Last year, Vietnam connected 9.3 GW of solar capacity to the grid, and became the third largest solar power market in the world. The miracle that Vietnam has achieved in the field of renewable energy is motivating international investors to invest in ASEAN region.
Achievements in the last month of 2020
Last year, Vietnam just hit a new milestone in the solar energy sector: As of December 31, 2020, Vietnam Electricity (EVN) confirmed there had been a total of 9.3 GW rooftop solar power connected to the national grid.
Also at the end of 2020, Vietnam also hit a new record of increasing rooftop solar capacity to 8 times from 378 MW in 2019. In particular, 6 GW out of 9.3 GW of newly installed capacity set in the last month of 2020, when the government’s feed-in-tariff (FIT) price mechanism is about to expire. As a result, Vietnam will become the third largest solar power market in the world by 2020, written by the ASEAN Post.
Due to the impact of the COVID-19 pandemic, 2020 is considered a rather bleak year for the energy sector in ASEAN. However, Vietnam has demonstrated that the impact of the epidemic on the renewable energy sector, especially solar power, may be insignificant if the government implements appropriate pandemic control measures and intervention policies.
Vietnam’s policy to support the rooftop solar power sector is quite different from that of ASEAN neighboring countries. While Malaysia and Thailand apply power compensation mechanism using two-way meter (net-metering scheme), and Indonesia mainly focuses to develop solar power in residential areas, Vietnam has FIT price.
According to ASEAN Post, Vietnam’s FIT pricing mechanism benefits investors, encouraging them to install more rooftop solar power for self-use or sale to the national grid. Solar power projects in Vietnam not only involve households but also industrial parks and commercial investors. Thanks to that, Vietnam has attracted huge capital and installed about 101,000 rooftop solar power projects so far.
In the draft Power Master Plan VIII, Vietnam wants renewables to account for a larger share of the energy pie by 2030 and even until 2045. Vietnam will increase power transmission capacity and upgrade the power system to operate the grid more flexibly, meaning that coal capacity will have to be significantly reduced.
Specifically, Vietnam aims not to build new coal-fired power plants in the period 2026 – 2030; removing 9.5 GW of imported coal power projects; and reducing 7.6 GW of coal power after 2030-2035. Meanwhile, solar and wind power are expected to account for 28% of total electricity capacity by 2030 and the share will increase to about 41% by 2045.
The impact of the solar power fever on Vietnam’s electricity industry is quite clear, but what does this mean for Southeast Asian countries?
Vietnam raises the attraction of ASEAN to a new high level
The ASEAN Post said that Vietnam has put ASEAN on the global investment map in the renewable energy sector, success or failure now depends on the efforts of the whole economy. Having experienced a solar power boom twice, from the FIT price mechanism in 2019 to the rooftop solar power program in 2020, Vietnam has gradually become the global focal point for renewable energy investment.
As the third largest solar power market in the world by 2020, Vietnam’s attraction in the eyes of foreign investors is increasing. This opportunity can bring luck to ASEAN, Vietnam is opening the door for neighboring countries to receive large capital from international investors.
Southeast Asia is the sixth largest economy in the world, so the demand for electricity from sustainable resources will increase rapidly. So, ASEAN needs billions of dollars to invest in renewable energy. If ASEAN countries quickly recognize new opportunities and build a competitive market as well as develop a favorable investment environment, Vietnam’s success can be replicated throughout Southeast Asia.
Furthermore, Vietnam’s success in the solar power sector has created a golden opportunity for ASEAN to accelerate its energy transition. If Vietnam continues to install renewable electricity at the current rate, our country can help ASEAN fulfill its goal of raising the share of renewable electricity in the total power capacity to 23% by 2025.
ASEAN Post commented that Vietnam is the new tiger of the region in the field of renewable energy, surpassing the previous pioneer country, Thailand. In 2017, the share of renewable electricity in ASEAN’s primary energy supply was still around 13.7%. According to the 6th ASEAN Energy Outlook, ASEAN needs to add about 138 GW of renewable electricity over the next five years, with solar power accounting for 56% and hydropower accounting for 22% of the overall electricity pie.
To achieve the above target, Southeast Asia needs about 149 billion USD of additional investment until 2025. If Vietnam maintains the current growth rate of solar power, our country can narrow the gaps among the targets of the region’s renewable energies.
Besides, Vietnam can also create a great momentum for the ASEAN Power Grid system, thereby building a new “intersection” with Vietnam as another electricity trading hub. Currently, Southeast Asia has such an intersection, connecting the electricity networks of Laos, Thailand and Malaysia and Singapore is expected to join the network.
It may not be long before Vietnam becomes another renewable electricity trading destination in Southeast Asia, besides Laos, the ASEAN Post concluded.
Source: vietnambiz.vn
