In the first seven months of 2022, the renewable energy sources in Vietnam reaches over 22 billion kWh, accounting for 14% of the electricity output of the whole system, with solar power alone reaching 16.54 billion kWh, wind power reaching 5.24 billion kWh. (Illustrated image - Photo: Getty)

Great potentials

Vietnam has favorable conditions for renewable energy development thanks to the long and narrow geographical shape of the country with more than 3,000 km of coastline and lots of hills and mountains.

Vietnam is also among the countries with the highest number of sunshine hours in Asia, averaging 1.500-1.700 hours per year. The solar radiation intensity does not change significantly within a year.

According to the World Bank (WB), besides solar energy, Vietnam also has great potential for wind power. The analysis shows that approximately 370 GW of renewable energy could be generated by 2040, helps reduce reliance on fossil fuels.

Recently, renewable energy projects have developed strongly and mainly in the Central and Southern regions. By 2021, the Central region developed about 9 GW of renewable energy and the Southern region reached the capacity of nearly 12 GW.

By the end of 2021, renewable energy sources in our country had a total installed capacity of 20,670 MW, accounting for 27% of the total installed capacity of the whole system (76.620 MW); total electricity output from renewable energy sources reached 31.508 billion kWh, accounting for 12.27% of the total output of the whole system.

Statistics of the Electricity of Vietnam (EVN) show that, in the first seven months of 2022, the rate of mobilizing renewable energy sources reached over 22 billion kWh, accounting for 14% of the electricity output of the whole system, solar energy alone reached 16.54 billion kWh, and wind power reached 5.24 billion kWh.

As the second largest electricity consumer in Southeast Asia, in order to achieve net-zero emissions commitments by 2050 as stated by Vietnamese leader at the 2021 Conference of the Parties of the United Nations Framework Convention on Climate Change (UNFCCC) – COP26, Vietnam is actively and proactively developing renewable energy. The government has offered tax incentives and applied a mechanism of price support to purchase electricity from renewable energy projects.

It is considered to contribute to promoting the development of the domestic renewable energy industry, and at the same time opens up great opportunities for businesses to invest in the energy industry in general or renewable energy in particular.

As estimated, if Vietnam maintains a rapid expansion in renewable energy, it will move up further in the rankings, possibly surpassing countries such as Australia and Italy in terms of renewable energy and innovative development solutions.

Advice from experts

At the recent Conference on the impact of COP26 on energy transition towards green growth, Mr. Rahul Kitchilu, Program Leader for Infrastructure and Lead Energy Specialist at the World Bank (WB) said: “Vietnam is one of the leading country in renewable energy development with capacity of more than 20 GW and has mobilized total 17 billion USD in private investment in the past 2 years. This is a remarkable effort and a serious step towards accelerating the clean energy transition and removing carbon from the economy”.

In order to maintain the growth in renewable energy, Mr. Rahul suggested, there should be improvements in the planning of expanding of the energy system and in the legal framework for procurement to ensure the supply of renewable energy at a low cost.

The International Energy Agency (EIA) estimated that, in 2022, investment costs for solar and wind power have increased by about 15-25% compared to that os 2020. However, in the context that oil/gas prices remain high and likely to be higher, while European countries accelerate the renewable energy investment process, the economic advantage thanks to big scale and the expectation of downtrend of materials help reduce the cost of investment for renewable energy in the long term.

According to a report by research firm BloombergNEF, global investment in small and large-scale solar projects increased by 33% in the first half of 2022 to a record of 120 billion USD, while investment in wind power projects increased 16% to 84 billion USD.

Meanwhile, WB experts said that Vietnam would need about 166 billion USD to invest in the power sector by 2040 to realize the COP26 targets.

In order to meet the fiscal needs, the WB representative stressed on the combination of various resources, including reallocating domestic savings to climate-related projects, increasing national reserves and external financial assisstance.

According to the World Bank, Vietnam should work closely with multilateral and bilateral development partners to ensure the financial sources for green energy transition efforts.

Besides solar energy, Vietnam also has great potential for wind power. (Source: Getty)

Unstoppable effort

According to the WB, in the past time, Vietnam had mechanisms and policies to support renewable energy such as the application of FIT prices for wind and solar power, which has contributed to creating a "explosion" in the development of this energy sources.

The Government's draft on the VIII Electricity Overall Plan orients national electricity development in the 2021-2030 period, with a vision to 2045, firmly ensuring national energy security; in which priorities should be placed on the development of clean and sustainable energy associating with the protection of the ecological environment. At the same time, the Government encourages and creates favorable conditions for all economic sectors, especially the private sector, to participate in energy development.

In early August 2022, the Government Office issued Notice No. 231/TB-VPCP concluding the third meeting of the National Steering Committee to implement Vietnam's commitments at COP26.

The announcement stated that, in order to achieve the goal of net zero emissions by 2050, the Steering Committee has agreed to supplement and clarify views and policies to implement tasks and solutions to fulfill the commitments of Vietnam at the COP26 Conference.

The Steering Committee requested the Ministry of Natural Resources and Environment to summarize and monitor the implementation of the Scheme on tasks and solutions to implement COP26 results, and promptly report to the Steering Committee any arising problems.

The Ministry of Finance chairs, and coordinates with the Ministry of Natural Resources and Environment in urgently submitting to the competent authorities for approving the Scheme on developing a carbon market in Vietnam in compliance with the provisions of the Law on Environmental Protection in 2020.

The Ministries of Industry and Trade, Transport, Agriculture and Rural Development, Natural Resources and Environment, Construction with its own authorized management functions are urged to issue detailed guidelines on greenhouse gas inventory, measuring - reporting - appraising greenhouse gas emission reductions, ensuring the content and progress in accordance with regulations, etc.

The Steering Committee requested the Ministry of Planning and Investment to develop a program to encourage and attract businesses to respond to climate change, green and digital transformation.

With unstoppable efforts, Vietnam will continue to act quickly, strongly, inclusively and comprehensively, especially in the field of energy transition to turn the commitments at COP26 into reality, contributing to strongly improve the country's image in the globe.