VIETNAM RENEWABLE ENERGY REPORT - Britcham
VIETNAMRENEWABLEENERGYREPORTJANUARY 2021Prepared by British Chamberof Commerce VietnamBritCham HCMC OfficeBritCham Hanoi Office25 Le Duan, Ben Nghe Ward,District 1, Ho Chi Minh CityT: 84 28 3829 8430 (Ext. 122)E: enquiries@britchamvn.com4th Flr, Belvedere Building, 28A TranHung Dao,Hoan Kiem, HanoiT: 84 24 3633 0244E: enquiries@britchamvn.com
OUR TEAMTRADE SERVICES EXECUTIVETuan ThieuMARKETING & COMMUNICATIONS EXECUTIVENhi NguyenDEPUTY DIRECTORAn DoanBUSINESS SERVICES MANAGERTruc DoanFINANCE & HR LEADEXECUTIVE DIRECTORBrian BullochMinh Phamwhat we do?The British Chamber of Commerce Vietnam (BritCham Vietnam) was officiallyestablished in Ho Chi Minh in 1998 with its Ha Noi branch founded in 2007. BritChamVietnam aims to support and develop Vietnam-UK business links while raising theprofile of Vietnam in the British business community and vice versa. As an accreditedBritish Chamber, BritCham Vietnam in association with the Department for InternationalTrade (DIT), is committed to promote strong business links between Vietnam and the UK.BUSINESS DEVELOPMENT REPRESENTATIVE:BUSINESS MATCHING:Partner search and one-to-one meetingswith potential clients, agents/distributorsor outsourcing partnersProvide a professional business developmentrepresentative to act locally on your behalf,strengthen existing engagements with theVietnam market on a long term basis and developfurther business relationships within the market.BUSINESS SERVICES EVENTS:INWARD INVESTMENTFACILITATION:Business Registration, Site Selection,Factory/Office Set-up & OperationsSupport,, HR & Financial ManagementOrganise trade missions, product launches andseminars/workshopsMARKET STUDIES:EXPORT OPPORTUNITIES:Sector reports, competitor analysis andlocal prospect background researchExplore your export opportunities to Vietnamthrough DIT’sportal ICE SUPPORTSOnline dialogues with experts withinindustries to forestall new trends in doingbusiness in VietnamDue Diligence, Marketing Materials &Company Documents Translation,Vietnam Entry ServicesCONTACT USBritCham VietnamW: www.britchamvn.comF: www.facebook.com/britchamvnT: www.twitter.com/britchamvnLi: www.linkedin.com/company/britchamvietnam/E: enquiries@britchamvn.com
OVERVIEWOVERALL SECTOR CONTEXTRenewable Energy Sector in Vietnam is oneof the most vibrant in Southeast AsiaLower middleincome countryStable country in SoutheastAsia, both in terms ofTerritory of more than330,000 squarekilometrespolitical system andeconomicdevelopmentA population of over90 MillionExcellent solar sourcesmainly concentrate in theSouthern partGood wind sources exist offshore,close to the Ninh Thuan coastRENEWABLE ENERGYVIETNAM'S POTENTIALPotential Capacity (MW)Installed Capacity (Technical)Small HydropowerSolid WasteWindBiomass7,14084002SolarRenewable Energy contributesover 3 Billion kWh per month10%of Capacity270(Commercial)27,7636%of National CommercialOutputSmall HydropowerSolid WasteWindBiomassRankings for Renewable Energygeneration of Vietnam2nd placein the ASEAN region23rd placein the worldSolar
OVERVIEWORGANISATION OFVIETNAM ENERGY SECTORGovernment ofVietnamMinistry of Industry andTrade (MOIT)GeneralDirectorate ofEnergy (GDE)VinacominVinacoal Power:coal and PetroVietnamPV-Power,PV-Gas,PV-Oil,PVEPElectricity RegulatoryAuthority of Vietnam(ERAV)Vietnam Electricity (EVN)5 PCs:EVNNPC,EVNCPC,EVNSPC,EVNHANOI,EVNHCMCGENCO 1,2, 3NPT,NLDC,EPTCPetroVietnam Power (PV-Power)PetroVietnam Gas Corporation (PV-Gas)PetroVietnam Oil Corporation (PV-Oil)PetroVietnam Exploration Production Corporation (PVEP)Power Corporations (PCs)Northern Power Corporation (EVNNPC)Central Power Corporation (EVNCPC)Southern Power Corporation (EVNSPC)Ha Noi Power Corporation (EVNHANOI)Ho Chi Minh City Power Corporation (EVNHCMC)Power Generation Corporation (GENCO)National Power Transmission Corporation (NPT)National Load Dispatch Center (NLDC)Electric Power Trading Company (EPTC)Independent Power Producers (IPP)Build-Operate-Transfer (BOT)IPP,BOT
VIETNAMESE LEGISLATIONON RENEWABLE ENERGYThe Government has also issued many mechanisms and policies to encourage thedevelopment of Renewable Energy sources, which have also created conditions forthousands of domestic and foreign investors and enterprises to engage in the market.ON WIND ENERGYDecision No. 37/2011/QD-TTg(issued on 29 June 2011, and effective as of 20 August 2011)Decision No. 39/2018/QD-TTg(issued on 10 September 2018, and effective as of 1 November 2018)Circular No. 02/2019/TT-BCT(issued on 15 January 2019, and effective as of 28 February 2019)ON SOLAR POWERDecision No. 13/2020/QD-TTg(issued on 6 April 2020, and effective as of 22 May 2020)ON SOLID-WASTE POWERDecision No. 31/2014/QD-TTg(issued on 5 May 2014, and effective as of 20 June 2014)Circular No. 32/2015/TT-BCT(issued on 8 October 2015, and effective as of 7 December 2015)ON BIOMASS ENERGYDecision No. 24/2014/QD-TTg(issued on 24 March 2014, and effective as of 10 May 2014)Decision No. 08/2020/QD-TTg(issued on 5 March 2020, and effective as of 25 April 2020)Circular No. 44/2015/TT-BCT(issued on 9 December 2015, and effective as of 25 January 2016)Circular No. 54/2018/TT-BCT(issued on 25 December 2018, and effective as of 18 February 2019)NATIONAL POWER DEVELOPMENT PLANGovernmentassignedrelevantministries tomakeinOctober2019MASTERPLAN VIIIissuedcovering theperiod to 2020in 2011with a vision to 2030MASTERPLAN VIIRenewableEnergyHowever the number of projects and actual capacity to beadded has exceeded the original plan.The period of2021-2030A vision to2045
VIETNAM CURRENT STATUSSOLAR POWER5,000MWhave already put intooperation31,570projects657.88MWovera total capacity ofRooftopsolar powerAccording to data from Vietnam Electricity (EVN),The grid-connectedproject is about4,500MW5,039MW ofsolar power & wind power was generated for the national grid.MEDIUM & LARGEHYDROPOWERabout20,000MWcapacity potentialhave been almostfully utilisedBIOMASS POWERa total technicalpotential of7000MWSMALLHYDROPOWERa totalpotential of6700MW3,000MWmore thanhave already put intooperationSOLID WASTE POWERa total technicalpotential of1,500MW300MWare utilised
RENEWABLE ENERGY PROJECTSSome of the largest projects that have becomeoperational or are under construction:SOLAR POWER PROJECTS:TRUNG NAM - THUAN NAMDAU TIENG PV SOLAR POWERSOLAR FARMLocation: Southern province of TayLocation: Central province of Ninh ThuanCapacity: 450 MWInvestment: 12 trillion dong ( 517.75million)Status: Construction which started inNinhCapacity: 410 MWInvestment: 11 trillion dong ( 474.59million)Status: In operation since June 2019March is scheduled to be completed byOctober.BIM SOLAR FARMPHU MY SOLAR FARMLocation: Central province of Binh DinhCapacity: 330 MWInvestment: 6.2 trillion dong ( 267.51million)Location: Ninh Thuan provinceCapacity: 330 MWInvestment: 7 trillion dong ( 302.01million)Status: In operation since April 2019Status: Under construction. Scheduledfor completion by end-2020SAO MAI SOLAR FARMLocation: Southern province of An GiangHOA HOI SOLAR FARMCapacity: 210 MWInvestment: 6 trillion dong ( 258.88Location: Central province of Phu Yenmillion)Capacity: 257 MWStatus: The first phase of 104 MWInvestment: 4.99 trillion dong ( 215.29started power generation in July 2019.million)Construction of the second 106 MWStatus: In operation since June 2019phase began in September.
RENEWABLE ENERGY PROJECTSWIND POWER PROJECTS:TRUNG NAM WIND FARMQUOC VINH SOC TRANG WIND(ONSHORE)FARM (ONSHORE)Location: Ninh Thuan provinceLocation: Southern province of Soc TrangCapacity: 151.95 MWCapacity: 129 MWInvestment: 4 trillion dong ( 172.58Investment: 5.32 trillion dong ( 229.54million)million)Status: Construction started in AugustStatus: Construction of the plant began in2016 and is scheduled to be completedMarch. Its first phase of 30 MW is scheduledby the fourth quarter this year.to start power generation in 2021.HOA BINH WIND FARMBAC LIEU WIND FARM(OFFSHORE)(OFFSHORE)Location: Southern province of Bac LieuLocation: Bac Lieu provinceCapacity: 100 MWCapacity: 99.2 MWInvestment: 5.22 trillion dong ( 225.22Investment: 5 trillion dong ( 215.73million)million)Status: Construction started in July andStatus: The first phase of the projectscheduled to be completed by Novemberstarted power generation in 2013 and the2021.entire project from 2016.HIEP THANH WIND FARM (ONSHORE)Location: Southern province of Tra VinhCapacity: 78 MWInvestment: 3.37 trillion dong ( 145.40 million)Status: Construction started in March. Its firstturbine will start power generation early 2021 and theentire project by mid-2021.
FOREIGN INVESTMENTThe Vietnamese Renewable Energy industry is appealing toforeign investors as demand for electricity is high.Moreover, Vietnam has adopted flexible policies forRenewable Energy in recent years, particularly paying attentionto the solar and wind energy projects in the country.FOREIGN INVESTMENT FORMNOApplicationFormForeign investors can ownUP TO 100% of equity in powerprojectsForeign investors can trade in different types:BOT (Build-Operate-Transfer)Public-Private Partnership100% Foreign Invested CompanyJoint VenturesPOWER PURCHASING AGREEMENTThe Power Purchasing Agreement (PPA) is UNBANKABLEdue to following reasons:20Fixed termsNon negotiableFixed FiTfor 20 YEARSCANNOT take landassets as securitiesNo internationalarbitrationNo stabilizationclauseRisk of connectingthe plant to gridCredit worthiness ofOfftaker
FOREIGN INVESTMENTPROJECT INVESTMENTPROCESSPre-Investment StageConduct sitestudyGather date andmeasurementsPrepare prefeasibility studyApply for inconclusion ofthe project in the PPA (if ithas not been included)**usually projects over 50MW must be approved by the Prime Minister and those under that threshold by theMOITInvestment and Enterprise RegistrationObtain investment decision Investment Registration Establish project companyMake deposit(normally from provincialCertificate issued forby obtaining Enterprise (from 1% to 3% of project’sPeople’s Committee)projectRegistration Certificate required capital investmet)Sign Relevant AgreementsEVN’s agreement in principle to purchase powerGrid connection agreementMetering agreementSCADA/EMS (or SCADA/DMS) agreementProtective relay agreementPower Purchase Agreement with EVNLand LeaseNegotiate andobtain policyagreement forproject locationLand clearance(and rellocation of/compensation for existingland users) are undertakenSign land lease agreement –the lease term cannot exceedthe project term and is likelyto be around 20 yearsObtain Land UseRight CertificateConstructionPrepare feasibilitystudy and designsEvaluate basicdesign/ feasibilitystudyEvaluate technicaldesignObtain fire preventionand firefighting approvalConduct environmentalimpact assessmentObtain constructionpermitCarry outconstructionworksUndertakecommissioning& acceptanceOperationObtain electricity generationlicence (for the power plant)Obtain operating licence (for employeesholding certain operating positions)
FOREIGN INVESTMENTFEED-IN TARIFF RATESFEED-INTARIFF20-yearfixed FiTone of the lowestin the world7.69 US cents/kWhSOLARPOWERfor floating solar energy projects7.09 US cents/kWhfor ground-mounted solar energy projects8.38 US cents/kWhfor rooftop solar energy projectsWINDPOWER(COD* beforeNovember 1, 2021)SMALLHYDROPOWERBIOMASS9.8 US cents/kWhfor OFFSHORE wind projects8.5 US cents/kWhfor ONSHORE wind projects5 US cents/kWhfor subject to avoid costs regime7.03 US cents/kWhfor combined heat and power8.47 US cents/kWhavoided cost tariff for other technologiesSOLIDDOMESTICWASTE10.05 US cents/kWhfor waste incineration7.28 US cents/kWhfor combustion of landfill gas*COD: Commercial Operation DateThe Prime Minister issued Decision No.13 to replaceDecision No.11, which details the new FiT tariffs (as can beseen they are significantly lower than those under DecisionNo.11)Due to the Covid-19 pandemic, to reach COD by the end of2020 for FiT eligibility, developers may need to quicken theproject timelines to meet the deadline.
GOVERNMENT INCENTIVESFour key proclamations this year provideguidance on the role Renewable Energycould play in meeting demand growth:MOIT ReportNo.2491- On 9 April 2020The MOIT issued Report No.2491/BCT-DL with proposals tothe Prime Minister for extensionof application period of FITs forwind power projects until 31December 2023.Resolution No.55- On 11 February 2020The orientation of Vietnam’sNational Energy DevelopmentStrategy to 2030 with a visiontoward 2045.Decision No.13MOIT Report No.1931- On 19 March 2020The Ministry of Industry and Trade(“MOIT”) issued Report No. 1931/BCTDL with proposals to the Prime Ministerfor the development of wind powersources.- On 6 April 2020The Prime Minister issued Decision No.13/2020/QD-TTg on encouragementmechanisms for the development ofsolar power in Vietnam, effective from22 May 2020. (introduces a number ofnew incentives and mechanisms forinvestors in solar power projects inVietnam)
CHALLENGESLow tariffs coupledwith high investmentcosts in newertechnologiesWeak gridcapacityUn-bankable powerpurchasing agreements(PPA) termsLack ofcapital/fundingDelays in larger projectsdue to the complexregulatory frameworkLack of qualifiedhuman resourcesLack of clarityin futureenergy prices.Underdevelopedsupporting industries
REFERENCES[1] The World Bank in Vietnam (n.d.) (Updated on Oct 6, 2020) The World verview[2] Asian Development Bank (December, 2015): Vietnam Energy Sector ocument/178616/vie-energyroad-map.pdf[3] Forbes Vietnam: VCEA (September 20, 2020): Lĩnh vực năng lượng tái tạo sẽ oi-dong-thoi-gian-toi-9203.html[4] The Law Reviews (August, 2020): The Renewable Energy Law Review – Edition -energy-law-review-edition3/1229911/vietnam[5] Vietnam Briefing (November 12, 2020): Renewables in Vietnam: CurrentOpportunities and Future Outlook (November 12, 2020) -for-renewable-energy.html[6] Tilleke & Gibbins (April 10, 2020): New Incentives for Solar Power Projects entives-solar-power-projectsvietnam[7] Ministry of Industry and Trade of Tuyen Quang Province (September 09, 2019):Potential and Challenges for renewable energy development in 1!-110.html[8] Vietnamnet Global (November 29, 2020): Vietnam’s renewables: Advantages andconsiderations bles-advantagesand-considerations-693393.html[9] Ministry of Industry and Trade of the Socialist Republic of Vietnam (MOIT) (July 09,2020): Phát triển bền vững nguồn Năng lượng tái tạo nối lưới và Điện mặt trời mái 1.html[10] Electricity and Renewable Energy Authority in Vietnam under the Ministry ofIndustry and Trade EREA (MOIT) together with the Danish Energy Agency (November,2019): Báo cáo triển vọng năng lượng Việt Nam 2019 (EOR2019)[11] EastAsiaForum (May 13, 2020): The renewable energy transition is coming to Asia(May 13, 2020) able-energytransition-is-coming-to-asia/[12] Allens Linklaters: Renewables in Vietnam, Opportunities for Investment
Vietnam aims to support and develop Vietnam-UK business links while raising the profile of Vietnam in the British business community and vice versa. As an accredited British Chamber, BritCham Vietnam in association with the Department for International Trade (DIT), is committed to promote strong business links between Vietnam and the UK.
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renewable resources (renewable energy) and sets the FiT rate. The DLs will pay for renewable energy supplied to the electricity grid for a specific duration. By guaranteeing access to the grid and setting a favourable price per unit of renewable energy, the FiT mechanism would ensure that renewable energy becomes a viable and sound long-term
4.0 Renewable Energy Market 4.1 Policy Framework for renewable energy 4.1.1 Policies and Strategies for Renewable Energy Promotion 4.1.2 Main actors 4.1.3 Regulatory Framework 4.1.4 Licensing Procedures for Renewable Energy 4.1.5 Feed-in-Tariff 4.2 Business Opportunities and Potentials of Renewable Energy Sources 4.2.1 Bioenergy 4.2.2 Solar energy
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renewable energy sources. The Government has set a very ambitious target of adding 175 GW of renewable energy by 20226. While this is a recent policy announcement, it would be pertinent to highlight the progress of renewable energy sources over the last two decades. The following graph depicts the journey of renewable energy
NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC. Renewable Energy Certificate (REC) Tracking Systems: Costs & Verification Issues . Jenny Heeter, Renewable Energy Analyst . National Renewable Energy Laboratory . October 11, 2013
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