Geographic position makes Vietnam a renewable power hub
High solar irradiance and wind flow velocity are factors making Vietnam`s renewable energy advantages.
Vietnam is likely to become a renewable power hub in the time to come thanks to a series of conditions, mostly geographic ones namely a long coastline, tropical climate, and strong solar irradiance.
Such diverse and abundant conditions enable the country to utilize the exploitation and production of wind power, solar power, and bio-fuels, according to JLL.
Indeed, Vietnam’s geographical characteristics suitable for the production of many renewable energy types together with the government’s strong support for investors will enable the country to make full use of the potential, said Country Head of JLL Vietnam Stephen Wyatt.
With favorable initiatives, the sector will become a magnet for investment, Stephen emphasized.
For solar power energy, localities having great potential of solar power include the central provinces of Ninh Thuan and Binh Thuan, and the southern provinces of Tay Ninh, Binh Duong, Binh Phuoc, Long An, and Ba Ria-Vung Tau.
Ninh Thuan has average solar irradiance (the power per unit area: watt per square meter – W/m2) of 1,800 kWh/m2/year, according to Meteonorm – a widely used and accepted solar radiation data source in the solar energy industry.
For wind power, Smart Grids Project Director Tobias Cossen at the Deutsche Gesellschaft für Internationale Zusammenarbeit (German International Cooperation – GIZ) said that Vietnam’s wind power potential is estimated to reach 27GW with Ninh Thuan, Binh Thuan, Kien Giang, Ca Mau ranked the most potential.
In addition, the initiatives are further encouraging investors to enter the sector. Accordingly, the Ministry of Industry and Trade has issued the third draft of the Prime Minister’s decision on the mechanism for encouraging the development of solar power project. This is the latest version of the government’s ongoing effort to support the renewable energy industry.
As a result, foreign investors have announced plans to invest across the energy infrastructure sector in recent months. This is boosting competition and maturity in this sector of alternative investment.
Noticeably, a combination of allocating capital to sustainable projects and stiff competition among investors continues to put renewable energy strategies in focus, according to JLL.
JLL reviewed that there’s a world investment flow into renewable energy regardless of the US or Asia. For example, Chicago plans to power all city properties with wind and solar energy by 2025 while Atlanta has committed to reaching 100% renewable energy by 2035.
In Asia, developers and governments are slowly but steadily experimenting with sustainable building approaches to renewable energy amid rising demand for energy.
Vietnam in particular has made a number of policies to encourage the development of renewable energy, especially high selling prices for solar power developers.
In terms of investment, a noticeable project this year is the BIM solar power farm in Ninh Thuan, developed by Vietnam’s BIM Group in partnership with Philippines-based AC Energy. The solar farm is composed of three facilities with the combined capacity of 330MW, which is the largest of its kind in Southeast Asia, according to BIM Group.
In May, Norway’s Scatec Solar signed a deal worth USD500 million with Vietnamese partner MT Energy (MTE) for 485MW of three solar PV projects in the southern province of Binh Phuoc, the central provinces of Quang Tri and Nghe An. The projects which will be developed, financed, and executed by the joint venture would work under a new feed-in tariff regime that is expected to be launched later this year, Scatec Solar said on its website.
There is immense pressure on the current power grid in Vietnam and energy prices are expected to rise due to an increase in development activity and consumer demand, especially within the major cities and industrial zones, Stephen said, adding that it is incredibly important that this type of alternative investment plays a dynamic role in the country’s future growth.