Solar Energy Power Future in Vietnam

Although the initial investment cost for solar energy in Vietnam is high but it brings in opportunities for cheaper option than thermal power technology being used in Vietnam.

In other country, solar power plants are competing fiercely with the thermal power plants running on coal.

In Vietnam, Thien Tan solar energy plant has been started to construct on 24 ha land in Quang Ngai with capacity of 19.2 MW at investment of VND 800 bil. The Ministry of Industry and Trade has also approved the investment project of Tuy Phong solar energy plant on 50 ha land in Binh Thuan with capacity of 30 MW at investment of VND 1,454 bil. This will open opportunities for renewable energy to contribute to the effort of protecting the environment and curbing climate change.

The solar energy is new in Vietnam therefore the investment in this area is at very early stage. However, the foreign investors have been increasingly interested in seeking opportunities in investment in solar energy projects.

Similar to investment in wind power energy in Vietnam, one of the concerns for investors is the expected increase in purchasing price from Electricity Vietnam Corporation, the party whom purchase the electricity on Power Purchase Agreement (PPA). Further, legal frameworks for promoting solar energy investment are not yet finalized. Accordingly, the contribution ratio of renewable energy in Vietnam is minimal. The Vietnam government has been trying to put some effort to increase the renewable energy contribution to 5,6% (in 2020) and 9,4% (2030).

To achieve this, Vietnam government shall need to be consulted on plan to support the solar energy investment project in Vietnam in tax, land, capital, power purchase agreement. Investors would need to be consulted by local consulting firm on process, procedures on investment policy, appraisal process, power purchase agreement, and other steps to develop and execute an energy project in Vietnam to improve the effectiveness of the investment in renewable energy.

Read More

Solar Power Projects Appear More and More in The Central Region: Foreign Contractors Take Advantage

The Central Coast from Quang Ngai to Ninh Thuan is becoming a huge solar power construction site with a series of projects being groundbreaking and starting construction, in which foreign contractors make bold marks.

In the second half of 2018 and the early days of January 2019, a series of solar power projects were started in the Central region, with the most concentrated in Quang Ngai, Binh Dinh, Phu Yen, Khanh Hoa and Ninh Thuan.

Ninh Thuan attracts the most solar power projects in the country. According to the Department of Planning and Investment of this province, in the second half of 2018, there were 15 solar power projects taking steps to build. The number of projects to start construction continues to increase in the first half of 2019, because according to Vice Chairman of Ninh Thuan province, the provincial People’s Committee has issued decision on investment policies for 30 projects, with a total capacity of 1,788.79 MW.

Among the solar power plants that have started construction and are targeting the national grid before June 2019, there are projects such as CMX Renewable Vietnam of Re Sun Seap Vietnam Solar Power Joint Stock Company; My Son Solar Power Plant; Phuoc Huu Solar Power Plant; Solar Power Bim 1, Bim 2, Bim 3…

In Binh Dinh, many solar power projects have been present, such as Cat Hiep Solar Power Plant (Phu Cat District), Solar Power Plant combined with wind power of Fujiwara Joint Stock Company (Japan)…

In Phu Yen, according to Vice Chairman of Phu Yen People’s Committee, there are 7 projects in this province approved by the Ministry of Industry and Trade into the Electricity Plan VII. In which, 6 projects have been granted investment policies by the province.

Sterling Wilson, India’s leading solar power consulting and construction corporation, has completed the construction contract (EPC contract) for Sao Mai solar power plant project of Sao Mai Group, worth nearly 80 million USD (phase I).

Many power projects in Vietnam have the imprint of Power China Kunming Engineering Corporation Limited Consortium (Power China – a contractor from China), such as Package 7 on design, supply of equipment and materials, construction and installation of Vinh Tan 2 Solar Power Plant (EPC bidding package) under the Vinh Tan 2 Solar Power Plant Project, which is undertaken by Sinohydro Corporation Limited – Power China Kuming Engineering Corporation Limited Consortium.

Power China is also the contractor implementing the important bidding packages of Hong Phong 1 and Hong Phong 2 renewable power projects, under Vietnam Trading Engineering Construction Joint Stock Corporation (Vietracimex).

This is also the contractor participating in the implementation of bidding package DMS-8 on designing, supplying, installing and testing photovoltaic equipment under Da Mi solar power plant project; participating in implementing the package at Song Bung 4 Hydropower Plant Project (Quang Nam)…

Meanwhile, Binh Nguyen Solar Power Plant Project (Quang Ngai), which is led by Hawee as EPC general contractor, associated with Sharp Solar Solution Asia (SSSA – Japan) – Hawee IDC designed, constructed and installed.

As acknowledged by a number of reputable construction corporations in Vietnam, Vietnam’s solar power market is witnessing a wave of participation of foreign contractors, with a huge bid value for construction, installation, equipment, technology…, even a project signed contract under the form of turnkey contract with total project value of up to 80%.

Read More

Progress of Solar Power Plant Projects Approval up to June 2019

It appears that the implementation plan of national power has revealed a number of difficulties and limitations. In particular, many power projects have encountered slow progress compared with the plan, especially power projects in the South such as Long Phu I, Long Phu II, Song Hau I, Song Hau II, Vinh Tan III …

The development of coal-fired thermal power sources is facing the increasing demand for environmental protection as well as the requirement of import infrastructure, coal supply for factories. Accordingly, the Ministry of Industry and Trade has to report the situation of development of solar plant project to the Prime Minister for monitoring and encouragement with goal of development of sustainable energy supply.

The government would consider getting more solar power plant projects added to the national power development plan, with consideration to fairness and transparency in planning management, ensuring the suitability of power supply requirements, grid connection possibility and the effectiveness of use of land for power projects.

In the coming period, the National Power Development Plan will be supplemented only in the revised National Power Plan VII for the solar power plant projects completed the appraisal and approval stages, including the BIM2 solar power plants (250MW) in Ninh Thuan Province, Phu My (330MW) in Binh Dinh Province.

The Ministry of Industry and Trade is responsible for the appraisal of the solar power project, especially the calculation determining the necessity to supplement the adjusted National Power Plan VII, the capacity of the projects, the feasibility of to make investment in construction and conformity with the current provisions of law on the solar power development.

According to the report of the Ministry of Industry and Trade, the total capacity of the solar power projects approved in addition to the power development plan reaches over 3,000 MW in 70 projects to be put into operation before June 2019 which has far exceeded the projected plan of solar power development expected to 2020 in the National Power Development Plan VII, which was adjusted by the Prime Minister.

Read More

Korean Capital Flows into Renewable Energy

Vietnam has issued many policies and incentives for the development of the power sector. This is a good time to attract foreign capital into Vietnam energy industry, including those from Korea.

According to Mr Nguyen Van Vy, Vice Chairman of the Vietnam Energy Association, with the goal of raising the proportion of electricity produced from renewable energy to 32% by 2030 and 43% by 2050, Vietnam currently has about 50 wind power projects, more than 100 solar power projects and many other biomass energy development projects are under study.

Meanwhile, according to the National Electricity Development Plan 2011 – 2020 with a vision to 2030, Vietnam will accelerate the development of electricity production from renewable energy and reduce the proportion of hydropower.

In order to realize these objectives, Vietnam has promulgated many policies and incentives to encourage the development of renewable energy, such as investment credit, import tax, export tax, enterprise income tax, exempt land use fees and land rents for renewable energy projects, provide financial support for scientific and technological research activities on energy. At the same time, calling for investment and receiving science and technology to develop the domestic electricity equipment industry.

More recently, many Korean businesses have come to the provinces to look for investment opportunities in renewable energy projects, such as IL Yang Industrial Co., Ltd., proposed to Quang Tri province to invest in building solar power plant in Hai Lang District (capacity 500 MW) and Vinh Linh District (capacity 200 MW); Or VTC company, after inquiring in Bac Lieu province, they are preparing large capital for wind power project and if approved, they will quickly expedite the necessary procedures as prescribed.

At the Vietnam – Korea Renewable Energy and Power Industry Forum recently held in Ho Chi Minh City, according to Mr Paik Un Gyu – Minister of Commerce, Industry and Energy of Korea, the two countries have long-term cooperation potential in the fields of energy, renewable energy and smart grid.

According to Mr Paik Un Gyu, Korea will actively invest in power generation and renewable energy development projects in Vietnam as a strategic partner. In addition, Korea also supports the training of human resources and technology transfer to develop internal power and renewable energy in Vietnam.

On this occasion, at the 8th Session of the Vietnam – Korea Joint Committee for Cooperation in Nuclear Power, Energy, Industry and Trade, the two sides agreed on a number of bilateral cooperation. In particular, there are many cooperation in the field of energy, such as cooperation in projects to build power plants in the form of BOT; cooperation in the field of oil and gas; cooperation in renewable energy; cooperation on energy security management; development cooperation in supporting industries…

This is the basic content for the two countries to develop and implement concrete and practical projects to further develop cooperation in the fields of industry, trade and energy in 2018 and the coming years.

According to Korean businesses, now is a good time for enterprises to learn about the strategy and planning for development of electricity and renewable energy as well as contact and exchange directly with the leading enterprises of Vietnam. Accordingly, enterprises of the two countries can consider the possibility of cooperation in various forms, such as joint venture investment in the development of power projects, cooperation in providing technology, equipment and specialized materials.

Read More

Changes needed for Development on Wind Energy in Vietnam

Changes needed for Development on Wind Energy in Vietnam

For economic sustainable development combined with environmental protection, the Government of Vietnam has made significant steps in the formulation of policies on renewable energy development, which take advantages of favorable conditions for the production of wind energy.

Many policies have been initiated to support wind power project, including power price assistance from central budget; assistance to grid and off-grid connected wind power projects… focusing on wind power electricity development target to achieve the total wind power capacity from the current negligible level to around 800 MW by 2020 and around 6,000 MW by 2030, raising the rate of electricity from wind power accounted for 0.8% in 2020 to 2.1% in 2030.

Some financial policies for investment projects under the Clean Development Mechanism (price supporting mechanism) are issued. Moreover, the Government published independent mechanisms to support wind power projects on electricity price for grid-connected wind power projects, power purchase agreements for wind power projects.

Nonetheless, there are difficulties in the development of wind power projects in Vietnam that should not be ignored. The first thing is difficulty of legal framework. The system of legislation, mechanisms and policies for wind power development are not synchronized. New project must be granted by the Ministry of Industry and Trade to establish the supplementary planning procedures prior to implementation. Power purchase agreement with EVN will be required as the initial condition to obtain investment permission.

Moving toward the future of clean energy in Vietnam, the Government should focus on implementation of preferential treatment to wind energy projects to increase the competitiveness of this renewable energy. In addition, the Government should also collaborate with investors, and industry experts to continue to research the wind power potential in Vietnam, further attract investment and assistance from domestic and international organizations for the wind power projects. Further, it is in the meantime required to have synchronized policies, legislations with the establishment of government authority to execute wind power planning and management to remove unreasonable barriers.

The increase in purchasing price from EVN will be attracting more investment. It has been discussed on the increase of buying price from 7,8 US cent/kWh however the timeline for the increase has not yet been finalized.

Read More

Shinhwa Group E&E (Korea) Invested in Solar Water Project in Quang Tri

Shinhwa E&E Co., Ltd (Korea) has conducted the survey and agreed to select the location of Trieu Thuong 1 and Trieu Thuong 2 lakes (Trieu Phong district, Quang Tri province) to implement two energy projects sun on the water in Quang Tri Province.

On January 24th, Shinhwa E&E Co., Ltd (Korea) had a meeting with Quang Tri People’s Committee on the occasion when the delegation come to explore opportunities for cooperation and investment in solar projects on the water in the province.

At the meeting, Shinhwa E&E Co., Ltd said that earlier, through the survey, the delegation has basically agreed to choose the location is Trieu Thuong 1 lake with a water surface of 35 hectares, which is expected to construct the solar power projects on the water with capacity of 20 MW; the Trieu Thuong 2 lake area with a water surface of 56 ha is expected to construct the solar power project on the water with capacity of 30 MW. Shinhwa E&E is expected to launch the project in two lakes Trieu Thuong 1 and 2.

Speaking at the meeting, the Vice Chairman of Quang Tri Provincial People’s Committee said that this is an interesting field. If Shinwa E&E Co., Ltd intends to invest, the province is very welcome and willing to create every favorable condition for the company to survey and implement the project.

Vice President Nguyen Quan Chinh assigned the Department of Industry and Trade to support Shinhwa E&E Company in the process of researching to implement the next steps in accordance with the law of Vietnam.

Also at the meeting, the two sides have signed a memorandum of understanding on the implementation coordination of solar power projects on the water in Quang Tri province. Accordingly, Shinhwa E&E Co., Ltd will study the investment location of solar power projects on the water in order to compile the supplementary plan of the project into the electricity planning of Quang Tri province. Moreover, Shinhwa E&E Co., Ltd is responsible for all expenses related to the survey, technical report and project development.

Read More

After 11 Years, Van Phong 1 Thermal Power Project Was Licensed

Van Phong 1 thermal power project, with investment capital of 2.58 billion USD was officially granted investment certificate, marking another project of Japanese investors invest in Vietnam. This coal-fired thermal power plant has a capacity of 1,320 MW.

Van Phong 1 thermal power project was proposed by the Sumitomo Corporation (Japan) in 2006, with a capacity of 2,640 MW, covering an area of over 350 hectares, divided into two phases. Of which, the first phase has investment capital of over 2 billion USD. In 2009, the project has been approved by the Government to be implemented in the form of BOT.

However, due to many obstacles, including BOT contract negotiations, so far, the project has not yet been implemented or even cannot complete procedures to be issued investment certificate.

The project is expected to be built on an area of over 514.79 hectares, including 178.4 hectares of factory, 68 hectares of fodder land, 3.4 hectares of accommodation for professionals and 265 hectares of water surface area. Since the size of land use is quite large, the ground clearance process faced with a lot of difficulties.

However, the project has now officially been licensed. According to the plan, in early 2018, the project will be started construction.

So, from the beginning of this year, three BOT thermal power projects have been granted investment certificates. The largest is the construction of Nghi Son 2 BOT thermal power plant with a total investment of 2.79 billion USD. The project is also invested by a Japanese investor in Thanh Hoa, aiming to design, construct, operate and transfer a coal-fired power plant with a capacity of 1,200 MW.

The second largest is Van Phong 1 thermal power plant. And third is BOT Nam Dinh 1 thermal power project, with a total investment of 2.07 billion USD.

BOT Nam Dinh 1 is invested by Singapore Investors with the objective of designing, constructing, operating and transferring a coal-fired thermal power plant with the net capacity of 1,109.4 MW.

This is the reason why, in the past 11 months, electricity production and distribution has risen to the second position among the sectors attracting the most investment, after processing industry. Total investment capital into this field is 8.37 billion USD, accounting for 25.3% of the total registered capital.

Read More