The Decision by the Prime Minister to encourage the development of solar power projects and new technologies in this field to cheaper investment ratio has increased more opportunities for domestic enterprises investing in this area.
Energy solutions for climate change
At a solar energy technology seminar organized by the Vietnam Climate Innovation Centre (VCIC) in Son La, it was informed that although the province has planned 95 small and medium hydropower projects with the capacity of 321 MW and planned to supplement 9 ones, increasing the total capacity to 369 MW, some small hydropower plants operate with very low capacity factor due to inadequate hydropower investigations and surveys.
Many plants only operate during the rainy season, while in the dry season the capacity is very low, even the amount of water is not sufficient to generate electricity.
*Nguyen Quoc Khanh – Vice Chairman of Son La People’s Commitee had his openning speech
According to the latest statistics, Vietnam's total hydropower capacity is about 35,000 MW, technical potential (feasible exploration potential) is about 26,000 MW, equivalent to nearly 970 planned projects. Every year, more than 100 billion kWh can be produced, of which 15 - 20 billion kWh are generated by 800 small hydro projects per year. In 2017, 473 projects are anticipated to put into operation, with a total capacity of 21,229.3 MW, accounting for nearly 82% of the total technical potential capacity of hydropower.
While water resources are being threatened and depleted, developing renewable energy, especially solar energy, is a common trend in the world, especially in Vietnam.
Solar is a clean, renewable energy resource with enormous reserves and overcomes the shortcomings of other renewable energy sources such as wind power whose total investment is high while generation efficiency is low; Nuclear power is proven to have an extremely negative impact on the environment and society.
Not now, but since the last century, inventor Thomas Edison recognized the potential of solar power. He once told his friends, Henry Ford and Harvey Firestone, that " I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.”
It is no longer the game for only Fat Cats
After many years of waiting, the solar energy market has a mechanisms to encourage the development of solar power projects in Vietnam by the Prime Minister's Decision No. 11/2017 / QD-TTg on.
This Decision has created an expectation for domestic and foreign investors to Vietnam's electricity market. In particular, Decision 11/2017 / QD-TTg requires Vietnam Electricity (EVN) will be responsible for purchasing all electricity from grid-connected projects at price of 9.35 cents / kWh.
Reinforcing this trend, foreign businesses have been quickly invested in Vietnam solar power projects: Thien Tan Investment and Construction JSC has built 2 solar power plants in Quang Ngai and Ninh Thuan; DooSung Vina Co., Ltd. (South Korea) has invested $66 million in a 30 MW plant in Binh Thuan.
Meanwhile, potential Vietnamese corporations have also begun to take part in this arena, typically the $1 billion project from Thanh Cong Corp with the ambition of building and operating 20 solar power plants in Viet Nam.
Although this is a good time to pour capital into the solar sector, for domestic investors, this area is relatively new and requires a profound understanding of the technology as well as the financial structure.
According to VCIC experts, in the latest calculations in two recent years on the investment ratio of two factories Tianjin Solar Power Plant and Tuy Phong Solar Power Plant, average investment is about 40 billion VND / MW (equivalent to 2 million USD / MW), of which the investment cost for infrastructure and connection to the national grid accounts for a significant proportion.
However, up to now, with the new generation technology of solar power from Germany and the Netherlands, the investment for 1 MW of solar power can be reduced by 40%, down the cost to $ 1.2 million / MW.
*Delegation of experts from the Netherlands and Germany conduct surveys and consult field solutions for enterprises
Significant reductions in investment thanks to the introduction of new technologies that improve power-generation efficiency by 4% - 7% due to high battery-efficiency (16.7% - 17.5 average % and reached the maximum efficiency of 20.6%), reduced light reflectivity (6%), and the quality of technology is also guaranteed with product and power generation efficiency warranty up to 25 years.
In addition, the integration of solar and hydropower systems is the optimal solution that has been adopted by many countries, enabling plants to take advantage of the power generation infrastructure and operating system (transformer systems, connection ...) inherent to the hydro power plants. The time and cost of installing a solar project is only 6 - 12 months, enabling the plants to quickly operate two kind of power generators that cover each other during rainy and dry season.
"With a mission to support entreprises in developing technology solutions and business models in the field of climate change, VCIC is ready to assist local investors to select technology solutions and seek for financial supports or M & A hydropower projects." the VCIC representative said, adding that the new technologies would provide more opportunities and certainty for Vietnamese investors to decide to join into the field of solar power.
As a part of the World Bank Group’s Climate Technology Program, under Ministry of Science and Technology, VCIC has a mission to promote technology transfer, investment connection, policy advices to realize the products/projects in the field of climate change.
*Read the original article on Bao Dau Tu.
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