The Ministry of Industry and Trade has not yet confirmed the complete withdrawal from use of coal-fired thermal power, but is designing a roadmap to reduce the proportion of this kind of power for the nation’s electricity output.

Under a scenario described in the eighth national power development master plan (Plan 8), which is now being compiled, Vietnam would not build more coal-fired thermopower plants from 2026 to 2030.

As of August 23, 45,299 rooftop solar power projects had become operational with total capacity of 1,029 MWp, according to the Electricidty of Vietnam (EVN).

Covid-19 and the slow implementation of power transmission projects may make it impossible for solar power projects to connect to the national grid by the end of the year.

A policy allowing investors to bid on solar power prices is being developed by the Vietnamese Ministry of Industry and Trade (MOIT). It is expected to be submitted to the Prime Minister this August and applied this year.

As current policies are unclear, many solar farm project developers cannot sign contracts on selling electricity to the Electricity of Vietnam (EVN).

Existing legal loopholes have been exploited by many investors taking advantage of incentives given to rooftop solar power projects.

Many solar power plants have managed to get hooked to the power grid early to enjoy the high electricity prices, thus overloading the grid.

As wind and solar power project developers now can enjoy a high FIT (feed in tariff) price, investors are registering more projects to resell for profit.

The total capacity of solar power projects registered by investors has become nearly 10 times higher than the targeted level.

Investment of billions of dollars into renewable energy has been a frequent topic of discussion at recent shareholders’ meetings of power companies.

With the rising prices of electricity pushing many enterprises and households to install rooftop solar panels that partly help reduce electricity bills, the cap on solar power capacity is hindering the process.

The first solar panel, which was invented by French physician Alexandre Edmond Becquerel in 1839, has become a significant watershed for the energy sector in the future. 

Statistics show that the electricity demand is growing at a rate three times higher than that of the electricity output supplied to the market. 

The investment in renewable energy is increasing as fossil fuels, including coal, petroleum and natural gas, cannot meet the increasing demand for energy in Vietnam and the world as a whole given the rapid population growth. 

Tens of solar power projects have been bought by foreign investors through M&A deals.

The Prime Minister’s Decision 13 on solar power projects in Vietnam, which took effect on May 22, will give a push to the development of this kind of clean energy.

Despite bankability concerns inherent in power purchase agreements, investing in renewable power is a bright spot in Vietnam as developers rush to take advantage of the current feed-in tariff. 

The Decision 13/2020 on the development of solar power in Vietnam was released by the government on April 6, 2020.

Vaibhav Saxena, foreign lawyer at Vietnam International Law Firm, discusses how Decision No.13/2020/QD-TTg will impact the Vietnamese solar power market.