Partnerships of local know-how and international experience: Key to unlock the solar potentials for Vietnam

16:48 | 03/11/2017 Industry

(VEN) - High quality partnerships of local know-how and international experience are key to unlock the solar potentials for Vietnam. This insight was well shared amongst more than 100 representatives from provincial governments, investors and other stakeholders at the workshop ”Introduction of Circular 16/2017/TT-BCT on Solar Power Project Development and Standardized Power Purchase Agreement for Solar Power Projects” held in Ho Chi Minh City, on  November 03.

The workshop is organized within the framework of the Renewable Energy and Energy Efficiency (4E) Project, which is jointly implemented by the Electricity and Renewable Energy Agency (EREA), Ministry of Industry and Trade (MoIT), and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).

Solar is high on the agenda in Viet Nam since the publication of the Prime Minister’s Decision 11/2017 in April, which sets out the price for solar electricity at 9.35 US cents/kWh. However, the Decision also sets June 2019 as deadline for the solar power plants to be built and connected to the grid in order to receive the guaranteed solar feed-in tariff (FIT) electricity price.

“In this context, the workshop is a very important initiative from EREA as it provides guidance to investors, local governments and financial institutions. It is also an opportunity for local governments to gain deeper understanding about the Circular and insights about the latest solar developments, which will be helpful for a better assessment and approval of solar power plants at provincial levels”, said Ms. Sonia Lioret, Head of GIZ’s 4E project at the workshop.

As part of the workshop, the representatives from the Electricity and Renewable Energy Agency explained the content of the Circular 16/2017/TT-BCT on ”Solar Power Project Development and Standardized Power Purchase Agreement for Solar Power Projects” and answered questions from participants. Consultants from the GIZ shared international observations on solar power development in Vietnam, together with a presentation about international and regional experiences regarding the technical and financial assessment of solar power projects.

”Solar projects require high upfront investments. In some provinces, land availability or grid capacity limit the number of projects that can be approved by local and central authorities. It is therefore important to carefully assess the general viability of these new solar projects. This includes in particular the choice of the site, the experience of all parties and contract partners involved in the project, as well as the quality of the equipment and the installation process in order to avoid project failures or economic underperformance”. “As solar power is still quite new in Vietnam, and having in mind that all projects have to be built and connected by June 2019, we believe that the combination of local knowledge and international experience will be a great recipe for successful solar power projects”, said Rainer Brohm, a German solar energy expert who presented at the workshop.

According to the Vietnamese Government’s targets, solar power is expected to become the main new renewable energy source in the future, with an installed capacity to be increased from around 6-7 MW by the end of 2017 to 850 MW by 2020 (equivalent to 1.6% of the country’s power generation) and 12,000 MW by 2030 (equivalent to 3.3% of the country’s power generation).

My Phung