Expectations on renewable energy development

Large potential

According to Energy Department Director Pham Trong Thuc under the Ministry of Industry and Trade’s General Department of Energy, Vietnam currently imports energy from China and Laos. Given current production capacity and rapid socioeconomic development, the country will face shortages of primary energy resources from 2017 onwards.

Experts and investors indicated Vietnam as one of countries having advantages in developing wind and solar power, and energy from waste. With nearly 3,400km of coastal line, Vietnam’s wind power could reach an estimated 500-1,000kWh per sq.m a year. In addition, solar power can be generated thanks to average sun radiation of 5kWh per sq.m a day. Energy from small hydropower also reaches more than 4,000MW a year.

Vietnam can produce also 73 million tonnes of total biomass energy potential a year, including 60 million tonnes from agriculture, forestry and fisheries and 13 million tonnes from waste, which are conservatively estimated at 5,000MW.

Current capacity of renewable energy including small hydropower, biomass, waste, wind and solar power totals around 1,215MW, equal to 3.4 percent of its potential.

“Renewable energy will help Hanoi and Ho Chi Minh City to ensure energy supply in place. It is also a solution for energy security of the Vietnamese government since its significant contributions to green development,” Pham Trong Thuc said.

Being reluctant to invest in renewable energy

Some 77 wind power projects at an industrial scale have been registered in 18 cities and provinces throughout the country with total capacity of more than 7,000MW. However the deployment of these projects has faced many difficulties.

According to the Power Engineering Consulting Joint Stock Company 3’s Head of Renewable Energy Department Nguyen Hoang Dung, high investment costs for renewable energy projects are considered main challenge.

Dung also said that, “Renewable energy is a new sector for Vietnamese businesses who lack of experience and production capacity. Therefore, support policies for wind and solar power have expressed determination of the Vietnamese government in developing renewable energy. However these policies will only take effect if power projects become successful.”

Ho Chi Minh City Energy Conservation Center Director Huynh Kim Tuoc said that limitations in mechanisms and policies are seen as the biggest barrier for the development of renewable energy.

Financial problems including difficulties in accessing loans and low electricity prices are also mentioned.

Appropriate policies needed

According to the General Department of Energy, the Vietnam National Renewable Energy Development Strategy by 2030, with a vision to 2050 was approved by the prime minister by late 2015, creating a foundation for the development of renewable energy and aiming at raising all resources from the society to increase the share of renewable energy in total national energy production and consumption.

UNDP Country Director Bakhodir Burkhanov said that the Vietnamese government needs to issue the Law on Renewable Energy to create favorable conditions for domestic and foreign businesses to participate in the development of renewable energy.

“The private sector has confidence in huge potential of the Vietnamese renewable energy market, confirming the importance of policies to implement commitments and optimize the common benefits. Renewable energy has had rapid changes in the world,” Bakhodir Burkhanov said.

Son Ha International Corporation Chairman of Board of Directors Le Vinh Son said that to attract the participation of businesses, the state needs to create incentives for renewable energy and support technology transfer from advanced countries.

The using of renewable energy will contribute to implementing energy conservation, reducing environmental pollution climate change effect, and meeting sustainable economic development requirements.

Lan Anh