With its abundant resources and surging demand for green energy, Vietnam is poised to become a regional leader in renewables, an energy policy official said. Still, challenges faced by investors such as uncertainty in the regulations and the shortage of infrastructures remain.
Ha Dang Son, Deputy Director of Vietnam Low Emission Energy Programme II (V-LEEP II), highlighted the country’s attractive prospects for local and foreign investors in renewables at a recent conference organized by Forbes Vietnam.
“Vietnam’s vast renewable resources, growing energy demand and supportive governmental policies are major contributing factors,” Ha said that its ample solar resources offer favorable conditions for investors as do its extensive coastline and favorable wind conditions.
Its well-established agricultural sector generates substantial biomass waste, which can be utilized for energy generation, he noted.
Ha highlighted the government approved in May a power development master plan that prioritizes renewable energy. The plan includes an ambitious goal to generate 20% of the Vietnam’s electricity from renewable sources by 2030.
Experts pointed out the country requires 135 billion USD for power plant and transmission grid development by 2030, and over 500 billion USD by 2050.
They emphasized the need for foreign investment, green credit and domestic private capital to achieve the transformation into a sustainable energy model.
They also discussed the major challenges faced by investors such as uncertainty and inconsistency in the government’s renewable energy policies and regulations.
Trinh Quoc Vu, CEO of a HCM City-based renewable energy company, said the shortage of infrastructure to accommodate the rising renewable power capacity is another obstacle.
Dang Quoc Toan, Chairman of the Asia Petroleum Energy Corporation, said the lack of transparency in the bidding for renewable energy projects is also a crucial issue. Also, financing remains a challenge despite the decreasing costs of renewable energy technologies.
The complex and time-consuming land acquisition process in Vietnam is another hurdle for investors in renewable energy projects.
The lack of skilled professionals and limited domestic manufacturing capabilities build up costs and timelines in Vietnam since developing large-scale renewable energy projects requires skilled worker and robust supply chain networks.
Supa Waisayarat, Vietnam country manager for Thailand’s Super Energy Corporation, suggested that investors should stay updated on government policies, regulations and incentives related to renewable energy.