Members of the Vietnamese government, led by Prime Minister Pham Minh Chinh, pledged carbon neutrality by 2050 at the United Nations (UN) Climate Change Conference in 2021. To achieve this goal, Vietnam, a developing country, would have to transition from coal plants and revitalize its national grid.

As per the Asian Development Bank, Vietnam’s GDP is expected to recover at a rate of 6.5 percent in 2022. As a result, power consumption has climbed at a rate of more than 11% each year, well outpacing the national GDP. This satisfies an almost insatiable appetite for more power production and investment.

Domestic fossil fuel output, on the other hand, is unable to meet demand, forcing Vietnam to rely on international markets to obtain sufficient resources to power its infrastructure. As a result, Vietnam’s dependence on imported energy to power its electric system, as well as climate change, are driving forces behind the government’s shift to renewable energy.

 

Vietnam’s potential as a renewable energy powerhouse

The necessity for a clean energy transition in Vietnam has never been more pressing. The country has demonstrated its commitment to the project, particularly when it comes to solar electricity, as among Southeast Asia’s fastest-growing economies.

Vietnam now has the most extensive installed solar power potential in Southeast Asia, as per the World Bank, with 16,500MW expected to be generated by 2020. Furthermore, in 2020, Vietnam was among the top ten countries in the world with the greatest solar energy capacity installed.

Vietnam has every chance to be a worldwide leader in renewables, given its high solar PV possibilities and aggressive green energy ambitions by 2050. There is also a compelling case for developing wind energy projects in Vietnam, given evidence that it has some of the region’s best wind resources, with a 311 GW potential.

Market analysts say that if Vietnam continues its rapid development of renewable energy, it would leapfrog countries like Italy and Australia in terms of renewable energy production and innovative solutions.

 

The renewable energy sector in Vietnam is divided into several segments.

Wind energy

Vietnam’s climate and topography make renewable power, particularly wind power, an attractive investment opportunity. The nation’s long and narrow geographic structure, which includes nearly 3000 kilometers of coastline and a mix of hills and mountains, has resulted in a significant wind resource.

 

As per the World Bank, wind speeds of more than 6 meters for every second (m/s) at 65 meters are found across more than 39 percent of Vietnam, equating to 512 GW (gigawatts) of capacity. With 8.6 percent of its land area ideal for major wind farms, Vietnam has a lot of potentials.

Leaving aside the costs of building the requisite transmission infrastructure, Vietnam will have to invest billions to meet this goal. Private sector participation is crucial due to the constraints of state funds and the economic constraints involved. This demand has paved the way for global investors to enter and invest in Vietnam’s mostly unexplored wind energy sector.

 

Solar energy

Vietnam’s solar photovoltaic (PV) expansion has been remarkable recently, and this is only the commencement of the country’s massive energy shift away from coal. Solar PV capacity in the country expanded from 86 megawatts (MW) in 2018 to almost 16,500 megawatts (MW) in the year 2020.

As a result, Vietnam has overtaken Thailand as the Nation with the most solar power capacity installed. In 2020, solar PV systems will generate around 10.6 TWh of power, accounting for over 4% of total output.

By 2030, rooftop solar is going to account for over half of all solar capacity in Vietnam. International investors will find it difficult to pass up such lucrative investment opportunities in the face of a viable solar energy production environment.

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