Solar in Vietnam

Vietnam faces a significant power crunch because demand is growing in the double digits for energy every year. The government has invested and allowed investments in every type of power source, from coal to oil and natural gas to wind and solar. Hydro is also a big component of power supplied in the country.

McKinsey, in this report, says that the country could need USD150bn in investments in energy. There is some investment in solar and renewables (Electricity of Vietnam plans for 45 gigawatts of coal power and 18 gigawatts of renewables by 2020.

So I was interested to read this article about solar in Vietnam.

The latest data shows that a total of 332 solar projects have been registered with the total capacity of 26,290 megawatt peak (MWp), including 121 projects (7,234MWp total capacity) that will begin to generate electricity by 2020 and 211 (13,069MWp) awaiting approval. These figures have far exceeded the targets of the revised Power Development Plan VII. Additionally, more than 800 small-scale rooftop solar power projects with a combined capacity of nearly 11.6MW have been developed.

A good amount of this is driven by strong feed-in tariffs (9.35 UScents for solar) that should allow solid profits for investors. In the Middle East, developers have agreed to sell solar for as low 2.34 US cents per kilowatt-hour. Of course, it appears there are some subsidies and the Middle East likely has a bit better environment for solar (no rain, mostly sunny skies - having living in the UAE, I can tell you that every day is pretty much like the day before). But still, there is a lot of room for investment, especially as solar prices fall as predicted.

Based on people that I’ve talked to, there are some issues with high capital costs in Vietnam, and some fears over exchange rates and what happens over the arrangements with the national grid. Plus the feed-in tariff is in effect only for projects that start commercial operations by end of 2020. After that, we might see some negative changes

So there are risks, but I would love to see a even quicker take up of renewables. In 2017, Vietnam ranked as the 47th largest economy but the 27th largest emitter of greenhouse gases, so there is a real need.

What I would like to see if something like SolShare is doing in Bangladesh: building a residential power grid that takes advantage of solar panels on houses. There has already been at least some demand for residential solar panels, and if that continued, it would make sense to put together a peer-to-peer grid like is being done in Bangladesh.

There is going to be enormous investments in power generation in Vietnam over the next 20 years. I can’t see a world where things like solar and wind aren’t cheaper than they are today, and in the case of solar, really much cheaper. Even in the US, it is now cheaper to build a wind farm than to run an existing coal plant. I really hope that the country chooses to go the route of renewables, otherwise it is really going to be stuck with plants that are bad for the environment and are expensive.

*Update: I accidentally dated this post Feb. 15, 2019, but it was actually written and posted Feb. 19.