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Vietnam's Renewable Energy Potential

General Report October 30, 2024
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TABLE OF CONTENTS

  1. Summary
  2. Current Energy Demand and Capacity
  3. Renewable Energy Resources and Potential
  4. Government Policies and Regulatory Framework
  5. Development of Wind Power
  6. Hydropower Capacity and Its Role
  7. Conclusion

1. Summary

  • Vietnam is rapidly advancing towards a sustainable energy landscape, capitalizing on its significant natural resources and strategic government policies. The report provides an overview of Vietnam's booming renewable energy sector, focusing on solar, wind, biomass, and hydropower, driven by increasing electricity demands projected to grow by 8% annually. Notably, Vietnam's wind power capacity has expanded tenfold since 2020, reaching over 7 GW by November 2023, largely facilitated by the geographical advantage of a 3,200 km coastline and strong governmental support. Additionally, hydropower remains a pivotal component, with major installations like the Son La Hydroelectric Plant contributing over 23 GW, approximately 40% of the nation's total power capacity. Vietnam's positioning as the second highest in installed power capacity among ASEAN countries is underlined by recent legislative revisions promoting renewable energy investments, solidifying its path to sustainable energy solutions.

2. Current Energy Demand and Capacity

  • 2-1. Vietnam's electricity demand growth and projections

  • Vietnam's energy demand is forecasted to increase by 8% by 2023 due to the rapid development of its industrial base. This trend necessitates the search for new energy sources to meet the escalating requirements. As of 2021, Vietnam's energy requirements were estimated at about 60GW, which is projected to rise to 97GW by 2025. This indicates a significant capacity growth of approximately 6-7GW per year to satisfy local demand.

  • 2-2. Installed power capacity and its comparison with ASEAN countries

  • Vietnam's current installed power capacity accounts for 24.1% of the total power generation capacity among ASEAN member countries, placing it second after Indonesia, which has 24.9%. This positioning reflects Vietnam's ongoing efforts to enhance its energy capacity as it transitions towards renewable sources and away from conventional power generation methods.

3. Renewable Energy Resources and Potential

  • 3-1. Overview of Vietnam's renewable energy sources: solar, wind, biomass, and hydropower

  • Vietnam's renewable energy landscape has shown significant potential with a variety of sources including solar, wind, biomass, and hydropower. The country enjoys an average of 4 to 5 kilowatt-hours of solar energy per square meter, which presents a substantial opportunity for solar power development. With approximately 3,000 kilometers of coastline featuring consistent wind speeds ranging from 5.5 to 7.3 meters per second, wind power is becoming an increasingly important part of Vietnam's renewable energy portfolio. As of November 2023, the country has made substantial strides in wind power, reaching over 7 gigawatts of total installed capacity, representing a tenfold increase since 2020. Hydropower also plays a crucial role, contributing more than 23 gigawatts to the national grid, which accounts for over 40% of the country's total power capacity. Notable hydropower projects include the Hoa Binh, Son La, Lai Chau, and Yaly plants, which not only provide clean energy but also help in flood and drought management.

  • 3-2. Geographical advantages for renewable energy development

  • Vietnam's geographical attributes lend themselves ideally to renewable energy development. The extensive coastline not only supports the generation of wind power but also presents opportunities for offshore wind projects. The naturally steep mountainous terrain and numerous rivers and streams in the interior regions facilitate the development of hydropower. This landscape is coupled with a climate that allows for sustained solar energy harvesting. The government's favorable policies and the rising demand for clean energy further augment these geographical advantages, positioning Vietnam as a promising leader in renewable energy development in Southeast Asia.

4. Government Policies and Regulatory Framework

  • 4-1. Recent revisions to laws promoting renewable energy usage

  • The Vietnamese government (GVN) has made recent revisions to several laws to promote renewable energy usage. This includes the revision of the Law on Electricity and the Law on Economical and Efficient Use of Energy. These changes are designed to attract the public to utilize renewable energy sources, indicating a governmental shift towards supporting sustainable energy practices.

  • 4-2. Investment incentives and preferential policies for clean energy

  • Vietnam is actively incentivizing investment in clean energy through various preferential policies. These policies are tailored to encourage both local and foreign investments in the renewable energy sector, enhancing the overall capacity and infrastructure required to meet the nation's increasing energy demands.

5. Development of Wind Power

  • 5-1. Current state and growth of wind power capacity

  • As of November 2023, Vietnam’s total installed wind power capacity has surpassed 7 GW, marking a ten-fold increase from the year 2020. This rapid growth underscores the significant opportunities presented by the increasing demand for electricity in the country and the supportive policies established by the government to attract investment in the renewable energy sector. The geographical advantages, including a coastline exceeding 3,200 km and coastal areas characterized by high wind speeds, have further contributed to the potential for wind power development in Vietnam.

  • 5-2. Major wind power projects and their significance

  • Several major wind power projects are currently being implemented in Vietnam, each highlighting the importance of expanding the country’s renewable energy capabilities. Notable projects include: the La Gan offshore wind power project with a capacity of 4 GW, the Mui Dinh offshore wind power project with a capacity of 3.5 GW, and the Thang Long offshore wind power project with a capacity of 2 GW. These projects not only signify the strong developments within Vietnam's wind power industry but also reflect the nation’s strategic shift towards cleaner energy sources to meet its electricity demands.

6. Hydropower Capacity and Its Role

  • 6-1. Overview of hydropower installations and capacity

  • As of November 2023, Vietnam's total hydropower installation capacity reached more than 23 GW, which accounts for over 40% of the country's total power capacity. Significant hydropower plants include the Hoa Binh, Son La, Lai Chau, and Yaly facilities. The steep mountainous terrain, numerous rivers and streams, and abundant rainfall in the country contribute to favorable conditions for hydropower development.

  • 6-2. Impact of hydropower projects on energy regulation and tourism

  • Hydroelectric projects in Vietnam are significant not only as sources of clean energy but also for their role in regulating drought and floods in the region. Moreover, these projects promote tourism development, particularly in areas surrounding large power plants, such as the Son La hydroelectric plant, which is recognized as the largest hydropower facility in Southeast Asia. This dual impact enhances both energy security and economic opportunities through tourism.

Conclusion

  • Vietnam stands on the brink of a renewable energy revolution, propelled by immense natural resources and proactive governmental strategies, as highlighted in the report. Significant advancements in wind and hydropower, such as the massive output from the Son La Hydroelectric Plant, showcase Vietnam's commitment to clean energy and flooding and drought regulation benefits. However, challenges persist, necessitating continuous investment and policy enhancements by key players like Electricity of Vietnam (EVN), which is pivotal in the country's energy transition efforts. To fully realize its potential, Vietnam must address infrastructure and investment gaps. Looking forward, the sustained emphasis on renewable development could bolster economic growth and establish Vietnam as a leader in Southeast Asia's green energy sector, but only if paired with strategic policy frameworks and robust international partnerships.

Glossary

  • Electricity of Vietnam (EVN) [Company]: Electricity of Vietnam (EVN) is the state-owned enterprise responsible for power generation, distribution, and transmission in Vietnam. It plays a crucial role in the planning and execution of the country's energy strategy, particularly in transitioning towards renewable energy sources amidst rising electricity demand.
  • Son La Hydroelectric Plant [Infrastructure]: Son La Hydroelectric Plant is the largest hydroelectric power plant in Southeast Asia, located in Vietnam. It contributes significantly to the country’s renewable energy capacity, providing clean energy while also aiding in flood control and drought regulation.

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