US project to promote rooftop solar technology, electric vehicles

Announcing the Vietnam Urban Energy Security project, the U.S. Agency for International Development (USAID) said Friday that the project will be carried out from now until 2023.

The project will promote deployment of advanced, distributed energy solutions in Vietnam's biggest city Ho Chi Minh and Da Nang, the major city of central Vietnam.

It will address Vietnam’s rapidly growing energy demand and air pollution in urban areas by working with city governments and creating business opportunities for private companies operating in Vietnam, including creating connections between local firms and American businesses, the U.S. official aid agency said.

In particular, it will support deployment of household rooftop solar technology, next generation battery storage technology, cleaner forms of transportation such as electrical vehicles, as well as other innovative solutions suitable that suit local conditions.

"As such a dynamic economy, Vietnam will require constant innovation in the energy sector in order for the country to provide the capacity it needs for future prosperity and security," USAID Deputy Administrator Bonnie Glick said at the project launching event held in HCMC.

Praising Vietnam for leading the region's solar energy, she said: "We work together to plan for a sound energy future. According to the PDP8, which sets the course for future investment in the decade to come, for Vietnam to truly achieve energy secure, it must diversify sources of generation, invest in cleaner power, such as natural gas and renewable energy and upgrade its transmission infrastructure."

As of September, the registered capacity of solar power projects in Vietnam had reached 25,000 MW, far exceeding the government’s initial target to have 4,000 MW by 2025, according to national power utility Vietnam Electricity (EVN).

Renewables currently account for 9 percent of Vietnam's energy mix, with 89 wind and solar power plants, already surpassing the target of 7 percent set for next year.

By June this year, 4,464 megawatts of solar power generated from 82 plants have been connected with the national grid, according to EVN.

Bui Quoc Hung, deputy head of the Electricity and Renewable Energy Authority under the industry-trade ministry, said the negative impacts left on the environment by the operation of hydropower and thermal power projects is a fact, not to mention rapid depletion of coal.

"As such, the Vietnamese government has been looking at ways and solutions to develop green energy projects, and Vietnam has made a great effort to generate almost 5,000 megawatts of clean energy in a period of less than one year, a significant figure," he said.

But Hung admitted that the path to master green energy has been a tough one, given that Vietnam does not have much experiences, especially in building suitable policy for investors.

He referred to the current situation in Ninh Thuan and Binh Thuan Provinces in Vietnam’s southern central region. The provinces have become the hub for solar and wind energy production thanks to weather conditions with the lowest amount of rainfall in the year.

Following preferential policies for renewable energy projects issued by Vietnamese government, investors have rushed to develop solar and wind projects in the two provinces. Recently, this resulted in an overload as the national grid could not consume such high amounts of electricity at once.

The two provinces alone are home to 38 plants that generate over 2,000 MW per year and the figure is expected to rise to over 4,200 MW by late 2020, which far exceeds the capacity of the transmission infrastructure. Some projects have had to cut their output.

The irony to this overload is that Vietnam has been and will be running into power shortages as its energy demand increases significantly every year.

One explanation offered for this situation is that completing a solar project from scratch takes just four-six months, but it takes two-five years to finish a transmission system.

Hung said Vietnam needs experience from the world community, especially those with long-term experience in the renewable energy sector.

The new USAID project comes at a right time for Vietnam, he said.

Hung said that Vietnam’s demand for electricity might rise to 60,000 MW by 2020, 90,000 MW 2025 and 180,000 MW by 2030. Therefore, there is a lot of work to be done and the country needs a lot of capital investment, he added.

With the nation's power shortage estimated to be 6.6 billion kWh in 2021, nearly 10 billion kWh in 2022 and 15 billion kWh in 2023, the Ministry of Industry and Trade said in July that it was planning to import electricity from Laos and China.

Specifically, Vietnam plans to import 3.6 billion kWh in 2021 and 9 billion kWh in 2023 from hydropower projects operated along the Mekong River.

Added relevance

John Rockhold, Executive Director of the American Chamber of Commerce (AmCham) HCMC and head of Power and Energy Sub Working Group, Vietnam Business Forum (VBF), an ongoing policy dialogue channel between the Vietnam government and business community, said "the Vietnamese government has become more flexible" given all the pressure it is facing now.

With China taking control of hydropower projects along the Mekong River and with what is happening in the South China Sea (East Sea) affecting Vietnam’s gas development and as a result, its gas-to-power projects, Vietnam could ensure its energy security through renewables, he said.

An official with the HCMC Department of Industry and Trade said the city was leading the nation in household rooftop solar systems, and the USAID project would be a timely initiative. He recalled how power consumption hit ten-year record this April following a prolonged heat wave.

The HCMC Power Corporation in February signed contracts with 49 household and business consumers who own rooftop solar power systems in the central Districts of 1 and 3.

So far, these households and businesses have provided four million kWh to the utility and the company has to pay them around VND8.5 billion ($365,000), the official said.

In August, the city inked deals with four industry and agriculture zones to deploy household rooftop solar systems.

Glick said USAID shares Vietnam’s vision of smart cities with innovation that paves the way to the future. She said the new project will not only create technology policy incentives but also serve as a grant fund to spark investment in new technologies and new markets.

Glick is traveling to Vietnam, Thailand, Bangladesh and Indonesia from October 29 to November 12.

Also last Friday, she attended an event presided over by Vietnam’s Defense Minister Nguyen Chi Vinh, marking Vietnam handing over 37 hectares of land at the Bien Hoa Airport for a dioxin decontamination project.

The cleanup project, in what is said to be the area most contaminated by Agent Orange, will start this December in the southern province of Dong Nai, which neighbors HCMC, and will last 10 years.