SOLAR ENERGY IN VIETNAM

SOLAR ENERGY IN VIETNAM

–

Potential of solar energy industry –

Policies and investment guidelines

Content

Vietnam RE targets and policy

Solar Energy potential in Vietnam

Barriers and solutions

Investment process guideline for Solar project

Solar targets – Perspective in long terms

PDP VII

(Decision

No.

1208/QĐ-

TTg, 2011)

National Strategy

for Energy

development to

2020, with outlook

up to 2050

(Decision No.

1885/2007/QD-

TTg, 2007)

Strategy for RE

development up

to 2030, with

outlook up to

2050

(Decision No.

2068/QD-TTg,

2015)

PDP VII Revised

(Decision No.

428/QĐ-TTg, 2016)

2020 Solar: N/A Solar: N/A

(RE share is 5% in

total commercial

primary energy).

1.4 TWh (0.5%) Solar: 850 MW, and

account for 0.5% of

total electricity prod.

2030 Solar: N/A - 35.4 TWh (6%) Solar: 12.000 MW and

account for 3.3% of

total electricity prod.

2050 Solar: N/A Solar: N/A

(RE share of 11%

in total).

210 TWh (20%) N/A

Main directive policy for RE dev.

2007

• Nat. Strategy for Energy dev. to 2020, with outlook to 2050

2008

• Establish ACT and SPPA for RE power projects

2011

• PDP VII

• FIT for Wind power projects

2014

• ACT (Avoided Cost Tariff) for Hydro

• FIT for MSW

2015

• Strategy for RE dev. up to 2030, with outlook to 2050

• ACT for biomass

2016

• Revised PDP VII with higher targets for RE

2017

• Incentive (FIT) for solar PV projects

New policy instruments were proposed

Sustainable Energy Development Fund was mentioned

PPA of the type “Take or pay”; Recovery through increasing

electricity tariff.

Renewable Portfolio Standards (RPS) for Generator >1000MW and

for Distributor:

• By 2020: >3% (>5% for distributor)

• By 2030: >10%

• By 2050: >20%

Net Metering was proposed

However, we need more elaboration on implementation,

roadmap, degree and enforcement.

Vietnam RE policy – new proposed instruments

Vietnam support mechanism for solar power projects (FIT)

• With grid-connected Solar project: at delivery point is 2.086 VND/kWh (excluding VAT,

equivalent to 9.35 US Cents/kWh).Adjusted to the fluctuation in VND/USD exchange rate

+ Solar cell efficiency requirement >16%, module is >15%

• Power purchase obligation: EVN shall have to purchase the whole electricity generated from

the grid-connected solar energy projects and roof-top solar energy projects.

• 20 years PPA

• All solar energy projects are entitled to the following the incentives:

+ Investment capital: have the preferential in investment credit as in the prevailing regulations.

+ Import tax: exempt from import tax for imported goods that form fixed assets for the

projects, imported goods which have not locally manufactured as in the prevailing

regulations.

+ Corporate income tax: solar energy projects listed in the field of investment incentives are

corporate income tax exemption and reduction as in the prevailing regulation.

+ Land: exempt and reduce of land use fees, land rent and allocated by the provincial

People's Committee for land area to the project.

Solar Energy in Vietnam

Vietnam is considered a nation with high solar potential, the average sunshine at 150 kcal/m2 is between 2000-4200 hours.

The intensity is lower in the North at about 4 kWh/m2 due to the annual winter-spring cloudy and drizzle sky but inthe central and southern regions, radiation is above 5 kWh/m2

Applications for Solar energy in Vietnam: thermal and electrical power

The most popular solar energy applications in Vietnam is solar water heating which installed in households, hotels as well as industrial scale

Technology applied for electrical conversion is Photovoltaic (PV) stand-alone and grid-connected scale

Total PV installed capacity in Vietnam is just only about 5 MW, the share of PV system is too small only 0.014 %(5/38.500 MW) by end of 2015

Stand-alone PV system: 4 MW is installed in rural and mountainous and remote areas

Grid-connected PV system: less than 1 MW (rooftop and mini hybrid system)

17.04.2016

Solar mapping developed (21 Jan 15)An important activity within the framework of TA

Project, supported by Spain Gov. This is also an

important basis to help state agencies to develop

policies, planning, helping investors find places

with good sunshine hours to implement projects. Large solar potential, especially in the south

region

II. Solar Energy in Vietnam - mapping

Solar energy potential in Vietnam

Economic potential (varies according to the costs and incentive assumptions): 10,000MW (2015)

Currently registered (added into PDP national and provincial) : close to 1,500MW (April 2017).

Area

Tiềm năng lý

thuyết (Theoretical

potential), MWp

Tiềm năng kỹ thuật

(Technical Potential), MWp

Đồng bằng sông

Hồng (Hong Delta

river)

613,906 30,695

Trung du và miền núi

phía Bắc (Highland

and mountainous in

the North)

2,033,466 101,673

Bắc Trung Bộ và

duyên hải miền Trung

(Noth of central and

Coastal areas)

2,132,840 106,642

Tây Nguyên

(Highland central)808,973 40,449

Đông Nam Bộ

(Eastern of South

region)

397,493 19,875

Đàng bằng sông Cửu

Long (Mekong river

delta)

805,880 40,294

6,792,560 339,628

II. Solar Energy in Vietnam – few demo and pilot projects

200 kWp PV system at Intel Hi-tech SHTP in HCM city

With annual production 321 MWh/year, used Sunpower module

Investment: 1,1 million USD (2012) by Intel


212 kWp on the rooftop of car parking at Big C Supermarket buildings in Binh Duong province

Annual production: 230 MWh/year and reduce of 150 tons CO2/year

Investment: 11 billions VND ( about 550.000 USD according to exchange rate in 2012)


22 kWp on the rooftop ofMoIT buildings in Ha Noi and

36 kWp on Con Dao island.

• Annual production is 24 MWh and 51,5 MWh respectively

• Investment: 220.000 Euros fundedby Spanish government

The first PV solar power

plant, 19,2MW –grid

connected has just ground-

breaking ceremony dated 29

August 2015 in Quang Ngai

province (center of VN).

The plant is built on a 24 ha

area with a total investment

of VND 826 billion. The

work is expected to connect

national grid in mid-2016

(not yet).


17.04.2016

Three PV assembly factories in someareas

• Long An province: 12MW/year (Redsun)

• Da Nang city: 150MW/year (IREX - Solar BK)

• Bac Giang province: 150MW/year (Bo Viet/Boway)

II. Solar Energy in Vietnam – Manufacturing capability

Market

17.04.2016

Domestic uses (small share)

Export (large share)

III. Barriers and solutions - some ideas for thoughts

Barriers

• The huge up-front cost of PV systems is the key reason hindering the solar development in Vietnam

• Cost of electricity generated from PV is still high in comparison with others traditional resources (the average retail selling price is 1.622 VND/kWh which is approximate 7,2 US cents/kWh)

• No special tariff for Solar energy (not approved yet)

• Difficulty and uncertainty in the system connection

• Lack of skilled professionals and engineers in the Solar field

• Lack of information/ reliable database for assessing potential of RE sources

• Potential constraint on land resource for PV power project (about 1-1.4 ha/MW)

Solutions

• Develop suitable mechanism, policy to promote Solar industry

• Establishment of RE funds to support RE projects including Solar

• Organizing training courses, cooperate with university to support skilled engineers demand in RE (include Solar)

IV. Investment process guideline for Solar project

Develop a Solar power project in Vietnam

Phase I: Preliminary

Development

Phase II: Development

Phase III: Implementation

Phase IV: O&M

Phase V: Decommissioning

For PV project with capacity is up to 50 MW, investor need to apply for the addition into the provincial power development plant

If the project scale is over 50MW, investor need to apply for the addition into the national power development plant

Phase I: Preliminary Development – if the project was in PDP

Site Identification and selection

Pre FSDecision oninvestment

Investment

certificate

Developmentstage

PrincipalPPA

acceptance

Phase I: Preliminary Development – if the project was not in PDP

Site Identification

Is the site already included in power

development plant?

If NO: Check site availability

Site exclusivity

Temporary land lease

Collection of Solar data

Pre-FSRequest for

inclusion inPPDP

Acceptance for the project to be

included in PPDP

Phase II: Development

FS

Various agreements & acceptance (Grid connection; Metering; SCADA EMS; Protective relay system; Fire

fighting; EIA; Preliminary PPA

PPA and implementation stage

Technical Design

Comments on TD => Acceptanceletter

Construction permit; Land Usecertificate

Phase III, IV, V: Implementation, O&M, Decommissioning

Commissioning/Testing

Electricity Generation License O&M Decommissioning

Construction Operation license

Detailed design Land clearance Financing

Thank you for your attention

By

+ Dr. Nguyen Anh Tuan, Director of Center for RE, Institute of Energy Vietnam (IEV)

Contact emails : [email protected]

mailto:[email protected]

Data & Analytics

SOLAR ENERGY IN VIETNAM