Cost of renewables in Vietnam

/

I saw this article a few days ago about two new power plants using solar and wind. There are two plants.

  • The first is actually a cluster of three solar plants in the south central province of Ninh Thuan. Total yield is 600 million kWh per year, serving 200,000 households. It cost VND7 trillion ($301.3m)

  • The second is in Thuan Bac and is both a solar and wind power plant. Yield is expected to be 423 million kWh of solar and 577 million kWh of wind, for a total of 1bn kWh. It cost VND10 trillion.

Combined, the total cost was about $740m for an annual yield of 1.6 billion kWh. Now if we make a few small assumptions*, this turns out to be something like $0.04 per kWh, which is extremely good, and much cheaper than current energy costs.

Of course, there is a lot of upfront cost to these, and I can see why the government may not be interested in fronting these. Also, it is unclear from the article if this is all in costs (like land or whatever else might be needed).

If you look at Vietnam Electricity (EVN), they are investing in renewables, but only a bit. In the 2017 annual report, which actually covers 2016 (despite being published in 2018), about 80% of their future plants are thermal (most likely meaning coal) and combine cycle gas turbine power plants (CCGT) utilizing natural gas. There are some solar and hydropower, but not that much at just 20%. So out of a total of 13,000 MW, just 2,500 MW are renewables.

SOURCE: VIETNAM ELECTRICITY 2017 ANNUAL REPORT

SOURCE: VIETNAM ELECTRICITY 2017 ANNUAL REPORT

While it seems like the economics of solar/wind are attractive according to my numbers (unless my numbers are incorrect, and they could be!), Vietnam Electricity is not putting real dollars into this type electricity generation. [Just to be frank, it was not totally clear who is responsible for building these future plants - just EVN or a public-private partnership.] This feels to me like a missed opportunity.

* Note: I assumed a life of 18 years, maintenance cost of 2% of the original cost, and declining yield of the plants of 1.75% a year (yield falls to 75% of capacity in year 18).