Vietnam’s solar FiT program delivers: Watch for progress on the grid and wind
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Key Findings
Vietnam’s renewables program is gaining momentum at a strategic time. Vietnam has already electrified 99 percent of its population; now demand for electricity is poised to increase.
The greatest potential for Vietnam’s wind sector theoretically lies offshore. Of the 6,200MW of wind power the Vietnamese government wants to install, the overwhelming majority would have to come from offshore wind farms.
The emergence of a new group of Southeast Asian corporate investors – especially those looking to build diversified Asian RE portfolios – signals a shift away from the traditional project finance development model.
Executive Summary
Vietnam’s successful solar program proves the skeptics wrong
Vietnam’s US$0.09 per kWh solar feed-in-tariff (FiT) program has just delivered 4.46GW of new capacity for Vietnam’s fast-growing power market. This is an impressive achievement that validates the government’s step-by-step approach to market development and the ability of domestic and international developers to mobilize capital for scalable renewable energy (RE) portfolios. It also highlights the ability of modular renewable projects to deliver much-needed capacity more rapidly than large scale baseload fossil fuel projects that require large expenditures on associated infrastructure.
Progress on grid and wind come next
Vietnam’s policymakers have been smart to signal a gradual approach to the next phase of market development with a wind FiT program that is set to build momentum in the coming two years. Most wind projects thus far have been onshore, but Vietnam holds considerable potential for larger nearshore and offshore projects. Now that some promising new regional developers have established themselves in the market, investors will be watching to see how the government defines its renewable ambitions with new targets in the Power Development Master Plan VIII and plans to upgrade the grid.
Press release: IEEFA report: Vietnam’s solar program beats expectations
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