VIETNAM

VIETNAM

Vietnam installed Solar PV capacity has cross 16 GW by 2020. By 2030, the Vietnamese government has set a target to increase the country’s Solar Power generation capacity. Solar Power will be developed from the capacity of about 17 GW in the period of 2020-2025 to about 19-20 GW in 2030. The ratio of Solar installed capacity accounts for 17% of the total installed capacity by 2025 and 14% of the total installed power capacity by 2030. Solar and Wind Energy will be substantially developed in the future, with the ratio of capacity reaching over 42% in 2045. The ratio of renewable energy sources (including large-scale hydropower) will reach 53% of the total capacity in 2045. The ratio of renewable energy (excluding hydropower) in the PDP8 (Power Development Plan) has increased to almost 30% in 2030, while such ratio in the amended PDP7 (Vietnam Power Development Plan) was only at 16.3%. The major changes include: until 2030, onshore and nearby-shore Wind Power will develop an additional capacity of 9 GW, and offshore Wind Power will develop an additional capacity of 2 GW to 3 GW, Solar Power will develop an additional capacity of 7 GW, Biomass Power will be reduced by 0.5 GW, and small-scale hydropower will be reduced by 1.8 GW. As the country coming back from the pandemic, the electricity demand is expected to increase by over 9 percent from 2021 in the coming decade. The Ministry of Industry and Trade (MoIT) in a draft report estimate that Vietnam needs around $128.3 billion of investment to build its electricity industry from the period 2021-2030. Out of the total $128.3 billion, $32.9 billion will be used to build the power grid while the other $95.4 billion is needed for power generation. So, for the 2021-2030 period, the average annual investment needed will be about $12.8 billion annually. Many of Vietnam's new accomplishments with Solar based energy can be credited to feed-in-tariffs (FiT). FiTs energize investment in renewable space by ensuring an above-market cost for developers. Since they involve in long-term contracts, FiTs help relieve the risk innate in renewable energy power generation. After the expiration of the old FiT program in June 2019, the government finalizes new Solar FiTs in April 2020 which was 10-24% lower than the previous across the country but are different by project type (utility-scale, rooftop, and floating solar). To get the benefit of new FiT rates, the developers had to commission the projects by 31st Dec 2020. Due to delays in the approval, project developers got very little time to commission the projects, also due to a supply chain issue affecting the delivery of the Solar PV module, along with the pandemic situation in the country, developers were not able to commission their project on time to get the benefit of FiTs. In Jan 2020, the Ministry of Industry and Trade submitted a proposal that traces a pilot program on direct Power purchase agreement (DPPA) mechanisms. DPPA program would permit energy makers to sell and transfer Power to corporate consumers as opposed to going through state-owned discoms. The proposition sets two years for executing the pilot program and spreads out the measures for participating developers and private consumers.