After renewables frenzy, Vietnam’s solar energy goes to waste | Energy

Ninh Thuan, Vietnam – For as much as 12 days each month, Tran Nhu Anh Kiet, a grocery store proprietor in Vietnam’s Ninh Thuan province, is pressured to show off his photo voltaic panels throughout essentially the most profitable peak sunshine hours.

“I’m shedding on common 40 % of output,” Kiet informed Al Jazeera, referring to the photo voltaic panels he put in on the roof of his retailer so he may promote energy to the nationwide grid.

“Earlier than the curtailments, our income was 100 million Vietnamese Dong [$4,136], now it’s simply 60 million Vietnamese Dong [$2,589].”

If Kiet didn’t shut them off of his personal accord, the state energy firm would “come and disconnect them as a substitute”.

Throughout southern Vietnam and the Central Highlands, authorities are asking small-scale vitality producers like Kiet and industrial photo voltaic farms alike to restrict their operations as a result of infrastructure limitations.

After an unprecedented increase in renewable vitality funding lately, the transmission strains that join photo voltaic and wind tasks to the nationwide grid lack the capability to cope with spikes in provide.

Policymakers haven’t been capable of sustain both, leaving regulatory gaps that forestall some buyers from monetising the ability they harness.

“A [transmission] line takes three years to construct, and a wind farm one yr to construct,” Minh Ha Duong, a clear vitality professional, informed Al Jazeera. “So strains must be deliberate years prematurely. This was not potential since in 2018 no person knew for sure the place they might be wanted.”

Tran Nhu Anh Kiet
Tran Nhu Anh Kiet is amongst a wave of buyers in Vietnam who’ve betted on renewables [Courtesy of Yen Duong]

Between 2017 and late 2021, Vietnam provided 20-year contracts to purchase electrical energy from new photo voltaic and wind energy tasks at mounted charges, a standard coverage used world wide to encourage funding in renewable vitality often known as feed-in tariff (FIT). At greater than $70 per megawatt-hour (MWh), the charges far exceeded what different Southeast Asian international locations have been providing on the time. The rooftop FIT in Thailand in 2019, for instance, was solely about $57 per MWh.

“The explanation for this coverage was to keep away from the chance of electrical energy shortages,” Duong stated. “As a result of the coal and gasoline energy crops we deliberate to construct weren’t [concluded] on time.”

The coverage labored. Engaging tariffs coupled with a brief eligibility window sparked a development frenzy, particularly in photo voltaic.

BIM Power is among the many main Vietnamese buyers that jumped on the bandwagon, citing enticing FIT charges and Vietnam’s prior dedication to extend renewable vitality’s share within the vitality combine from 6 % in 2016 to 10 % in 2030.

“The federal government has issued breakthrough mechanisms for wind and solar energy,” Nguyen Hai Vinh, deputy director of BIM Power, informed Al Jazeera. “In parallel, native governments labored hand in hand with us all through the undertaking growth part.”

The coordinated effort enabled the Hanoi-headquartered firm to complete 500MW price of photo voltaic and wind farms in time to get pleasure from beneficial FIT charges.

Main authorities assist schemes have included revenue tax and land lease exemptions. The general public’s rising concern over air air pollution attributable to coal has additionally meant that assist for clear vitality has been on the rise.

Renewables increase

In 2019, Vietnam overtook Thailand because the nation with the biggest put in capability for photo voltaic and wind energy in Southeast Asia. By the next yr, the nation’s whole solar energy capability reached 16,500MW, far surpassing the federal government’s goal of 850MW.

As we speak in Ninh Thuan, quite a few photo voltaic panels and wind generators stand tall among the many rice fields and salt farms.

Kiet, who hails from the coastal province, skilled the increase firsthand.

Sensing the alternatives provided by falling photo voltaic panel costs and authorities incentives, Kiet in 2019 co-founded Viet Solar, one in every of about 100 firms that sprung up in Ninh Thuan on the time to put in rooftop photo voltaic panels. With simply 14 employees members, Viet Solar has had greater than 300 shoppers to this point, starting from farmers to his former highschool instructor.

As with each increase, the bust quickly adopted.

In the course of the rollout of its newest FIT which resulted in 2020, the federal government capped solar energy eligible for the speed in Ninh Thuan at 2,000MW.

Regardless of state energy staff going door to door in the direction of the tip of 2020 telling villagers to not make investments any extra, installations continued.

In March, authorities inspections uncovered that a number of state energy firms in southern Vietnam, together with Ninh Thuan, had related new rooftop photo voltaic panels after the FIT deadline had expired.

With no follow-up pricing mechanism, some photo voltaic buyers haven’t been capable of promote all the ability they generate.

Wind turbine Vietnam
Some renewable buyers in Vietnam are unable to promote all the ability they generate [Courtesy of Yen Duong]

Trung Nam Group’s photo voltaic farm Thuan Nam, the biggest such facility in Southeast Asia, is amongst them.

Regardless that it turned operational in October 2020, in time to be eligible for the FIT charge at $.0935 per kilowatt-hour, the farm has not been capable of promote 40 % of its 450MW capability as a result of Ninh Thuan’s whole solar energy era has effectively exceeded the federal government’s 2,000MW cap. On high of that, like different investments in southern Vietnam, the undertaking has been dealing with curtailments as a result of restricted capability of transmission strains.

“That is extraordinarily wasteful for the corporate, and a waste of nationwide sources,” Trung Nam Group informed Al Jazeera in an announcement. “Our income sources have therefore skilled difficulties, severely affecting our skill to stability the books and prepare capital in addition to Trung Nam’s popularity within the eyes of our monetary companions.”

Final yr was significantly tough for Vietnam’s renewable vitality buyers. Enterprise closures throughout COVID-19 lockdowns lowered demand for energy, forcing widespread curtailments. In September, about 40 photo voltaic buyers in Gia Lai province, Central Highlands threatened the federal government with a lawsuit after they have been pressured to repeatedly reduce provide, placing them in monetary problem.

“They reduce [power supply] each weekend, they reduce 50 % of capability,” Huynh Thi Ha of Hung Khanh Photo voltaic Co Ltd, one of many buyers, informed Al Jazeera.

“It has affected my skill to pay again money owed.”

Uncertainties over curtailments and post-FIT pricing have been plaguing wind energy buyers, too. Many skilled important delays in development, unable to fly in consultants and ship wind generators on time as a result of international provide chain bottlenecks and journey restrictions in place all through 2021. Because of this, 62 wind energy tasks missed the October deadline for the wind energy FIT.

So far, the federal government has but to concern a substitute pricing coverage, leaving wind and solar energy tasks that completed development after the expiration of their respective FITs unable to promote electrical energy.

Bim Group
BIM Power constructed 500MW capability of photo voltaic and wind farms to avail of Vietnam’s renewables increase [Courtesy of Yen Duong]

“The wind energy firms which have missed the FIT deadline are anxiously awaiting a brand new mechanism, as a result of they’d already invested cash into the undertaking,” Bui Vinh Thang, nation supervisor for the World Wind Power Council, informed Al Jazeera. “We want a brand new coverage with a transparent roadmap.”

However regardless of the dangers, Vietnam’s marketplace for renewables, particularly wind, stays enticing and worthwhile within the eyes of many buyers, in accordance with Thang.

Vietnam is predicted to approve its eighth energy growth plan for 2030 this Might, after two years of revisions and delays. The newest draft was revised to mirror the federal government’s dedication to changing into carbon impartial by 2050. Underneath the plan, the share of coal energy would drop from about 30 % in 2025 to 13 % in 2045, with renewables, excluding hydropower, rising from about 23 % in 2025 to as much as 52 % in 2045.

Within the meantime, eyes are additionally on the potential for a inexperienced post-pandemic restoration that will preserve Vietnam’s increase in renewable vitality going.

In January, the World Financial institution urged Vietnam to launch aggressive bidding programmes for renewable vitality in lieu of the expired FITs whereas additionally modernising the nationwide grid and introducing vitality storage techniques.

Traders are already taking motion. Trung Nam Group is the primary non-public entity to have constructed a transmission line, which historically has been an unique area of the state. In the meantime, smaller gamers like Kiet are wanting into the choice of providing reasonably priced batteries for rooftop photo voltaic panels.

“Now we have a paradox that now there’s an extra provide of electrical energy from renewable sources, but we have now to import energy from China,” Kiet stated. “It’s such a waste of photo voltaic funding to this point.”

This story was produced with assist from Internews’ Earth Journalism Community

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