Deputy Minister of Industry and Trade Cao Quoc Hung, speaking at a recent conference on low-carbon energy, said in 2018 investors sought to build solar power projects adding up to 10,000 MW.
Of them, 121 with a capacity of 8,100 MW were approved for construction, and 100 of them have already signed power purchase agreements with distributors, he said.
"Vietnam is witnessing a wave of investment in renewable energy. The sheer number of projects approved show that this field is currently very attractive."
Another 220 projects are awaiting approval, he added.
Of the approved projects, two with 86 MW capacity each are already producing electricity. Just a few days ago a 100 MW cluster of solar power plants was inaugurated in the Central Highlands province of Dak Lak.
Vietnam also has eight wind power plants with a total capacity of 243 MW and 10 biomass plants with 212 MW. Renewables only account for 2.1 percent of the total power generated.
The national electricity development plan approved by the Government envisages total power output reaching 130,000 MW in 2030 from 47,000 MW currently. This means around 83,000 MW of capacity would need to be added along with the requisite distribution infrastructure.
The development of clean energy sources will be crucial when Vietnam’s economy is expected to grow at a 6.5 – 7.5 percent clip.
However, Ministry of Industry and Trade officials warned rapid development of renewable energy would also face many challenges like high investment costs, limited power grid infrastructure capacity, need for large tracts of land, and difficulties related to the control and regulation of electricity systems.
According to Deputy Minister Hung, power demand has often been growing at 1.8-2.0 times the GDP growth rate (7.08 percent last year), putting great pressure on finances, and a programme to address these challenges is needed.
Vietnam currently relies largely on hydropower and thermal power for its electricity needs, but its hydropower potential is almost fully exploited and oil and gas reserves are running low.
According to World Bank country director for Vietnam Ousmane Dione, demand in the country will grow by about 8 percent a year for the next decade, meaning Vietnam might need $150 billion by 2030 to develop its energy sector.