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Why are foreign investors interested in Vietnam's electricity industry?

Maintaining FIT prices for those who failed to meet deadline and reimplementing nuclear power projects were among issues raised by foreign investors at the Vietnam Business Forum 2022.

 

Hệ thống năng lượng mặt trời trên mái nhà của Tập đoàn Toyota Boshoku - nhà sản xuất hệ thống nội thất ô tô cao cấp trên thế giới có nhà máy tại tỉnh Vĩnh Phúc
 

 

Associate members of the Vietnam Business Forum (VBF) include the Singapore Business Association, Australian Business Association, Swiss Business Association, Taiwan Business Association, Thai Business Association, Hanoi Young Business Association, Indian Business Association, Hong Kong Business Association and Canadian Business Association in Vietnam. They proposed that the Vietnamese Government continue to develop renewable energy, improve energy efficiency, and promote energy storage technology by batteries and hydrogen energy.

Accordingly, in line with the commitments at COP26, foreign investors also believed that Vietnam will need to consider trends and opportunities in renewable energy in the upcoming version to complete the Power Master Plan 8 as well as in a number of other master plans and mechanisms to implement the power planning.

Michael R. DiGregorio, Head of the Environmental Working Group, said that under the draft Carbon Border Adjustment Mechanism submitted to the EU Parliament, importers would have to purchase emission quotas for the amount of carbon in 30 commodity categories, at a price equal to the weekly average price of similar emission quotas in the EU.

The development of Vietnam's emissions trading system (ETS) and carbon market will play an important role in this transition.

Also in 2022, the Electricity and Energy Working Group will develop a plan for energy production in Vietnam (version 3.0), which focuses on supporting the private sector in the implementation of Power Plan 8.

"Clear regulations are needed for wind power farms that are still under construction and cannot be operated commercially before the set deadline to enjoy the preferential FiT pricing mechanism due to the Covid-19 pandemic". This is the proposal made by many foreign business associations at this year's VBF.

According to the announcement of the Ministry of Industry and Trade, the capacity of wind power projects that have been added to the planning is currently 11,921 MW. Of these, 146 projects have signed power purchase agreements (PPAs) with a capacity of 8,171,475 MW.

The projects and parts of projects that have come into commercial operation (COD) in the period from 2011 to October 31, 2021 are 84 projects with a total capacity of 3,980,265 MW. Among these, there are 15 projects with partial COD capacity of 325.15 MW and total non-COD capacity of 1,031.1 MW.

The American Chamber of Commerce (AmCham) also said that the Government should issue policies to continue to support this sector - including support for projects experiencing construction delays due to Covid-19 and develop a new auction mechanism for further growth.

Offshore wind power offers great potential with both fixed bottom and floating capacity estimated at around 600 GW. AmCham also advocated for the increased offshore wind energy in Power Master Plan 8. Accordingly, these offshore wind complexes should be developed with green storage units to support the transition to a carbon-free future.

American businesses also announced their support for Power Plan 8 using direct electricity purchasing and off-grid power supply for wind and solar, as well as future direct power purchase agreement (DPPA) mechanisms that will allow the private sector to meet global zero-carbon policies when investing in Vietnam.

Along with the proposal to suspend approval of new coal power plants in Power Plan 8, foreign investors also believed that gas can play an important role as an important transition fuel and help Vietnam get rid of coal as fast as possible.

The recommendations of the foreign business community also mentioned the need to soon consider the role of battery energy and hydrogen energy storage in the new context of the electricity market.

The Korean Chamber of Commerce (KorCham) has a proposal related to nuclear power.

Given the fact that a stable power supply is very important for economic development, Korean businesses also agreed with Vietnamese Government's electricity policy in the direction of accelerating the expansion of new energy projects. and renewable including solar power.

However, KorCham said that to support the expansion of renewable energy sources, it is not only necessary to expand the power transmission network but also to have a basic power source to ensure stable and uninterrupted power production.

"In the medium and long-term vision, there is a need for an in-depth assessment of the need to redeploy Vietnam's nuclear power generation projects, which has been paused for discussion before," remarked Kotra.

Korea has a lot of experience and know-how in the field of nuclear power generation and export, so Korea can cooperate with the Vietnamese Government to aim for a stable power supply in the future.

Dau Tu

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