Vietnam, a rapidly growing economy in Southeast Asia, is facing the need for clearer regulation and policy to support its clean energy boom, according to a report published by a local business group. The report highlights the importance of sustainable energy in sustaining Vietnam’s manufacturing ambitions, as the country has become increasingly vital to the global supply chain.
While Vietnam has attracted investments from major electronics manufacturers like Apple Inc., the surge in manufacturing is straining the power sector and increasing the demand for low-carbon energy. The report, titled “Made in Vietnam Energy Plan 3.0,” emphasizes the lack of clarity on policy and pricing as a major obstacle to energy investments. This uncertainty undermines investor confidence and slows down the progress of negotiations for measures that could accelerate the transition towards clean energy.
The report suggests that a dedicated legal framework for renewable energy is essential to attract investments in the sector. It also calls for power purchase agreements to meet international standards to increase the bankability of renewable energy projects. Furthermore, the report highlights concerns about curtailment risk, which refers to the reduction of power generation from renewable sources due to operational or grid limitations. This risk has led to disruptions in solar projects and difficulties in repaying loans to banks.
To address the challenges in the power sector, the report recommends that Vietnam’s government guarantee power purchase agreements between investors and Vietnam Electricity Group, the state monopoly. The report also mentions the need for stronger support from the Just Energy Transition Partnership (JETP) to secure funding for renewable energy projects.
The recent power blackouts in Northern Vietnam have further highlighted the urgency of the situation. The Vietnam Electricity Group has warned that the country is at risk of future outages, particularly during the summer months. These power shortages have prompted officials to implement measures such as requesting factories to operate during off-hours to reserve power for households at night.
In conclusion, Vietnam’s clean energy boom holds great potential for the country’s economic growth and sustainable development. However, clearer regulation, policy support, and stronger investments are necessary to overcome the current challenges and ensure a smooth transition to a greener and more reliable energy system.
Q: What is the main obstacle to energy investments in Vietnam, according to the report?
A: The report states that the absence of a dedicated legal framework for renewable energy in Vietnam is a major obstacle to energy investments.
Q: What percentage of Vietnam’s electricity is expected to come from renewable sources by 2030, according to the government’s power development roadmap?
A: The government’s power development roadmap forecasts that 39% of Vietnam’s electricity will come from renewable sources by 2030.
Q: What is curtailment risk, as mentioned in the report?
A: Curtailment risk refers to the reduction of power generation from renewable sources due to operational or grid limitations.
Q: What measures have been taken in response to recent power blackouts in Northern Vietnam?
A: In response to recent power blackouts, officials have requested some factories to operate during off-hours to reserve power for households at night.