South Korean investors eye renewable energy sector in Vietnam
According to Nguyen Van Vy, deputy chairman of the Vietnam Energy Association (VEA), Vietnam set the target to increase renewable power to 32 per cent of the total energy mix by 2030 and 43 per cent by 2050. At present, Vietnam has 50 wind power and over 100 solar power projects as well as a good number of renewable power projects being studied for development. Meanwhile, according to the revised power development master planning for 2011-2020 with vision to 2030, Vietnam will accelerate power generation from renewable sources to serve the expansion of the manufacturing sector, while simultaneously scaling down hydropower. To achieve these targets, the Vietnamese government has offered preferential loans, reduced export-import and corporate income tax, waived land use fees, and funded scientific research on energy. Vietnam will also extend international collaboration to develop domestic electrical equipment manufacturing. Besides, Vietnam increased participation (both by organising and by joining) international co-operation activities and increased technology transfer to facilitate the domestic manufacturing of power equipment. “South Korea is considered a pioneer in developing smart power grid and renewable energy. With Vietnam’s recent incentive policies, South Korean investors will have more favourable conditions to accelerate investments in these areas,” Vy stated.
Indian firms strengthen renewable energy investment in Vietnam
The two-day state-level visit of President Tran Dai Quang and his wife to India on March 3-4 will bring a new Indian investment wave, this time focusing on renewable energy, infrastructure, education, and information technology. Indian giants, including TATA Group, Adani Green Energy Ltd., and Suzlon Energy Ltd. set foot in Vietnam very early after the country opened its doors for foreign investment. TATA Group's solar power project in Binh Phuoc province is the latest Indian investment project. Its total capacity is 49 megawatts and is located on 55 hectares in Loc Ninh district of the southern province. Shenbagam Manthiram, chief representative of TATA Group, said that Binh Phuoc has ample sun irradiation. Besides, Loc Tan commune is well connected to transport infrastructure and the national grid as well. This project is expected to be completed in June 2019 to take advantage of the preferential feed-in-tariff from the government (9.35 cent/kWh for 20 years).Earlier, in 2013, the Indian company also poured $1.8 billion into the 1,200MW Long Phu 2 thermal power plant in the Mekong Delta province of Soc Trang. This is one of three power plants at Long Phu Power Center. Putting Long Phu 2 into operation is a significant milestone in promoting investment between Vietnam and India. To date, India has 176 projects in Vietnam with the total investment of $814 million, ranking 28th among the nations and territories investing in the country.
To attract investment in the renewable energy sector, the Ministry of Industry and Trade has confirmed that a mechanism to allow businesses to buy power at competitive prices from renewable energy generators will be piloted in 2018.
The mechanism will enable businesses in Vietnam to enter into contracts directly with renewable energy generators. Speaking at the annual Vietnam Business Forum (VBF) last week, Deputy Minister of Industry and Trade Do Thang Hai said that the pilot will be implemented in the fourth quarter of 2018 at the latest. The Ministry of Industry and Trade (MoIT) had previously confirmed that it was prioritising the study of direct power purchase agreements (DPPAs), and that the Electricity Regulatory Authority (ERA) has been assigned to work with the United States Agency for International Development (USAID) to implement a technical assistance programme on DPPAs. The MoIT asked the consultants to define clear milestones and provide a detailed schedule of DPPA implementation for the review and approval of the ministry and government. “In terms of capacity, it has been agreed that the pilot should be 300 megawatts (MW),” Hai said. The MoIT is currently working with General Electric (GE) on a 1,000MW wind project and has a power purchase agreement (PPA) in place with GE for a 200MW wind power project. “Vietnam has just implemented a wind power project with operational capacity of 160MW, and aims to add 70 more megawatts. The new increased tariff is expected to attract more foreign investment in wind power plants in Vietnam,” said Thuc.