Vietnam’s increasing demand for energy has forced it to venture into green energy. Six years ago, renewable energy sources like solar, wind, and biomass were operating at 109 MW. In this period, Vietnam’s energy mix was being run by hydropower at 46%, coal energy at 29%, and natural gas at 22%. Recently, a valuation revealed that solar and wind power contributed 5700 megawatts to equate to approximately 10% of the total supply. This trend means that wind and solar power have grown from zero to 10% of its production in half a decade.
One of the major contributors to this change is Vietnam’s cataclysmic rate of economic growth as stipulated by the Asian Development Bank. The economic growth forced energy consumption to grow explosively. The public electricity firm, Vietnam Electricity (EVN), has raised the amount of energy production from 128.6 terawatt hours (TWh) to 209.4 TWh three years ago. The demand for electricity has been increasing at a rate not less than 10%, which is extremely quick compared to that of the GDP. This trend presses for more electricity production and investment.
Vietnam’s dependence on hydropower has come with various challenges, with the primary being limitations of damming rivers and the pressure on the utilization of hydropower resources in the country. Clearly, Vietnam cannot entirely depend on hydropower for economic growth. Coal and energy, which are the other primary sources of electricity generation, are imported. The rate of imports grew tentatively to 43.7 million tons three years ago. The source of concern is that the domestic generation of fossil fuels cannot sustain Vietnam’s consumption, forcing the country to depend on global markets for raw materials to run the grid. For Thailand, a country that relies on importing power to run its grids and the energy switch to renewable energy depends on political trends. Vietnam is also following this path in proximity.
Four years ago, the energy regulators authenticated EVN to work out with the independent producers of solar energy to buy it at an appealing rate of 9.35 cents for every kilowatt-hour. These purchases have proved to accelerate the renewable energy sector coupl3d with political and tariff support. Initially, EVN was a monopoly in the energy sector controlling about 60% of the market share before the solar and wind energy firms started to chip into this market share. EVN utilized the opportunity to transition its operations to renewable energy to declare that it is still in control of the electricity market.