Renewable Energy in Vietnam’s Energy Future
by Johannes Urpelainen
The combination of rapid economic growth and industrialization means that Vietnam’s air pollution problems and dependence on energy imports could grow worse in the future. If the economy continues to perform well, energy demand may grow by up to 4-fold by 2030. If this demand were met with increased use of coal, air pollution problems would become very serious. If Vietnam’s natural gas consumption continued to grow, the country would become an importer and vulnerable to supply disruptions.
With the exception of large hydroelectric dams, renewables don’t yet play a major role in Vietnam’s energy mix. Both solar and wind power are currently negligible, but the government aims to increase the share of renewable energy in the power sector to 10% by 2030. Most of this generation would come from new solar, wind, and biomass generation capacity. The Vietnamese government expects all three sources of renewable power to play an important role in the future.
Vietnam’s renewable energy plans face a few important challenges. Besides fossil fuel subsidies, the lack of transparent and simple rules for renewable energy projects slows down private investment in renewable power generation capacity. While Vietnam’s national electricity utility, Vietnam Electricity, has collaborated with the World Bank to promote private investment in renewables, the current regulatory framework makes rapid growth with private capital difficult.
Vietnam’s grid infrastructure is also not yet ready to manage intermittent renewable power supply. Although Vietnam has an integrated national electric grid, major infrastructural improvements are necessary to accommodate growing renewable power generation.
Last week, I had the honor to meet with a Vietnamese delegation to discuss Vietnam’s renewable energy scenario and potential policy approaches. The discussion made it clear that Vietnamese officials are committed to finding environmentally sustainable ways to meet the country’s growing power demand.
I am looking forward to visiting Hanoi in December for meetings with utility management, regulators, and relevant government agencies. I hope it’ll be the beginning of a robust ISEP program to support Vietnam’s quest for sustainable energy.