Vietnam and Denmark promote clean energy development

Recently, the Ministry of Industry and Trade of Vietnam has cooperated with Denmark on clean energy development. Denmark has contributed to provide an important foundation for economical and efficient use of energy in Vietnam.

Another important cooperation content of the Vietnam – Denmark Energy Partnership Cooperation Program is the biennial publication of the Vietnam Energy Outlook Report. This report emphasizes energy efficiency as a cost-effective tool for Vietnam’s green transition to 2030 and 2050 and recommends investment in energy-saving technologies because of this technology will be more cost effective due to the significant savings in fuel costs. Economical and efficient use of energy has many benefits, including major benefits to society such as reducing environmental pollution and enhancing national energy security.

Vietnam is a country with the potential to develop clean energy such as wind energy, solar energy, tidal energy, … with the advantage of being a country adjacent to the sea, near the equator, with high hours of sunshine in a year, these are enough for Vietnam to become a country with a sustainable clean energy base. However, due to many objective factors, Vietnam has not been able to make good use of this resource. The limitation in science, technology, engineering and finance makes the clean energy sector in Vietnam not really focused on development.

Denmark is a European country with many years of experience in clean energy development. After many years of researching the clean energy market in Vietnam, many Danish investors have found the benefit and the ability to develop this field. With the goal of developing clean energy, providing energy efficient and safe platforms. Meanwhile, Denmark has many companies in wind and solar power and is very interested in market entry into Vietnam market through setting up company, or manufacturing in Vietnam.

In addition, Danish investors also promote development, investment cooperation, building smart city in Vietnam, apply science and technology applications and clean energy to build and develop a sustainable way. Therefore, this is an opportunity for Vietnam to attract energy investment from Denmark and also an opportunity for Danish investors to invest in Vietnam. In the coming time, Vietnam hopes to have more investors from Denmark implementing energy development projects in Vietnam so that they can reap high returns for both investors and Vietnam in the future.

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Solar Power Projects Appear More and More in The Central Region: Foreign Contractors Take Advantage

The Central Coast from Quang Ngai to Ninh Thuan is becoming a huge solar power construction site with a series of projects being groundbreaking and starting construction, in which foreign contractors make bold marks.

In the second half of 2018 and the early days of January 2019, a series of solar power projects were started in the Central region, with the most concentrated in Quang Ngai, Binh Dinh, Phu Yen, Khanh Hoa and Ninh Thuan.

Ninh Thuan attracts the most solar power projects in the country. According to the Department of Planning and Investment of this province, in the second half of 2018, there were 15 solar power projects taking steps to build. The number of projects to start construction continues to increase in the first half of 2019, because according to Vice Chairman of Ninh Thuan province, the provincial People’s Committee has issued decision on investment policies for 30 projects, with a total capacity of 1,788.79 MW.

Among the solar power plants that have started construction and are targeting the national grid before June 2019, there are projects such as CMX Renewable Vietnam of Re Sun Seap Vietnam Solar Power Joint Stock Company; My Son Solar Power Plant; Phuoc Huu Solar Power Plant; Solar Power Bim 1, Bim 2, Bim 3…

In Binh Dinh, many solar power projects have been present, such as Cat Hiep Solar Power Plant (Phu Cat District), Solar Power Plant combined with wind power of Fujiwara Joint Stock Company (Japan)…

In Phu Yen, according to Vice Chairman of Phu Yen People’s Committee, there are 7 projects in this province approved by the Ministry of Industry and Trade into the Electricity Plan VII. In which, 6 projects have been granted investment policies by the province.

Sterling Wilson, India’s leading solar power consulting and construction corporation, has completed the construction contract (EPC contract) for Sao Mai solar power plant project of Sao Mai Group, worth nearly 80 million USD (phase I).

Many power projects in Vietnam have the imprint of Power China Kunming Engineering Corporation Limited Consortium (Power China – a contractor from China), such as Package 7 on design, supply of equipment and materials, construction and installation of Vinh Tan 2 Solar Power Plant (EPC bidding package) under the Vinh Tan 2 Solar Power Plant Project, which is undertaken by Sinohydro Corporation Limited – Power China Kuming Engineering Corporation Limited Consortium.

Power China is also the contractor implementing the important bidding packages of Hong Phong 1 and Hong Phong 2 renewable power projects, under Vietnam Trading Engineering Construction Joint Stock Corporation (Vietracimex).

This is also the contractor participating in the implementation of bidding package DMS-8 on designing, supplying, installing and testing photovoltaic equipment under Da Mi solar power plant project; participating in implementing the package at Song Bung 4 Hydropower Plant Project (Quang Nam)…

Meanwhile, Binh Nguyen Solar Power Plant Project (Quang Ngai), which is led by Hawee as EPC general contractor, associated with Sharp Solar Solution Asia (SSSA – Japan) – Hawee IDC designed, constructed and installed.

As acknowledged by a number of reputable construction corporations in Vietnam, Vietnam’s solar power market is witnessing a wave of participation of foreign contractors, with a huge bid value for construction, installation, equipment, technology…, even a project signed contract under the form of turnkey contract with total project value of up to 80%.

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Progress of Solar Power Plant Projects Approval up to June 2019

It appears that the implementation plan of national power has revealed a number of difficulties and limitations. In particular, many power projects have encountered slow progress compared with the plan, especially power projects in the South such as Long Phu I, Long Phu II, Song Hau I, Song Hau II, Vinh Tan III …

The development of coal-fired thermal power sources is facing the increasing demand for environmental protection as well as the requirement of import infrastructure, coal supply for factories. Accordingly, the Ministry of Industry and Trade has to report the situation of development of solar plant project to the Prime Minister for monitoring and encouragement with goal of development of sustainable energy supply.

The government would consider getting more solar power plant projects added to the national power development plan, with consideration to fairness and transparency in planning management, ensuring the suitability of power supply requirements, grid connection possibility and the effectiveness of use of land for power projects.

In the coming period, the National Power Development Plan will be supplemented only in the revised National Power Plan VII for the solar power plant projects completed the appraisal and approval stages, including the BIM2 solar power plants (250MW) in Ninh Thuan Province, Phu My (330MW) in Binh Dinh Province.

The Ministry of Industry and Trade is responsible for the appraisal of the solar power project, especially the calculation determining the necessity to supplement the adjusted National Power Plan VII, the capacity of the projects, the feasibility of to make investment in construction and conformity with the current provisions of law on the solar power development.

According to the report of the Ministry of Industry and Trade, the total capacity of the solar power projects approved in addition to the power development plan reaches over 3,000 MW in 70 projects to be put into operation before June 2019 which has far exceeded the projected plan of solar power development expected to 2020 in the National Power Development Plan VII, which was adjusted by the Prime Minister.

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Korean Capital Flows into Renewable Energy

Vietnam has issued many policies and incentives for the development of the power sector. This is a good time to attract foreign capital into Vietnam energy industry, including those from Korea.

According to Mr Nguyen Van Vy, Vice Chairman of the Vietnam Energy Association, with the goal of raising the proportion of electricity produced from renewable energy to 32% by 2030 and 43% by 2050, Vietnam currently has about 50 wind power projects, more than 100 solar power projects and many other biomass energy development projects are under study.

Meanwhile, according to the National Electricity Development Plan 2011 – 2020 with a vision to 2030, Vietnam will accelerate the development of electricity production from renewable energy and reduce the proportion of hydropower.

In order to realize these objectives, Vietnam has promulgated many policies and incentives to encourage the development of renewable energy, such as investment credit, import tax, export tax, enterprise income tax, exempt land use fees and land rents for renewable energy projects, provide financial support for scientific and technological research activities on energy. At the same time, calling for investment and receiving science and technology to develop the domestic electricity equipment industry.

More recently, many Korean businesses have come to the provinces to look for investment opportunities in renewable energy projects, such as IL Yang Industrial Co., Ltd., proposed to Quang Tri province to invest in building solar power plant in Hai Lang District (capacity 500 MW) and Vinh Linh District (capacity 200 MW); Or VTC company, after inquiring in Bac Lieu province, they are preparing large capital for wind power project and if approved, they will quickly expedite the necessary procedures as prescribed.

At the Vietnam – Korea Renewable Energy and Power Industry Forum recently held in Ho Chi Minh City, according to Mr Paik Un Gyu – Minister of Commerce, Industry and Energy of Korea, the two countries have long-term cooperation potential in the fields of energy, renewable energy and smart grid.

According to Mr Paik Un Gyu, Korea will actively invest in power generation and renewable energy development projects in Vietnam as a strategic partner. In addition, Korea also supports the training of human resources and technology transfer to develop internal power and renewable energy in Vietnam.

On this occasion, at the 8th Session of the Vietnam – Korea Joint Committee for Cooperation in Nuclear Power, Energy, Industry and Trade, the two sides agreed on a number of bilateral cooperation. In particular, there are many cooperation in the field of energy, such as cooperation in projects to build power plants in the form of BOT; cooperation in the field of oil and gas; cooperation in renewable energy; cooperation on energy security management; development cooperation in supporting industries…

This is the basic content for the two countries to develop and implement concrete and practical projects to further develop cooperation in the fields of industry, trade and energy in 2018 and the coming years.

According to Korean businesses, now is a good time for enterprises to learn about the strategy and planning for development of electricity and renewable energy as well as contact and exchange directly with the leading enterprises of Vietnam. Accordingly, enterprises of the two countries can consider the possibility of cooperation in various forms, such as joint venture investment in the development of power projects, cooperation in providing technology, equipment and specialized materials.

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Changes needed for Development on Wind Energy in Vietnam

Changes needed for Development on Wind Energy in Vietnam

For economic sustainable development combined with environmental protection, the Government of Vietnam has made significant steps in the formulation of policies on renewable energy development, which take advantages of favorable conditions for the production of wind energy.

Many policies have been initiated to support wind power project, including power price assistance from central budget; assistance to grid and off-grid connected wind power projects… focusing on wind power electricity development target to achieve the total wind power capacity from the current negligible level to around 800 MW by 2020 and around 6,000 MW by 2030, raising the rate of electricity from wind power accounted for 0.8% in 2020 to 2.1% in 2030.

Some financial policies for investment projects under the Clean Development Mechanism (price supporting mechanism) are issued. Moreover, the Government published independent mechanisms to support wind power projects on electricity price for grid-connected wind power projects, power purchase agreements for wind power projects.

Nonetheless, there are difficulties in the development of wind power projects in Vietnam that should not be ignored. The first thing is difficulty of legal framework. The system of legislation, mechanisms and policies for wind power development are not synchronized. New project must be granted by the Ministry of Industry and Trade to establish the supplementary planning procedures prior to implementation. Power purchase agreement with EVN will be required as the initial condition to obtain investment permission.

Moving toward the future of clean energy in Vietnam, the Government should focus on implementation of preferential treatment to wind energy projects to increase the competitiveness of this renewable energy. In addition, the Government should also collaborate with investors, and industry experts to continue to research the wind power potential in Vietnam, further attract investment and assistance from domestic and international organizations for the wind power projects. Further, it is in the meantime required to have synchronized policies, legislations with the establishment of government authority to execute wind power planning and management to remove unreasonable barriers.

The increase in purchasing price from EVN will be attracting more investment. It has been discussed on the increase of buying price from 7,8 US cent/kWh however the timeline for the increase has not yet been finalized.

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Shinhwa Group E&E (Korea) Invested in Solar Water Project in Quang Tri

Shinhwa E&E Co., Ltd (Korea) has conducted the survey and agreed to select the location of Trieu Thuong 1 and Trieu Thuong 2 lakes (Trieu Phong district, Quang Tri province) to implement two energy projects sun on the water in Quang Tri Province.

On January 24th, Shinhwa E&E Co., Ltd (Korea) had a meeting with Quang Tri People’s Committee on the occasion when the delegation come to explore opportunities for cooperation and investment in solar projects on the water in the province.

At the meeting, Shinhwa E&E Co., Ltd said that earlier, through the survey, the delegation has basically agreed to choose the location is Trieu Thuong 1 lake with a water surface of 35 hectares, which is expected to construct the solar power projects on the water with capacity of 20 MW; the Trieu Thuong 2 lake area with a water surface of 56 ha is expected to construct the solar power project on the water with capacity of 30 MW. Shinhwa E&E is expected to launch the project in two lakes Trieu Thuong 1 and 2.

Speaking at the meeting, the Vice Chairman of Quang Tri Provincial People’s Committee said that this is an interesting field. If Shinwa E&E Co., Ltd intends to invest, the province is very welcome and willing to create every favorable condition for the company to survey and implement the project.

Vice President Nguyen Quan Chinh assigned the Department of Industry and Trade to support Shinhwa E&E Company in the process of researching to implement the next steps in accordance with the law of Vietnam.

Also at the meeting, the two sides have signed a memorandum of understanding on the implementation coordination of solar power projects on the water in Quang Tri province. Accordingly, Shinhwa E&E Co., Ltd will study the investment location of solar power projects on the water in order to compile the supplementary plan of the project into the electricity planning of Quang Tri province. Moreover, Shinhwa E&E Co., Ltd is responsible for all expenses related to the survey, technical report and project development.

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Finland Poured 33 Million USD into Clean Energy Projects in Vietnam

Watrec Company has just started to invest in Vietnam with a clean energy project, investment capital of 30 million euros (over 33 million dollars) in Hanoi.

Specifically, the project is converting energy from waste with the processing capacity of the plant about 600 tons of waste per day. The project is a comprehensive solution for collecting urban solid waste, classifying and converting it into biogas, as well as other combustible materials to produce electricity. At present, Watrec is in the process of negotiating with partners to finalize the allocation of funds for the project.

Watrec is the leading biogas technology company in Finland, handling 315,000 tonnes of organic waste each year at its plant-building chain. The project in Hanoi aims to manage the mixed waste that has not been classified and treat urban solid waste.

According to FinPro’s representative, Vietnam has the potential to develop clean energy projects from urban waste and agricultural and forestry waste.

FinPro focuses on converting waste into energy and bioenergy in Vietnam for about 2 years. Therefore, FinPro understands the potentials and challenges in converting waste into energy in Vietnam.

In fact, in recent years, many Finnish companies have invested and implemented projects in this field in Vietnam and have made positive progress.

For example, Doranova has one of the largest projects with a landfill disposal facility worth 6m euros under construction in the outskirts of Ho Chi Minh City, aiming to convert 35,000 tonnes of waste into energy.

Nearly a year ago, Doranova is one of the Finnish companies to undertake a project to convert waste into energy in Binh Duong. Accordingly, this project will recover the gas from the landfill and treat, supply the biogas to the power plant with a capacity of 1.6 MW.

Regarding the investment and construction of clean energy projects, according to representative of Valmet, the leading company in Finland, Vietnam is Valmet’s investment priority. From the investment realm, deploying projects in this area, Valmet’s representatives made 3 recommendations. First, it is necessary to determine the feasibility of the project by identifying the source of input waste from the plant. The second is about the fee collected from the garbage carrier to the processing plant. Third, it is necessary to consider electricity price lists when selling to EVN.

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Super Energy Invests in 4 Solar Power Projects | ANT Consulting

The Board of Directors of Thailand’s Super Energy Corporation Company Limited (Super Energy) in late March 2020 sent a letter to the Thai Securities Commission announcing the decision to spend 456.7 million USD to set up business in Binh Phuoc, specifically into 4 solar power plant projects, including Loc Ninh 1 (200 MW), Loc Ninh 2 (200 MW), Loc Ninh 3 (150 MW) and Loc Ninh 4 (200 MW) in Binh Phuoc province (Vietnam). 

Previously, when approving this investment in the meeting on March 25th 2020, the Board of Directors of Super Energy stated that the above projects will help enhancing the business competitiveness of the enterprises. 

According to the announcement, the investment in Loc Ninh 1 is 99.7 million USD; in Loc Ninh 2 is 140 million USD; in Loc Ninh 3 is 105 million USD and in Loc Ninh 4 is 112 million USD. 

Specifically, only 72.9 million USD is planned to buy shares. Currently the first payment took place with the amount of 5.732 million USD. The remaining payments will be accompanied by detailed conditions such as when there is a land lease decision, construction permit, grid connection contract, land use right certificate, or certificate of eligibility for commercial electricity generation with the purchase price of electricity of 7.09 UScents/kWh… 

Thus, the remaining amount (383.8 million USD) is for the implementation of specific project construction.

The 456.7 million USD investment of Super Energy in 4 projects is estimated at 26.23% of the Company’s total assets. 

According to solar investors, the acquisition of projects or shares in this field is quite popular in recent years, because foreign investors want to shorten the time to process procedures in Vietnam because they are often not as fluent as the local businesses. 

Due to its experience in all fields and industries, and local understanding, many Vietnamese private enterprises have certain advantages in persuading the authorities to supplement the project that they proposed to the Power Planning when the competitive bidding mechanism to select project developers has not been applied since the Decision 11/2017/QD-TTg on solar power development, which was issued on April 2017.

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