274 N. H. NGUYEN ET AL.
for more market-driven mechanisms to be introduced. These may include
auctions, and Direct Power Purchase agreements that allow renewable
electricity sellers and buyers to trade directly with lower transaction and
network costs.
Conclusion
Vietnam is endowed with excellent potential for renewable energy, especially solar and wind resources. It is expected that the power mix will
transition from fossil-fuel reliance, with renewable-energy technologies
requiring more space and a concrete roadmap to improve their contributions to the national energy mix. Several strategies and master plans
have been introduced to promote the development of solar, wind, and
biomass energy. These strategies and master plans establish the development targets for each renewable energy technology as well as the
policy frameworks required to achieve these targets. The success of solar
power in Vietnam, with installed capacity increasing from a few MWs to
4500 MW over a mere 1.5 years, demonstrates how a strong FIT could
unlock the huge potential of solar deployment and private investment in
the power sector.
However, instead of subsidies like the FIT, more market-based mechanisms are needed to sustainably accelerate renewable energy development
in Vietnam. Low electricity tariffs are hindering the liberalization of the
electricity market and longer-term engagement from private stakeholders.
Possible options such as Direct Power Purchase Agreements and solar and
wind power auctions are being considered at the political level, and are
expected to fully realize Vietnam’s renewable energy potential as one of
the key contributors to national energy security, and a sustainable energy
mix.
Notes
1. Applicable for programs utilizing the state budget.
2. In most cases, nationally recognized and competent consultant firms have
been involved in developing and appraising the energy plans. Recent PDPs
were all developed by the public think tank Institute of Energy. For the
latest PDP, new procedures were requested by the deputy prime minister
related the involvement of an international expert to review the revised
PDP.
for more market-driven mechanisms to be introduced. These may include
auctions, and Direct Power Purchase agreements that allow renewable
electricity sellers and buyers to trade directly with lower transaction and
network costs.
Conclusion
Vietnam is endowed with excellent potential for renewable energy, especially solar and wind resources. It is expected that the power mix will
transition from fossil-fuel reliance, with renewable-energy technologies
requiring more space and a concrete roadmap to improve their contributions to the national energy mix. Several strategies and master plans
have been introduced to promote the development of solar, wind, and
biomass energy. These strategies and master plans establish the development targets for each renewable energy technology as well as the
policy frameworks required to achieve these targets. The success of solar
power in Vietnam, with installed capacity increasing from a few MWs to
4500 MW over a mere 1.5 years, demonstrates how a strong FIT could
unlock the huge potential of solar deployment and private investment in
the power sector.
However, instead of subsidies like the FIT, more market-based mechanisms are needed to sustainably accelerate renewable energy development
in Vietnam. Low electricity tariffs are hindering the liberalization of the
electricity market and longer-term engagement from private stakeholders.
Possible options such as Direct Power Purchase Agreements and solar and
wind power auctions are being considered at the political level, and are
expected to fully realize Vietnam’s renewable energy potential as one of
the key contributors to national energy security, and a sustainable energy
mix.
Notes
1. Applicable for programs utilizing the state budget.
2. In most cases, nationally recognized and competent consultant firms have
been involved in developing and appraising the energy plans. Recent PDPs
were all developed by the public think tank Institute of Energy. For the
latest PDP, new procedures were requested by the deputy prime minister
related the involvement of an international expert to review the revised
PDP.