Vietnam is considered a trailblazer in the renewable energy industry in Southeast Asia. While most of the region is still highly reliant on fossil fuels for energy supply, renewable energy investments in Vietnam have proven that it is viable and sustainable to begin major transitions to green energy sources sooner than later.
According to The Economist, the share of solar energy in the country’s electricity supply rose to 11% in 2021 from nearly zero in 2017, making Vietnam the tenth biggest solar power producer in the world. This increase rate beats larger economies with renewable energy policy programs like Japan and France.
Vietnam's prime minister, Phan Minh Chinh, has committed to stopping the construction of new coal-powered plants in the country. He also set an ambitious goal of net-zero emissions in the country by 2050. What is the future of energy in Vietnam, and how can renewable energy investments in the country inspire others in the Southeast Asian region?
The Power Development Plan 8 (PDP8) for the 2021 to 2030 period sets new targets for renewable energy in Vietnam. Through this period, the country should prioritize the development of wind power and self-sufficient solar power for loads for on-site consumption. It also focuses on the production of new forms of renewable energy from hydrogen and green ammonia, among other sources.
From the current capacity of 17 GW from 2020 to 2025, solar power generation should increase from 19-20 GW by 2030, accounting for 17% of the total installed capacity in 2025 and 14% in 2030. From 600 MW in 2020, power will be developed to 11 to 12 GW by 2025 and 18-19 GW by 2023. This will account for 12% of the total installed capacity in 2025 and 13% in 2030.
Coal-fired power is expected to be significantly reduced in the years ahead. From 34% total power capacity in 2020, it should be down to 27% by 2030. Throughout this period, there will be no additional developments of coal-fired thermal power plants, except for the ones already under construction.
Currently, the outlook for renewable energy in Vietnam in 2022 presents many potential ventures for partnerships and expansions. There are many opportunities for players in the renewables industry to invest in the future of energy in Vietnam. As the country gears towards developing more wind power projects, as well as venturing out to other natural renewable sources, businesses can establish ways to make these energy sources more accessible and affordable for the people.
Making sure that renewable energy investments in Vietnam are reliable enough to sustain its largest industry, manufacturing, is also key to ensuring its sustainability. To be able to attract more foreign direct investments in manufacturing, power supply to production plants must remain stable to ensure factory operations are uninterrupted.
Lastly, there is still an opportunity for coal-fired power plants that use cleaner technology to increase their generation capacity beyond 2030. This might be counterproductive, given all the strides taken to transition to renewable sources, and the time and resources it will require to convert the coal-fired power stations. It's best for providers to ensure that renewable sources will expand to avoid the increased dependence on coal-fired power plants once more.