minister includes notable points. They are bigger scale of wind and solar power development, no new coal-fired plants during 2026-2030, elimination of 9.5GW generated from imported coal-fired power plants and delay of 7.6GW of coal-fired power until after 2030-2035, including Quynh Lap 1 and 2 projects whose total capacity is 2,400MW. The southern and central regions will focus on renewable energy and liquefied natural gas (LNG) while imported coal-fired power will be developed mostly in the north. After 2025, power transmission lines from the south central region to the north region will be installed and the transition to sustainable energy will be encouraged.

The Mekong Delta becomes energy center in the south

According to the amended seventh national power plan, the Mekong Delta is expected to become an energy hub for the south. Bac Lieu and Long An provinces have canceled big coal-fired power projects to call for investment in wind, solar and biomass power plants. Bac Lieu has added two wind power projects with total capacity of 200MW to the seventh national power plan. Meanwhile, the remaining projects capable of generating 8,690.6MW have been supplemented to the eighth national power plan—comprising 7,170.6MW from wind power, 1,500MW from solar power and 30MW from biomass power.

In particular, the Prime Minister has agreed to incorporate the 3,200MW Bac Lieu LNG power plant costing US$4 million to the seventh national power plan. Its investor, Delta Offshore Energy Company, is now finishing the procedures so that it can start construction soon. The project’s first phase, which will generate 750MW, is scheduled for service in 2024. The whole project will be completed in 2027.

According to the provincial Department of Industry and Trade, An Giang is home to 10 solar power projects whose total capacity is 1,800MW. Currently, four plants among them have been put into use and generate 214MWp. Some other projects will be operation soon, adding 320MWp more to the national grid. Furthermore, 37MWp from rooftop solar power systems were added to the national grid in early November 2020. In addition, a model of combination of high-tech agriculture and rooftop solar power systems have been introduced in Can Tho City as well as other provinces and cities in the delta.

In the past two years, Vietnam has been in the leading position in solar power development in ASEAN, according to GreenID. In June 2020, the total renewable energy capacity (mostly solar power) reached about 5,500MW, which included 31,750 rooftop solar power systems. Renewable energy currently accounts for 10% of Vietnam’s national power.