Foreign players are rushing to Vietnam’s lucrative solar market
Foreign players are rushing to Vietnam’s lucrative solar market
After the government’s Decision No. 11/2017/QD-TT on supporting the development of solar power was issued in April, Vietnam witnessed a trend of successfully registered and licensed projects, though challenges still await potential investors. Nguyen Duong Tuan, CEO of SolarBK, the only Vietnamese firm invited to the Future of Energy Summit, talks with VIR’s Phuong Thu about SolarBK’s ambitions in Vietnam.
Which obstacles are currently keeping investors from developing solar projects in Vietnam?
In my view, there are two major bottlenecks that make the implementation of solar power projects in Vietnam difficult, namely the mechanisms established in national policy and the technical capabilities of local businesses.
Firstly, under Circular No. 16/2017/TT-BCT on solar power project development and standardised power purchase agreements for solar power projects, a firm only has 20 months for location surveying, licensing progress, and site clearance.
Additionally, the provided tariffs apply only to solar power plants that reach their commercial operation dates (COD) before June 30, 2019, and their application will be limited to a period of 20 years from the COD.
Secondly, local businesses have not been able to keep up with the level of implementation for large-scale solar projects, which raises concerns about the risks of operations. Thus, it takes some time for foreign investors to engage in training and technology transfers while keeping within the timing limits of the law.
Additionally, solar farm projects often require extensive tracts of land, so they are frequently set up in remote areas, which are often far from the grid or do not meet grid requirements.
Therefore, most projects in Vietnam just get as far as the licence. According to the United States Agency for International Development (USAID), hundreds of solar projects were registered to invest in Vietnam by the end of July 2017, with a total capacity of up to 17,000 megawatts (MW). However, how and when these projects are going to be deployed remains to be seen.
Aside from SolarBK’s rooftop projects, the firm has been licensed to build a 4.4MW solar farm in the central city of Danang. Where does SolarBK get the confidence to start a solar farm?
It is quite a small project for its kind, but a giant leap for SolarBK. Our company will not only be the project owner, it will also become the first Vietnamese engineering, procurement, and construction (EPC) company operating a solar farm. Also, the IREX solar panels used will be the first bankable Vietnamese-made module.
Located on a 6.7 hectare plot in Lien Chieu district, SolarBK’s solar farm project is expected to become operational in the first quarter of 2018, helping to reduce carbon emissions by nearly 5,000 tonnes annually. This is a part of SolarBK’s strategy to make Vietnam green.
As you know, Vietnam’s efforts to develop renewable energy are still in their infancy compared to other countries. So with this solar farm, SolarBK wants to improve its EPC capacities, but also establish a scientific research project for Vietnamese partners to learn and improve their skills.
The solar farm’s development will involve a number of international experts and use the latest technology. The Khanh Son area was previously a controversial landfill, bringing with it a lot of issues concerning the environment and quality of life. Therefore, this project will have a positive effect in terms of environmental protection. We are also discussing the application of wastewater treatment technology in the area to both solve the problem of polluted water and preserve water in cleaning the panels.
SolarBK itself has a scientific background. Backed by the leading experts in this field, we desire to develop Vietnam’s green energy market to become a strong sector that can directly compete with foreign businesses. Our vision is to support a greener world with innovative and proactive applications of solar and wind energy.
What are the strengths you can leverage in developing this project?
SolarBK has worked on research and development (R&D) and technology for more than 10 years. We have taken a long time to prepare, which shows the vision and aspirations of the clean energy industry in Vietnam.
SolarBK is currently building a high-tech renewable energy device factory complex in Phu My in the southern province of Ba Ria-Vung Tau. The complex will include a renewable energy factory and a R&D centre for renewable energy applications, with total capacity of 500MWp photovoltaic module factory. The complex is expected to come online in 2018.
SolarBK also has experience in implementing projects in many fields. We are the first Vietnamese organisation to win the Energy Globe Award twice in a row, each time with projects that apply clean energy solutions to improve the living conditions and environment in the Spratly Islands, locally known as Truong Sa. The company has shown its capabilities over the course of a decade implementing large-scale projects on the islands.
In addition, about 3 MWp of photovoltaic rooftop systems have been deployed nationwide by SolarBK, mostly focusing on factories, industrial parks, malls, and other large-scale units, in an effort to develop renewable energy in Vietnam.
What are the incentives for your Solar Farm?
Like other projects, this project is supported by general incentives of current FiT. On the other hand, this is a project having been selected as part of a state-level scientific research project, involving a number of international experts, and using the latest technology. This is also the first Solar Farm project of SolarBK in Danang, marking a new turning-point not only for the development of renewable energy but also for ensuring energy security by being self-reliant in seeking solutions. Thus this project is expected to become a model for for helping policy makers to improve the policy.
