Posted on September 14, 2017. Asian News.

Author: Tom Kenning

Source: pv-tech.org

All eyes were on Vietnam this year when it announced a new feed-in tariff (FiT) for solar, PPA template and rooftop net-metering. Big companies, both domestic and foreign, started announcing utility-scale project plans, even after a range of international organisations in the law and finance sectors had expressed concern about the new policies.

PV Tech caught up with Dr. Nguyen Tuan, director at the Renewable Energy Centre, Institute of Energy, Ministry of Industry and Trade (MOIT), Vietnam, to discuss the current state of play for solar in Vietnam. Tuan will be speaking at the Solar & Off-Grid Renewables Southeast Asia event in Bangkok on 20-21 November.

Nguyen Tuan: There was an overhelming response from the solar industry and developers, with a total capacity of more than 1,700MW of solar either applied for, under development or awaiting approval at present. Most of these submissions came after the FiT announcements.What response from the solar industry did MOIT receive after it announced the solar FiT and PPA template?

The majority of the planned projects are concentrated in three provinces: Ninh Thuan, Binh Thuan, and Dak Lak.

Baker McKenzie and a group of International Chambers of Commerce were highly critical of the PPA template. Is there still a strong appetite from investors and does the sector still believe the PPA is bankable?

I think there is very strong appetite as you can see from the amount of capacity under development. The question on bankability is not yet clear; we have to wait and see when all these projects registered come to the next phase of financial negotiation. There are no current plans to change the policies.

Many Vietnamese firms are announcing big solar plans sometimes with foreign partners, but is there still place for foreign firms to enter Vietnam alone?

No, to enter alone I don’t think that is possible. On a separate note, in terms of equipment supply, we already have a manufacturing base in Vietnam from foreign investors, which will contribute to some of the downstream deployment.

Will the monopoly utility EVN dominate deployment or is there still room for other private players?

No, EVN does not play a dominant role for PV development. Other private companies can take a much larger amount of PV capacity.

Do you envision how much utility-scale and rooftop solar you expect to see installed in the next five years?

It depends on continuous support for solar and wind under the feed-in tariff (FiT). I envision a substantial increase in solar, and a moderate increase in wind. A New FiT for wind will be signed very soon. There will be two categories: on-land and off-shore.

What is the biggest challenge for solar development in Vietnam?

MOIT is working on various alternative policies: auction bidding, a Renewable Portfolio Standard and improving power purchase agreements (PPAs).

There are many challenges for solar development in Vietnam and all of them are big challenges: Domestic funding sources are limited and we have high interest rates; international funding sources require a government guarantee; the standard electricity tariff is still low compared to the levelised cost of electricity (LCOE) of PV and wind; there is also innacurate data in this renewable energy field and there is a lack of skilled workers with experience in renewable energy technology.