Vietnam is accelerating the construction of solar power plants to make up for an anticipated power shortfall due to the recent cancellation of two nuclear power projects that had been expected to generate power by 2030.
Thien Tan Group, a Vietnamese construction and engineering company, has announced plans to build five large solar power plants in the southern province of Ninh Thuan at a cost of $2 billion by 2020. A 50-megawatt plant will start operating in 2018, followed by four plants coming online in 2019 and 2020 with each generating 200-300MW of energy.
TTC Group, a Ho Chi Minh City based energy, sugar, real estate, sugar and tourism company, plans to spend up to $1 billion on solar projects to meet the increasing demands for power. The company plans to build 10 to 20 solar parks, with the first one expected to start operations in 2019. The company plans that its 20 solar parks will generate as much as 1,000MW annually.
CEO Thai Van Chuyen said, “Vietnam always needs more power every year for its expanding economy. The recent pricing set by the government is reasonable, development costs are much cheaper and coal-fired power plants have caused so many concerns.”
Other projects in the news …
Japanese electronics giant Sharp has signed an agreement with Vietnam’s Gia Lai Electricity JSC to build a huge 48MW solar plant in Thua Thien Hue Province on Vietnam’s central coast.
Thailand’s Superblock plans to embark on a joint venture with a Vietnamese company to build six wind farms generating 700MW in the southern part of the country by 2019.
The Vietnamese government had planned to build two nuclear power plants with Russia and Japan, but the plan was cancelled in November 2016 due to the hefty up-front costs of several billion dollars for each reactor. Under its new plans, Vietnam intends to produce 10.7% percent of its total electricity through renewable energy by 2030, primarily through solar and wind energy, up from 6% as previously planned.
Investing in renewable energy is an emerging trend in Vietnam, and projects worth billions of dollars in total have been registered across the country. According to a senior energy official at the Vietnamese ministry of industry and trade an increasing demand for energy and limited reserves of fossil fuel are the first reasons for this new investment trend in Vietnam.
With the development of new technologies, the cost of producing clean energy has dropped from 3,500 VND per kilowatt-hour (kWh) to 2,200-2,500 VND.
Newly announced government incentives for solar power projects are another reason for this trend. The government has raised its buying price from 7.8 to 9.35 U.S. cents per /kWh, while offering investors tax breaks and cutting land use fees. With the cost of solar panels falling and the government willing to buy excess solar power, its expected that households across the country will rapidly expand their use of solar energy systems.
The government is trying to nurture solar energy as one the country’s primary sources of electrical output. Currently solar power only accounts for 0.01% of the country’s total power output. The government plans to raise this ratio to 3.3% by 2030 and 20% by 2050.