Vietnam is among the Top 10 investors in renewable energy development in the world
Vietnam is ranked in the Top 10 (ranked 8th) of countries with the highest investment in renewable energy in the world, reaching 7,4 billion USD.
Reached Top 10 in the world
As one of the fastest growing economies in Southeast Asia, Vietnam has demonstrated its seriousness in pursuing the green energy transition, especially when applying solar power.
In fact, according to a report by the World Bank (WB), Vietnam currently has the highest installed solar power capacity in Southeast Asia, generating 16.500MW by the end of 2020. Statistics from the Renewable Energy Agency International Energy Agency (IRENA) shows that, by the end of 2020, Vietnam was in the Top 10 countries with the highest installed solar energy capacity in the world.
Considering the potential of solar power and green energy goals by 2050, Vietnam is qualified to become a regional and world leader in renewable energy. In terms of wind power projects, Vietnam has one of the best wind resources in Southeast Asia, with an estimated potential of 311 GW.
Market experts predict that if Vietnam continues to maintain the rapid pace of renewable energy expansion as it has over the past two years, Vietnam will continue to rise higher in the rankings, potentially surpassing countries such as Australia. and Italy on developing renewable energy and innovative energy solutions.
According to the International Energy Agency (IEA), Vietnam is the second largest electricity consumer in Southeast Asia. This is one of the regions with the fastest growing energy demand in the world and over the past 20 years, demand has increased at a steady rate of 6% per year. The four largest electricity consumers are Indonesia, Vietnam, Thailand and Malaysia, accounting for more than 80% of total demand in the region.
The Vietnamese Government's commitment to boosting energy supply and the strong need to improve air quality are important underlying drivers in this direction.
Well-designed and implemented supporting regulations and policies such as import tariffs (FiT), tax incentives and land tax exemptions are also considered fundamental factors promoting renewable energy growth, especially especially solar energy, in Vietnam.
The IEA report affirms that community demand for environmental protection is the second most important driving force. Experts believe that Vietnam will attract renewable energy investors and financiers due to its many green energy opportunities.
Inevitable development trend
Speaking at the Workshop "Promoting a network of pioneering businesses towards 100% renewable energy" organized by VCCI/HCM in collaboration with WWF and GreenID, Mr. Nguyen Huu Nam - Deputy Director of the Chamber of Commerce and Industry Vietnam Drug Industry - City Branch. Ho Chi Minh City (VCCI/HCM) said that according to researchers, Vietnam's GDP growth forecast in the period 2021-2030 will average about 6,6%/year, in the period 2031-2045. average about 5,7%/year. Vietnam's GDP growth will require an energy source for that growth equal to the electricity demand for development, equivalent to about 12-15%/year.
According to the Resolution of the Politburo, with an orientation to 2030, Vietnam set the target of the electricity access index ranking 3rd in ASEAN. Reliability of power supply in ASEAN, Vietnam strives to rank 4th in ASEAN. Mr. Nam assessed that this is a very ambitious goal and orientation of Vietnam for electricity access targets.
Deputy Director of VCCI/HCM said that to achieve the above goals, besides traditional energy sources and fossil energy, we also aim to develop renewable energy. It is expected that by 2030, renewable energy will account for 15-20% of the total primary energy supply. By 2045, it is expected that renewable energy will account for 25-30% of the total primary energy supply.
According to Mr. Nam, the installed capacity target, electricity planning VII has been adjusted to include renewable energy, coal energy, gas energy, imported energy, hydroelectricity, nuclear power... In which, renewable energy Generation will gradually increase, while energy from coal power will remain steady at about 36%, from 2017-2020; The period 2020-2025 increases to 49% and decreases to 42% in the period 2025-2030.
“In addition, currently renewable energy projects are operating or being approved in Vietnam including wind energy and solar energy spread across the South Central region. As for biomass energy, this is a type of energy that has not really been developed, mostly small projects distributed throughout the regions," Mr. Nam assessed.
According to the World Bank's assessment of the business environment in Vietnam in 2020, among the criteria set by the World Bank are establishing a business, applying for a construction permit, and accessing credit. , access to electricity…
Regarding access to electricity, the World Bank estimates that Vietnam ranks 27/190 economies in the world, reaching 88,2 points, an increase of 0,26 points compared to the previous year.
Deputy Director of VCCI/HCM Nguyen Huu Nam said that Vietnam is in the Top 10 (ranked 8th) of countries with the highest investment in renewable energy in the world, reaching 7,4 billion USD.
Meanwhile, France and Germany are 7,3 and 7,1 billion USD. With this level of investment, Vietnam has surpassed the world's two major economic powers in investing in renewable energy.
Besides, Mr. Nam said that shifting from fossil energy to renewable energy or green energy is an inevitable trend in the world and Vietnam is no exception. This energy conversion will reduce greenhouse gas emissions and protect the environment, while reducing dependence on fossil fuels.
“We are talking about circular economy, and biomass energy is one of the factors to develop circular economy. Developing this source of energy, we can take advantage of all kinds of resources.
Resources from this industry's waste will be a resource, a source of energy for the next industry. Therefore, we also need to develop this biomass energy source. However, this energy source is not absolutely green energy like solar energy or wind energy," Mr. Nam shared.
There are still many "bottlenecks" that need to be resolved
Although currently, renewable energy is being encouraged to invest and develop to gradually replace coal power sources. However, Mr. Nam said that there are still many "bottlenecks" that make the development of renewable energy not smooth.
Mr. Nam pointed out 3 bottlenecks for renewable energy development in Vietnam from Eurocham's perspective. Specifically, lack of policy framework and enforcement capacity; Low electricity tariff, with subsidies and no roadmap to respond to future electricity tariff fluctuations; lack of financial mechanisms for investment in energy efficient and energy saving technology.
From the above bottlenecks, Mr. Nam made 7 recommendations for the development of renewable energy in Vietnam:
first, The State needs to separate the business function from the State management function of electricity;
Monday, The State needs to invest and upgrade the power transmission grid in a synchronous and appropriate manner to be able to receive and transmit solar power and wind power, avoiding wasting electricity that cannot be transmitted because of the power grid.
Tuesday, creating a transparent, stable and long-term legal environment, especially predictable so that investors can feel secure in investing in large-scale and long-term renewable energy development;
Wednesday, encouraging non-state investors to invest in smart power grids to ensure efficient and economical use of electricity;
Thursday, removing all barriers to ensure transparent energy prices determined by the market;
Friday, building preferential policy mechanisms for renewable energy development projects such as access to capital, land, water surface, corporate income tax incentives,...
Saturday, The Government needs to consult with businesses, especially businesses investing in renewable energy, as well as consult with international organizations on orientation and promulgation of regulations on renewable energy development.
According to Financial Magazine