The World Bank and the Vietnam’s Ministry of Industry and Trade (MoIT) have joined hands to implement a pilot auction program for solar projects.
According to a local media report, the program is aimed at accelerating the development of registered projects, while simultaneously attracting new capital investment in the emerging solar sector of Vietnam.
This plan was announced by Tran Hong Ky, energy expert of the World Bank, at the inception workshop themed “National Assessment of the Development Potential of Grid-Connected Solar Photovoltaic Projects in Vietnam until 2020 with a Vision to 2030,” organized recently in Hanoi.
The workshop was jointly implemented by the Power and Renewable Energy Agency under the Ministry of Industry and Trade (MoIT), and Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ) on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).
According to the plan, the Vietnamese government will issue set capacities and interested developers can bid with complete project plans along with feed-in tariff. The winner offering the lowest price will be awarded the project. It is presently unclear how much solar capacity will be made available for the investors under this program.
Vietnam has attracted the interest of foreign companies to invest in the solar sector after the launch of the country’s feed-in-tariff program in June of this year, which offers a new 20-year FIT rate of VND2,086 per kWh (not including value added tax), equivalent to 9.35¢/kWh to support the development of utility-scale PV projects.
Companies in Vietnam are slowly warming up to renewable energy technologies. Last year, a company proposed to set up 100 megawatts of solar PV in the Quang Tri province. Canada’s CMX Renewable Energy announced plans to invest $150 million to set up a solar power project in the province of Ninh Thuan.
Renewable energy majors, including JA Solar and GE, had also announced plans to set up base in the south-east Asian country.
JA Solar Holdings announced plans to set up its largest overseas solar modules manufacturing factory in Vietnam. The factory will be spread across 88 hectares at Quang Chau industrial zone. The company is expected to invest $1 billion to set up the factory. GE signed an agreement with the government of Vietnam for the development of 1 gigawatt of wind energy capacity.
This solar power auction program will likely play a huge role in Vietnam’s attempt to achieve its renewable energy targets.
According to the current national plan, the government plans to increase hydropower capacity from 17,000 MW at present to 21,600 MW by 2020 and 27,800 MW by 2030. Wind energy capacity is envisaged to be increased from current 140 MW to 800 MW by 2020 and 6,000 MW by 2030. The government has set a target to increase installed solar power capacity from current 850 MW to 4,000 MW by the end of this decade and 12,000 MW by the end of next.