It looks like investors are trying to cash in on incentives for green power projects.
More large renewable energy projects are being registered in Vietnam thanks to lower manufacturing costs made possible in part by the government’s preferential policies.
Given its distinctive climate with a lot of wind and sunshine but low rainfall, the south-central region has emerged as a new hub for clean energy in Vietnam.
Binh Thuan Province in April allowed investors to pour over VND90 trillion ($4 billion) into 20 renewable energy projects.
Highlights among those projects are three wind and solar power plants worth VND13.8 trillion being built by Duc Long Gia Lai Group.
The biggest among the three will be built in Phan Thiet Town. It will have an annual capacity of 200 megawatts (MW) and is expected to cost VND6 trillion.
The company said this is the very first phase of its long-term plan to invest VND30 trillion in clean power from now until 2020.
Power Generation Corporation 3, a subsidiary of the country’s power monopoly Vietnam Electricity (EVN), previously registered a solar power plant with a designed output of 350MW in Ninh Thuan Province.
The company plans to spend VND9.57 trillion on the plant, which is scheduled for completion in early 2021.
Khanh Hoa Province in March agreed in principle for EVN’s Central Power Corporation and a local firm to develop two solar power projects worth VND4.3 trillion.
Last week, Binh Dinh Province also granted a license for Fujiwara Corporation to invest VND1.45 trillion in a solar and wind power plant.
The Japanese company will start work this year and plans to complete the first phase of the project in 2019.
Bamboo Capital, a Vietnamese firm with no previous background in clean energy, has plans to spend $100 million in this field, Deputy CEO Nguyen Thanh Hung told VnExpress.
As planned, the company will build a 140-MW solar plant in the southern province of Long An and seek permission to launch more projects in the central region.
“We expect to be selling clean power within the next year and make it one of our major business by 2020,” he said.
The increasing demand for energy and the limited amount of fossil fuel are the first reasons for this renewable energy investment trend in Vietnam, said Nguyen Anh Tuan, a senior energy official at the industry and trade ministry.
With the development of new technologies, the cost for producing clean energy has dropped from VND3,500 to VND2,200-2,500 per kilowatt-hour (kWh), Tuan said.
“Privileges for solar power project investors are another reason for this trend. The government has raised the buying price from 7.8 U.S. cents to 9.35 U.S. cents/kWh, offered investors tax incentives and cut land use fees,” he said.
Investors in wind power projects will likely have the same incentives in the near future, he added.
Vietnam is trying to generate enough energy for growth and for the millions of people who still lack access to electricity while gradually shifting towards clean and low-carbon energy.
Last year, the government revised down its output target for coal-fired power plants to 53.2 percent of the total power generation by 2030 from the 56.4 percent previously projected.
Vietnam is aiming to produce 10.7 percent of its total electricity through renewable energy by 2030, mainly solar and wind energy, up from the 6 percent previously planned.