By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
NetZero.VN - Net Zero Viet NamNetZero.VN - Net Zero Viet Nam
  • English
    • Tiếng Việt
  • Home
  • News / Events
    • Events
  • Opinion
  • Projects
  • Forums
  • Topics
    • Agriculture – Forestry
    • Construction & Transport
    • Education & Communication
    • Energy
    • Finance
    • Industry
    • Policies
    • Resources & Environment
    • Science & Technology
  • Multimedia
    • Podcast
    • Videos
    MultimediaShow More
    Vietnam takes steps towards net zero emissions
    Vietnam News Agency 23/09/2023
    Vietnam needs 400 billion USD for climate change response
    Vietnam News Agency 04/09/2023
    Committing to a world without waste
    The Saigon Times 30/07/2023
    Greening ASEAN and Global Value Chains
    NetZero.VN 15/04/2023
    Charting a Path for Vietnam to Achieve Its Net-zero Goals
    NetZero.VN 18/11/2022
  • Resources
    • Legal documents
    • Presentations
    • Publications
    • Reports
Notification Show More
Latest News
VN initiates anti-dumping investigation wind towers imported from China
Energy News
SkyX Solar steers sustainable shifts with green IZ and certification in Vietnam
Energy Opinion
Vietnam’s first voluntary carbon exchange launched
Events Finance Resources & Environment
Eco-friendly materials to become popular trend in construction sector
Construction & Transport Events
Việt Nam to host green growth, global goals partnership summit in 2025
News Resources & Environment
Aa
NetZero.VN - Net Zero Viet NamNetZero.VN - Net Zero Viet Nam
Aa
  • English
    • Tiếng Việt
  • Home
  • News / Events
    • Events
  • Opinion
  • Projects
  • Forums
  • Topics
    • Agriculture – Forestry
    • Construction & Transport
    • Education & Communication
    • Energy
    • Finance
    • Industry
    • Policies
    • Resources & Environment
    • Science & Technology
  • Multimedia
    • Podcast
    • Videos
  • Resources
    • Legal documents
    • Presentations
    • Publications
    • Reports
Follow US
NetZero.VN - Net Zero Viet Nam > Topics > Energy > Renewable energy investment challenges in Vietnam: risks and delays
EnergyNewsPolicies

Renewable energy investment challenges in Vietnam: risks and delays

Minister of Industry and Trade Nguyen Hong Dien has noted that many investors have neglected procedures and violated regulations in their rush to meet the Feed-in-Tariff deadline.

Vietnam Investment Review 06/06/2023
SHARE

Vietnam’s renewable energy sector is facing significant challenges, leading to concerns among investors and potential risks of bankruptcy. The director of the Legislative Institute, Nguyen Van Hien, highlights the abrupt shifts in renewable energy investment policies as a major contributing factor to these issues.

The consequences include delayed commercial operations, missed opportunities to benefit from favourable feed-in tariff (FiT) rates, and substantial wastage of untapped wind and solar power. Hien warns that this situation could have long-term implications for the investment climate and hinder the inflow of funds into renewable energy projects.

According to Hien, over 4,600 MW of renewable energy from various projects remains unexploited due to the delayed implementation of FiT rates. Meanwhile, Vietnam faces a power shortage and is forced to rely on electricity imports from other countries.

Acknowledging the inefficiency resulting from under-utilised investment projects, Minister of Industry and Trade Nguyen Hong Dien said that most investors rushed to meet the FiT deadline, neglecting procedures and violating the legal framework. Dien emphasises the need for authorities, investors, and ministries at all levels to collaborate in resolving these issues.

According to local media, the MoIT reveals that many renewable energy project investors violated legal regulations concerning planning, land, and construction investment, resulting in their failure to fulfill legal procedures.

Despite being required to supplement their documentation since late March, these investors have been unable to do so even after two months, preventing them from negotiating prices with Vietnam Electricity (EVN), the state-owned power company.

Furthermore, many investors have not completed the necessary legal documentation to obtain electricity operation permits for their projects. These permits, as per the Electricity Law, are crucial for ensuring the effective utilisation of power projects. The delay in preparing and submitting documents to the relevant authorities has contributed to the overall sluggishness in the sector.

The MoIT also highlights the challenges posed by the instability of wind and solar power, primarily concentrated in the Central region with low-power demand. Developing these renewable energy sources requires substantial investments in transmission lines and storage systems. Moreover, a stable power source capable of continuous generation is necessary to compensate for the intermittent nature of wind and solar power.

Vietnam heavily relies on hydropower, coal, oil, gas, and biomass, while many countries have incorporated nuclear power as a reliable energy source. Despite the higher costs and increased carbon emissions associated with conventional energy sources, Vietnam continues to utilise them to ensure the reliability of its power system.

Minister Dien said that the validity period of FiT rates was explicitly stated in the Prime Minister’s decision and should not be abruptly terminated. Projects that fail to commence commercial operations before the deadline cannot benefit from FiT rates and must negotiate prices to share risks and align the interests of the state, businesses, and the public.

Dien emphasised that the cost of renewable energy depends on equipment, technology, and an average annual price reduction of 6-8 per cent. He believes that renewable energy can be the most cost-effective source of electricity, excluding transmission and storage costs.

The pricing framework for electricity issued by the MoIT is based on the Electricity Law, the Price Law, and extensive consultations with international organisations, as well as statistical data from existing solar and wind power plants.

In Vietnam, the preferential pricing framework implemented in 2020 (FiT 2) reduced prices by 8 per cent compared to the 2017 preferential rates (FiT 1), with a further decrease of approximately 7.3 per cent compared to FiT 2.

Currently, it is estimated that 85 renewable energy plants with a total capacity of over 4,730 MW do not meet the requirements to benefit from FiT rates. By the end of May 2023, 59 of these plants, with a capacity of 3,389 MW, have submitted documents to EVN.

Among them, 50 projects have proposed temporary prices equal to half of the pricing framework, ranging from VND 754-908 per kilowatt-hour (excluding VAT), depending on the type of solar or wind energy.

However, several projects are not willing to negotiate within the ministry’s pricing framework due to incomplete legal procedures and transmission difficulties.

As of May 31, updated data from EVN reveals that nine transitional renewable energy projects have submitted documents for Commercial Operation Date certification, a prerequisite for grid connection. Seven of these projects, with a total capacity of over 430 MW, have already started generating electricity, effectively doubling the operational capacity within two days.

The MoIT has approved provisional prices for an additional 40 projects, highlighting efforts to address the challenges faced by the renewable energy sector in Vietnam.

Nhat Minh

TAGGED: FiT rates, renewable energy
SOURCES: Vietnam Investment Review
Vietnam Investment Review 06/06/2023
Previous Article Australia and Vietnam powering on together with clean energy transition
Next Article Vietnam proposes solutions to implement the joint declaration of the G7 Summit on environmental protection
Read more
Ocean Dialogue dicusses offshore renewable energy potential

The event, entitled “Offshore Renewable Energy: Opportunities and Challenges to Green Transition”,…

Singapore firm Athein eyes $1bn fundraising for Vietnam, 3 others

Athein was established recently as a joint venture partnership among ATAD Steel…

Garment sector must go green to ensure sustainable development

Pressure of digital transformation According to Nguyen Phuoc Hung, Vice President of…

Plan approved to realise net-zero emissions goal by 2050

The Ministry of Natural Resources and Environment has issued a plan on…

14 associations propose to change recycling cost norms

In a document sent to the Ministry of Natural Resources and Environment,…

More

EnergyNews

VN initiates anti-dumping investigation wind towers imported from China

Vietnam News Agency 01/10/2023
EnergyOpinion

SkyX Solar steers sustainable shifts with green IZ and certification in Vietnam

Vietnam Investment Review 30/09/2023
NewsResources & Environment

Việt Nam to host green growth, global goals partnership summit in 2025

Vietnam News Agency 27/09/2023
OpinionPolicies

Electricity prices must reflect production costs for green transition

Vietnam Investment Review 26/09/2023
Facebook Instagram Linkedin Twitter Youtube
NETZERO.VN
  • About us
  • Our team
  • Strategic Partners
  • Contact
Infomation
  • Forums
  • Multimedia
  • Recruitment

Sign up for free

Subscribe to our newsletter

Join the community

Removed from reading list

Undo
Welcome Back!

Sign in to your account

Lost your password?