Prime Minister calls for prompt resolution of challenges hindering the advancement of renewable energy ventures
Vietnam Addresses Challenges in Wind and Solar Power Projects
Vietnam is tackling several issues in the completion of wind and solar power projects, particularly concerning Commercial Operation Dates (COD) and electricity purchase prices. Here's a breakdown of the current problems and proposed solutions:
Current Issues
- COD Validity: Many investors have faced difficulties in obtaining valid CODs due to bureaucratic delays and unclear guidelines.
- Electricity Purchase Prices: The prices at which wind and solar energy are sold have been a contentious issue, with investors seeking more favourable terms for profitability.
- Land Use Conflicts: Administrative issues related to land, such as expansion, leasing, and conversion, are impeding the development of wind and solar projects. Overlaps between renewable energy projects and other land uses, like mineral mining and irrigation areas, are also problematic.
Solutions
- Removing Obstacles: Prime Minister Pham Minh Chinh has urged ministries and local authorities to remove obstacles for wind and solar power projects by July 25, 2025. This includes resolving land use conflicts, addressing overlapping plans, and streamlining administrative procedures.
- Task Assignments: The Ministry of Industry and Trade is tasked with coordinating stakeholders and reporting progress. Provincial governments have been given specific deadlines to resolve outstanding issues, such as addressing conflicts between renewable energy projects and other land uses.
- Expansion of Renewable Energy Infrastructure: Vietnam plans to significantly expand its solar power capacity, aiming for 16 GW by 2025 and 30 GW by 2030. This expansion is expected to support economic growth and reduce reliance on fossil fuels.
- Offshore Wind Projects: Despite challenges like high initial investment costs, Vietnam plans to commence its first offshore wind power project by late 2025. The country aims to have substantial offshore wind capacity by 2030, aligning with its renewable energy ambitions.
The government has also agreed to remove difficulties for renewable power projects by November 2024. Moreover, the Ministry of Industry and Trade has been assigned to propose solutions to the preferential electricity purchase price mechanism for wind and solar power projects.
Recently, the PM requested that all remaining problems in wind and solar power projects be resolved before July 25, 2022. The feed-in tariff (FiT) mechanisms for solar and wind power, introduced by the government during the 2017-2021 renewable energy boom, are now at risk through retroactive cuts. A report by the Ministry of Industry and Trade (MoIT) identified 173 grid-connected solar and wind power plants facing this issue.
In a bid to address the issue of electricity purchase prices, EVN has been instructed to unify electricity purchase and sale prices for large-scale rooftop solar power projects on agricultural and forestry land. Germany has also invested 50 million USD in renewable energy workforce training in Vietnam, with the renewable energy workforce training and development centre, invested by Germany's GEO Group, expected to be a cornerstone in shaping Binh Dinh as a renewable energy and innovation hub in central Vietnam.
Rooftop solar has evolved from concept to commitment in Vietnam as the country ramps up its energy transition goals. Domestic and foreign investors owning more than 44 renewable energy projects, and energy associations, have submitted comments and recommendations to the government twice about the difficulties in determining Commercial Operation Dates (COD) and purchasing prices.
[1] https://www.vietnamnews.vn/economy/1043274/pm-orders-ministries-to-remove-obstacles-for-renewable-energy-projects.html [2] https://www.vietnamnet.vn/en/politics/vietnam-to-resolve-land-related-issues-for-40-renewable-energy-projects-by-july-1-696919.html [3] https://www.reuters.com/business/energy/vietnam-plans-first-offshore-wind-power-project-2025-2021-06-21/ [4] https://www.nature.com/articles/s41560-021-00817-w
- The government is addressing ongoing difficulties in the renewable energy industry, specifically concerning Commercial Operation Dates (COD) and electricity purchase prices for wind and solar power projects.
- To support the growth of renewable energy finance, Vietnam has agreed to remove obstacles and propose solutions to the preferential electricity purchase price mechanism for wind and solar projects by July 25, 2025.
