Vietnam’s remarkable ascent as a leader in renewable energy, particularly solar and wind power, has drawn significant attention from its neighbours in Southeast Asia. In just a few years, Vietnam has transformed its energy landscape, rapidly expanding its renewable energy capacity and setting an example for other ASEAN member states. Let’s explore key insights and lessons that ASEAN countries can draw from Vietnam’s renewable energy boom.
Vietnam’s Renewable Energy Success
Vietnam has experienced a remarkable surge in solar and wind power installations in recent years. The country’s solar capacity grew from just 86 MW in 2018 to over 16.5 GW by the end of 2020. Wind power also saw rapid growth, increasing from 0.2 GW in 2018 to 4.6 GW in 2022.
This is in stark contrast to the rest of its ASEAN neighbours. A 2021 study published in Energy for Sustainable Development noted that “the rate of increase in the solar plus wind share of the electricity mix in Vietnam in 2020 was much faster than that achieved in the broader Asia-Pacific region or the world as a whole. Elsewhere in ASEAN, Malaysia, Singapore, and Indonesia saw smaller increases, while the solar plus wind share of the electricity mix actually declined in Thailand and the Philippines due to relatively stagnant uptake of these renewables and rapid growth in use of other electricity sources.”
Vietnam’s rapid expansion was driven by a combination of favourable policies, including:
- Attractive feed-in tariffs for solar and wind projects
- Streamlined approval processes for renewable energy projects
- Tax incentives and preferential loans for renewable energy investors
Read more: The Rise of Renewable Energy in Vietnam: Opportunities and Challenges
Key Drivers
1. Strong Policy Frameworks Drive Growth
Vietnam’s success in renewable energy is largely attributed to its robust policy framework. The government introduced attractive feed-in tariffs (FITs) for solar and wind power, which provided guaranteed pricing for electricity generated from these sources. This policy certainty was instrumental in attracting both domestic and international investors.
Key Insight: ASEAN countries can benefit from implementing clear, long-term policies that provide financial incentives for renewable energy projects. By ensuring policy stability, governments can reduce investor risk and encourage significant capital inflow into the renewable sector.
2. Public-Private Partnerships as Catalysts
Vietnam’s renewable energy boom was fueled by effective public-private partnerships (PPPs). The government worked closely with private companies to develop large-scale renewable projects. This collaboration not only brought in technical expertise and financing but also accelerated project timelines.
Key Insight: ASEAN nations should foster strong PPPs to leverage the strengths of both sectors. Governments can provide regulatory support and infrastructure, while private entities bring innovation, efficiency, and capital. Together, they can scale up renewable energy projects more rapidly.
Read more: Exploring The Thriving Vietnam Tech Industry
3. Decentralised Energy Models
One of Vietnam’s key strategies was promoting decentralised energy production. The rapid adoption of rooftop solar panels in urban and rural areas allowed for distributed generation, reducing strain on the national grid and providing electricity to remote regions.
Key Insight: Embracing decentralised energy models can be a game-changer for ASEAN countries, especially those with large rural populations. Encouraging the installation of small-scale renewable systems can enhance energy access, reduce transmission losses, and create local jobs.
4. Local Manufacturing and Supply Chains
Vietnam strategically developed its local manufacturing capabilities for solar panels and wind turbines. By investing in the domestic production of renewable energy equipment, Vietnam not only reduced costs but also created a robust supply chain that supported the rapid deployment of projects.
Key Insight: ASEAN countries should consider developing their renewable energy manufacturing sectors. Building local supply chains can lower costs, reduce dependency on imports, and stimulate job creation in the green economy. Governments can offer incentives for companies to establish production facilities within their borders.
Read more: Manufacturing in Vietnam: An Unexplored Goldmine for Global Investors
5. Investment in Grid Infrastructure
As renewable energy capacity grew, Vietnam invested in upgrading its grid infrastructure to accommodate the influx of solar and wind power. The modernisation of the grid was crucial for integrating intermittent renewable energy sources and ensuring stable electricity supply.
Key Insight: ASEAN countries need to prioritise investment in grid infrastructure to handle the variable nature of renewable energy. Modernising the grid will be essential for balancing supply and demand, reducing outages, and enabling the efficient use of renewable energy resources.
6. Community Engagement and Awareness
Vietnam’s renewable energy transition was supported by widespread community engagement and awareness campaigns. The government and private sector actively promoted the benefits of renewable energy, leading to high levels of public acceptance and participation.
Key Insight: Engaging communities and raising awareness about the benefits of renewable energy can build public support and drive grassroots adoption. ASEAN governments should prioritise education and outreach programs to inform citizens about renewable energy’s environmental and economic advantages.
7. Adaptability and Innovation
Vietnam’s renewable energy boom is a testament to the power of adaptability and innovation. The country quickly adapted to changing circumstances, such as fluctuating global solar panel prices, and innovated in areas like floating solar farms to overcome land constraints.
Key Insight: ASEAN countries should cultivate a culture of adaptability and innovation in their renewable energy sectors. Being flexible in policy implementation and open to new technologies can help countries overcome challenges and capitalise on emerging opportunities.
Conclusion
Vietnam’s renewable energy boom offers valuable lessons for ASEAN member countries seeking to accelerate their own green transitions. By adopting strong policies, fostering public-private partnerships, investing in grid infrastructure, and promoting local manufacturing, ASEAN countries can replicate Vietnam’s success. Additionally, embracing decentralised energy models, engaging communities, and maintaining adaptability will be crucial in driving the region’s renewable energy future. As ASEAN countries look to meet their climate goals and ensure energy security, Vietnam’s experience provides a roadmap for sustainable growth in the renewable energy sector.
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