Vietnam Energy Situation
Capital:
Hanoi
Region:
Coordinates:
21.0333° N, 105.8500° E
Total Area (km²): It includes a country's total area, including areas under inland bodies of water and some coastal waterways.
331,340
Population: It is based on the de facto definition of population, which counts all residents regardless of legal status or citizenship--except for refugees not permanently settled in the country of asylum, who are generally considered part of the population of their country of origin.
98,858,950 (2023)
Rural Population (% of total population): It refers to people living in rural areas as defined by national statistical offices. It is calculated as the difference between total population and urban population.
61 (2023)
GDP (current US$): It is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources.
429,716,969,050 (2023)
GDP Per Capita (current US$): It is gross domestic product divided by midyear population
4,346.77 (2023)
Access to Electricity (% of population): It is the percentage of population with access to electricity.
100.00 (2022)
Energy Imports Net (% of energy use): It is estimated as energy use less production, both measured in oil equivalents. A negative value indicates that the country is a net exporter. Energy use refers to use of primary energy before transformation to other end-use fuels, which is equal to indigenous production plus imports and stock changes, minus exports and fuels supplied to ships and aircraft engaged in international transport.
-15.11 (2013)
Fossil Fuel Energy Consumption (% of total): It comprises coal, oil, petroleum, and natural gas products.
69.82 (2013)
1. Introduction
During the last 25 years Viet Nam’s economic growth reached more than 6% each year. At the same time, the energy demand increased almost twice as fast as the GDP. Within an expected continuous increase of energy demand within the next years, Viet Nam’s energy sector will have to face many challenges, such as limited domestic fossil resources, air pollution and climate change, causing amongst other things water scarcity. Viet Nam has been ranked among the five countries, that will be most affected by climate change. Another issue is the unreliability of power supply, especially in rural areas. In order to face these challenges, legislative conditions have to be adopted and the framework conditions for investments have to be reformed in order to strengthen foreign investments and eventually stimulate the expansion of renewable energy generation capacity.
General Overview of Viet Nam's Energy Situation
A reliable power supply is an important requirement for an emerging market like Viet Nam. By end of 2014, 34 GW generation capacity was installed in the country, producing around 146 TWh electricity. Assumptions of the Power Development Plan 7 (PDP7) predict an overall power demand increase by a factor of almost 2.4 in the next 5 years, reaching a demand of 350 TWh in 2020, with an installed capacity of 75 GW. According to the PDP, coal power plants will mainly contribute to the essential capacity expansion, replacing hydropower as primary resource for electricity generation.
Currently, the power production is still dominated by hydropower with a share of 41% in electricity generation, followed by natural gas with 31% and coal with 26%. Due to limited domestic coal and gas resources, Viet Nam’s fossil import dependency will increase. Except from hydropower, markets for renewable energies such as for wind and solar power are in a very early stage of development. Knowledge and reliable information about project development or regulative processes is very limited.
Governance and Market Structure
The Vietnamese electricity market is monopolistic, dominated by the state-owned-enterprise EVN, which is supervised by the Ministry of Industry and Trade (MoIT). In the generation market, EVN is single-buyer and power transmission and distribution systems are exclusively operated by subsidiary companies of the utility. However, the goal of the government is to develop a competition-based generation, wholesale and retail market until 2023, in particular in order to attract private and foreign investments in the energy sector. The average electricity selling price has been continuously increasing in the last years, but with 1622 VND/kWh (7.5 USCent/kWh) it is still too low to finance overall electricity generation costs. As a result, EVN operated at a deficit of 790 million US$ in 2014.
Renewable Energies in Viet Nam
In 2014, renewable energies contributed with 41% to Viet Nam’s electricity demand, but this share was almost exclusively accounted for by hydropower. According to the MoIT Small Hydropower (SHP) can still be expanded, but in general Viet Nam’s hydropower potential is nearly exploited. In contrast, wind, solar and biomass expansion potentials are high and to a great extent untapped. In the revised PDP, expansion targets for renewable energy generation capacities are set until 2030, as shown in Figure xx.
Wind Power
Although potential for wind power development in Vietnam is high, only 52 MW have been put into operation up until now. While many projects are in the planning phase, they face substantial market barriers, such as deficient wind measurement data reliability and a low feed-in-tariff for wind energy of only 7.8 Ct/kWh.
Biomass Power
According to PDP7 a bioenergy generation capacity of 500 MW will be installed until 2020. The largest regional feedstock potential is located in the Mekong delta region. Feed-in tariffs for electricity co-generation and municipal-solid-waste projects are already established, but projects are mostly in an early planning phase. It is assumed that the support mechanism and framework have to be adopted and expanded on further applications and feedstock in order to strenghen biomass power deployment in Viet Nam.
Solar Power
In general, Viet Nam can be considered as a country with high solar energy potential. The solar resources are comparable to countries like Italy, Spain, and California or – staying in the region – China or Thailand. According to a very recent mapping project by a Spanish research consortium estimations of overall solar resources in Viet Nam show an average GHI of 4-5 kWh/m2/day in most regions of southern, central and partially even northern Viet Nam (corresponding to 1,460-1,825 Wh/m2/year) and peak irradiation levels of up to 5.5 kWh/m2/day on average in some southern regions (corresponding to about 2,000 kWh/m2/year).
Technologies and Applications
The Vietnamese solar PV market is currently very small with only around 4.5 MWp installed capacity at the end of 2014. Around 80% of that capacity was deployed off-grid and 20% is grid-connected. For off-grid uses, applications can be divided into two main categories. First, there are small-scale applications for domestic (lighting, home appliances etc.) or non-domestic (telecommunication, BTU etc.) uses. And second, there are larger PV off-grid systems that either include additional infrastructure for local power distribution or management (mini-grids) or additional sources of power such as diesel generators or wind turbines (hybrid systems). The former can be subdivided into Pico PV applications such as solar lanterns or solar battery chargers, Solar Home Systems (SHS) for mostly domestic appliances and larger stand-alone PV systems for mostly institutional uses such as community or medical centers. Power capacities of these systems range from less than 1 Wp for Pico PV applications to 1 kWp and more for larger stand-alone systems. Regarding larger-scale off-grid applications there are different technologies and system configurations in operation including stand-alone off-grid PV systems, hybrid systems (PV with diesel, wind and/or batteries) and PV mini-grids with a substantial part of grid infrastructure included.
Grid-connected systems are mainly based on crystalline-cell module types of different sizes. They can be clustered in residential PV rooftop units (approx. 1-50 kWp), commercial/industrial PV rooftop units (>40kWp) and ground-mounted PV systems. Almost all grid-connected systems are in inception phase and projects are usually for demonstration or pilot purposes. The main market barrier seems to be the low electricity tariff.
Following the available data, roughly 60-70% of the off-grid installed capacity in Viet Nam is dominated by smaller applications such as Solar Home Systems (SHS), small base transceiver stations for telecommunications (BTS), solar public lighting systems and likewise applications. Around 30-40% of off-grid installations are bigger systems such as solar local network stations and off-grid hybrid systems in remote areas or on islands.
Current Policy and Remuneration Scheme
Currently there are no solar PV development targets implemented within the relevant energy strategies such as the Master Plan for Power Development (Power Development Plan). The \PDP VII from 2011 is currently under revision and expected to be finalized and published until mid of 2015. A first draft became public end of October 2014 showing raised targets for renewable energies in general and, for the first time, a specific target for solar PV.
According to this draft, solar PV capacities are supposed to increase to around 7 MWp until 2020 and 1,500 MWp until 2030 with a respective share in renewable power generation capacity of 1.2% (by 2020) and 12.8% (by 2030).
Policy Framework for PV On-Grid Applications
Currently, there has not been any specific regulation for solar PV implemented so far. This applies in particular to the following aspects of the regulatory energy framework:
- There are no financial incentives (such as Feed-in-Tariffs or net-metering schemes) to promote the deployment of solar PV. PV is not yet included in the existing FIT scheme for renewable energies.
- There is no standardized interconnection code (grid code) for PV systems. However, an ongoing project involving EVN, the energy authorities of Da Nang City and the International Copper Association Southeast Asia (ICA-SEA) has now made first steps in this direction and developed a proposal for an interconnection standard for PV as well as a general net-metering scheme.
- There is no effective regulation on the sale of excess solar electricity generated by private or commercial PV systems. As interviews and consultations with private sector stakeholders have shown, this constitutes a significant barrier to investments in commercial PV applications.
- There are sometax-related incentives in place that can be applied to renewable energy investments and technologies in general, such as an import tax exemption, a corporate tax exemption and an environmental protection fee exemption (IoE, 2014). It is yet unclear whether these incentives can also be applied to solar energy applications.
- Furthermore, there are incentives for infrastructure and land use regarding investments in major power stations that could also be applied to solar energy investments. In addition, the local People’s Committees are responsible for providing available land to wind power projects.
Policy Framework for PV Off-Grid and Rural Electrification
The prospects of further PV off-grid development in Viet Nam are mainly framed by the national electrification strategy and related political targets and measures. This strategy has its main foundation in the Power Development Plan (PDP), which indicates the strategy to develop and create rural power until 2020. Here government stimulates EVN to develop the national power grid to supply power to 100% households by 2020.
The second rural electrification project (REPII) is providing funds for this process. The objective of the REPII, which became effective in 2005, is to improve access to good, affordable electricity services to rural communities in an efficient and sustainable manner, financed with a US$200 million IDA credit and US$5.25 million GEF grant, the project included a major upgrading and expansion of rural power networks in about 1,200 communes, the conversion of the existing ad hoc local electricity management systems to the local distribution utilities (LDUs) as legal entities recognized under Vietnamese law, to improve management of power distribution in rural areas and capacity building assistance for LDUs, provincial authorities, participating regional PCs, and national authorities involved in the planning and regulation of rural electrification. Additional financing for the Second Rural Electrification Project (US$200 million IDA credit) was approved in May 2009 and is supposed to increase the outcome to 1,500 communes with 1.5 million households (see USAID/Winrock/SVN 2014).
Solar Resource Potential and Data Bases
The most up-to-date and scientifically comprehensive estimation of solar resources in Viet Nam was undertaken by a Spanish research consortium led by the Spanish Research Centre for Energy, Environment and Technology, CIEMAT, with support of the Spanish government and in collaboration with the Vietnamese Ministry of Industry and Trade. As a result of these efforts very detailed maps of solar resources in Viet Nam are now available for policy makers, investors and researchers (CIEMAT et al. 2015). The data is supposed to be published by MoIT in 2015 (http://www.moit.gov.vn/en/Pages/default.aspx).
Since there is no publicly accessible database on solar PV projects, available information on existing projects are based on individual private or institutional monitoring efforts. The most comprehensive overview has been published by Mr Thrinh Quang Dung, former director of the Solar Laboratory of the Institute of Physics in Ho Chi Minh City (Solarlab) under the Vietnamese Academy of Science and Technology (VAST). The following project overviews are mainly based on his publications (see e.g. Dung 2015).
Existing Solar Projects
By the end of 2014, roughly 15,000 small scale PV off-grid applications with a total capacity of 3,600 kWp, the vast majority being <200 Wp of size only a few with more than 1kWp, have been installed in Viet Nam. Of those, around 5,000 were solar home systems (SHS) with a size of 20-200Wp, 2,100 were telecommunication and BTS systems (300-4,000 Wp) and more than 1,000 were small size PV systems for public use such as in community centers, schools or medical centers (up to 3,000 Wp), which were deployed in rural and mountainous areas or on islands. Furthermore, around 5,000 solar signal lights (20-100 Wp) and 2,000 public lighting systems (50-250 Wp) were installed alongside streets and highways throughout the country.
There are also a number of larger-scale PV off-grid systems in operation, including hybrid systems (PV-wind, PV-diesel, PV-wind-diesel) that often include grid and grid management infrastructure as well (mini grids). There is for example one project in Bai Huong village on Cu Lao Cham island (28 kWp PV plus 20 kW diesel generator) and one at Mang Yang in central highland Gia Lai province with 100 kWp PV combined with a 24 kWp mini hydro plant. Further projects are in development for several islands including PV-wind hybrid systems. In addition to these hybrid systems installed in the rural areas of Viet Nam’s mountain regions, there have been more than 50 PV hybrid projects realized on islands and naval outposts. All of these projects were put into operation together with EVN and the Vietnamese Navy as the main investors and off-takers for the energy provided by the systems.
The grid-connected share of installed capacity is dominated by a rather small number of bigger roof-top systems such as the installations of Intel Corporation (220 kWp), Big C (200 kWp), the National Conference Hall in Hanoi (154 kWp), the UNDP building in Hanoi (119 kWp) or the new National Assembly in Hanoi (50 kWp). So far, there are no larger ground-mounted PV systems in operation yet. However, there have been some announcements for investments in utility size PV power plants very recently. Following media reports from January 2015, there is 30 MWp PV plant under development and planned to be grid-connected in Quang Ngai province by end of this year. The investment of 60 million USD is supposed to be made by a joint-stock company. Another announcement relates to a planned 100 MWp PV plant in central Viet Nams Quang Nam province. Following media reports from March 2015, a Russian energy company with Singaporean and Vietnamese investment partners is planning to invest 140 million USD but negotiations with EVN about “market prices” are still ongoing.
Further Readings
Publication of Solar Resource Potential Maps for Vietnam Results of a study analysing the solar radiation and solar energy potential in Vietnam, conducted by a consortium of CIEMAT, CENER and IDAE with support of AECID and MOIT. http://www.tcnl.gov.vn/userfile/files/Maps of Solar Resource and Potential in Vietnam REPORT FOR PUBLISHING.pdf
Activities and Events
Date: 8:30 – 17:30, 11 February 2015
Venue: Crowne Plaza West Hanoi - 36 Le Duc Tho Street, My Dinh Commune, Tu Liem District, Hanoi, Vietnam
RENAC Training - “Planning grid-connected PV projects”
The 3-day seminar “Project planning of grid-connected PV” offers its participants the opportunity to learn about important aspects for successfully planning large PV projects. Participants will be guided through the four steps of a PV project: project development, planning & engineering, construction as well as operation & maintenance. Experts in the field will explain participants the main pitfalls and risks and explain how to recognise and avoid them.
Date and Place: 22 – 24 April 2015, Hanoi Website and Application: http://www.renac.de/en/current-projects/capreg.html
Transmission and Distribution System
The national transmission and distribution grid has to be extended in synchronization with increasing power demand and generation capacity in order to reduce power outages, losses and increase the quality of supply. During the period of 2014-2020 an investment volume of around 12.4 billion US$ is estimated to be needed. Viet Nam’s rural electrification rate was 97.3% by the end of 2013. Thus, it is another governmental target to reach 100% by 2020. Furthermore, In PDP 7 it is also stated to strive for an implementation of a cooperation and connectivity program with ASIAN and Mekong sub-region power grids. High voltage line connections with Laos, Cambodia and China already exist.
In terms of power reliability Viet Nam is currently ranked 113 out of 144 countries. In rural areas, power shortages and blackouts, lasting longer than 5 min occurred around 20 times per year in 2013.
Legal Documents
In Viet Nam there are a number of different legal documents relating Renewable Energies from hierarchical very different legal bodies. Laws, ordinances, decrees, orders, government decisions, circulars, guidelines and ministerial decisions respectively have different impacts on the regulative environment. Some of those documents, relating Renewable Energies in Viet Nam are listed below:
The Ministry of Industry and Trade‘s Circular No. 06/2013/TT-BCT, Regulation on Content, Order, Procedures for Formulation, Appraising and Approving Wind Power Development Planning, Legal Document, Hanoi, 08 March 2013
The Government‘s Decision No. 24/2014/QD-TTg, On Support Mechanism for Development of Biomass Power Projects in Vietnam, Legal Document, Hanoi, 24 March 2014
The Ministry of Industry and Trade‘s Circular No. 31/2011/TT-BCT, Providing for The Adjustment of Electricity Sale Prices According to Basic Input Parameters, Legal Document, Hanoi, 24 March 2014
Further Information
References
AWS Truepower (2011). Wind resource atlas of Vietnam. 463 New Karner road, Albany New York 12205
IEA (International Energy Agency), Renewable Energy Division (2013). Investment in Renewable Energy. Authors: Waldron M., Babar H..
IRENA (International Renewable Energy Agency), 2012. Renewable Energy Technologies: Cost Analysis Series: Wind Power.
TrueWind Solutions (2000). Wind energy resource atlas of Southeast Asia and WB’s wind map, 2001
WE Council (World Energy Council); BNEF (Bloomberg Energy Finance) (2013). World Energy Perspective. Cost of Energy Technologies.
World Bank (2012). Financing Renewable Energy: Options for Developing Financing Instruments Using Public Funds. Website, URL: http://www-esd.worldbank.org/refine/index.cfm?Page=knowledge_center, last access 18.06.2014.
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