Update 2022: With the International Monetary Fund (IMF) expecting Vietnam’s economy to grow by 6.5 percent in 2019 and 2020, it is only natural that one of the region’s fastest growing countries is turning towards renewable energy to secure its energy needs.
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Vietnam has shown exceptional growth in solar photovoltaic (PV) installations, surpassing expectations and becoming the leader in Southeast Asia’s market. Global energy consultants Wood Mackenzie reported that Vietnam’s cumulative installed solar PV capacity will reach 5.5 gigawatts (GW) this year, a remarkable increase from 134 megawatts (MW) in 2018, representing 44 percent of Southeast Asia’s total capacity.
Furthermore, Vietnam added 4.45 GW of new solar PV capacity between June 2018 and June 2019, and according to Norwegian consultancy Rystad Energy, the average time for construction and commissioning a solar PV project in Vietnam was 275 days. This capacity far surpasses the 1 GW goal for solar PV electricity generation set for 2020, as reported by Vietnamese media in September.
Vietnam Electricity (EVN), a state-owned utility company in Vietnam, reported that 82 plants with a combined capacity of 4.45 GW were connected to the national grid by 30 June, enabling them to participate in the feed-in tariff (FIT) program.
FITs are payments made to renewable energy producers, either companies or households, for each unit of energy they generate for the electricity grid. The growth of the solar PV industry in Vietnam was driven by the announcement in 2017 that projects commissioned before the end of June 2019 would be eligible for a 20-year FIT contract of US$0.0935/kilowatt hour (kWh), leading to a race to initiate projects. Rystad Energy’s renewables team senior analyst, David Dixon, stated that “the commissioned capacity in Vietnam has surpassed our high expectations.”
However, as Rystad notes, grid overload is Vietnam’s main concern moving forward.
With only four solar plants with a cumulative capacity of 150 MW connected to the grid by mid-April, 34 more facilities with a cumulative capacity of 2.2 GW were added by the end of May – and EVN expects the number to rise to 95 by the end of 2019.
Wood Mackenzie, meanwhile, has also warned that EVN – the country’s only utility company – will need to find more free space in the grid or their plants will not be producing to their designed capacity.
In Vietnam’s key provinces, the installed capacity has already exceeded the grid capacity by 18 percent and the approved capacity for the Ninh Thuan and Binh Thuan provinces stand at 5 GW, more than double the grid usable capacity.
Largest floating solar PV installation in Southeast Asia
That is not stopping the country from rolling out more projects though. Vietnam last month announced it would be developing the largest floating solar PV installation in Southeast Asia.
The Asian Development Bank (ADB) signed a US$37 million loan to finance the 47.5 MW facility at the 175 MW Da Mi hydropower plant, and not only will it be the