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Renewable energies on the rise in Viet Nam

Vietnam has seen an enormous rise of renewable energies over the past months. Installed capacity of solar photovoltaic (PV) and wind power currently is around five gigawatts, equivalent to 9.5 percent of the country’s total installed power generation capacity. In particular, the expansion of solar power recorded a rapid growth to 4.5 gigawatts in the first half of 2019 from only a few megawatts at the end of 2018. By the end of the year, around one gigawatt of additional electricity generated from solar and wind sources shall be installed. According to forecasts, this is only the beginning: For the period until 2040, renewable energy is predicted to boom. By 2025, installed capacity of wind and solar PV could increase to 15 gigawatts (GW), by 2030 to 25 GW and by 2040 to 40 GW. Solar PV power would continue to dominate, but the share of wind energy shall increase steadily from 2020, up to about 18 GW by 2040. These figures are based on the projects that are currently installed and approved by the government. However, it is still unclear whether and to what extent these projects can actually be realized and integrated into the electricity grid. There are already initial bottlenecks in transmission network capacities in some “hotspot” regions. The integration of the existing solar and wind power project pipeline requires extensive investments in the power grid and further measures to make the energy system more flexible.

Decisive for the current boom are improved political framework conditions as well as the steadily progressing cost reduction, especially in solar power technology. In particular, the introduction of a feed-in tariff for solar power (Prime Minister Decision 11/2017 of 11 April 2017) has triggered extensive investments in photovoltaic ground-mounted solar systems and solar rooftop projects.

The Deputy Director General of Electricity of Vietnam (EVN), the state-owned utility, recently said at the Vietnam Energy Forum 2019 that the development of rooftop solar PV will help reduce grid expansion needs for renewable energies (because of generation directly on the spot) and reduce costs for expensive peak load power generation.

The feed-in tariff for rooftop solar PV in Vietnam is currently 9.35 US cents per kWh. The Ministry of Industry and Trade (MOIT) has proposed to extend this rate until 2021 in order to further promote the development of solar energy on buildings. In central and southern Vietnam the potential for the development of rooftop solar PV is high due to solar radiation of 4.2 to 4.8 kWh per square meter per day.

Launching of the Rooftop Solar Promotion Programme
In addition, the MOIT has launched a national solar rooftop programme, which was presented on 25 July 2019 as part of a kick-off workshop by the Deputy Minister of Energy and Trade.
The programme targets to promote the expansion of solar energy in the country in order to reach 100.000 solar rooftop projects with an installed capacity of one GW by 2025, as defined in the national strategy for the expansion of renewable energies. The programme is supported by the United States of America through USAID, the World Bank, the EU and Germany through GIZ and KfW.

Programme components are as follows:
3.1 Develop and complete policies, regulations relevant to the support of the development of rooftop solar with the orientation to shift to market conditions,
3.2 Standards, inspection, and testing,
3.3 Promote market conditions and pilot support program,
3.4 A programme for training and certification for solar PV installers.

By implementing this programme, Vietnam and its international partners contribute to meeting the growing demand for electricity of around 10% per year in a more climate-friendly way.

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In charge of this newsletter:
Daniel Herrmann,
IKI Interface Vietnam
GIZ Office Vietnam
Project “Support to Vietnam for the Implementation of the Paris Agreement”

Editor: Tran Xuan Quynh

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The IKI Vietnam Newsletter is administered by the IKI interface in Vietnam hosted by GIZ. It informs regularly about news of climate change and biodiversity projects in Vietnam financed by the International Climate Initiative (IKI). The International Climate Initiative (IKI) is an important part of the German government’s international climate finance commitment. Since 2022 the IKI is implemented by the Federal Ministry for Economic Affairs and Climate Action (BMWK) in close cooperation with the Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV) and the Federal Foreign Office (AA).

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