Vietnam has long been hailed as a trailblazer in Southeast Asia’s renewable energy sector, boasting almost 70% of the region’s installed solar and wind power capacity. However, recent investigations and an anti-corruption drive have caused a governance limbo, creating a policy void that has hindered progress and caused a decline in investor confidence.
The country’s renewable energy targets have been called into question due to the lack of clarity surrounding policy plans for the power sector. The situation has persisted for two years, with little movement from the government on creating a clear roadmap for the industry. As a result, investor confidence has waned, and foreign developers have started turning away from Vietnam, some even shrinking their offices. In contrast, other Southeast Asian countries, such as Thailand and the Philippines, are making strides in their green energy transitions, becoming more attractive markets for renewable energy investments.
Vietnam’s renewable energy sector was initially on an upward trajectory, with impressive growth rates over the past decade. However, investigations into previous renewable energy pricing deals have cast a shadow over the industry, causing the current limbo. In a country where the government is heavily involved in the energy sector, a lack of clear policy direction has led to concerns among investors about how the industry will be regulated in the future. Investors are also worried about the government’s commitment to meeting its renewable energy targets. Vietnam aims to generate 10.7% of its electricity from renewable sources by 2030, with the percentage increasing to 25.6% by 2035. However, without a clear plan in place, these targets appear uncertain.
The lack of clarity has also caused some renewable energy projects to be delayed, such as the 258 MW Lai Son wind power project, which was initially set to begin operations in 2021 but has been pushed back to 2022. Furthermore, the current situation has also led to a decline in the development of new projects. Investors are hesitant to pour money into a market that appears to be uncertain and subject to sudden regulatory changes. Vietnam’s industry and trade ministry has yet to comment on the situation, leaving many in the industry wondering about the government’s plans for the sector.
Despite the current challenges, there is still hope for Vietnam’s renewable energy industry. The country boasts an abundance of solar and wind resources, making it an ideal location for renewable energy development. To regain investor confidence and stimulate growth in the sector, the government needs to take decisive action to create a clear policy framework. This includes developing regulations that are transparent, consistent, and predictable, providing clear guidance on investment opportunities and regulatory requirements.
Investment in renewable energy also needs to be made a priority, with the government providing financial incentives and tax breaks to encourage further investment. If Vietnam can address the current policy void, it has the potential to become a leader in Southeast Asia’s renewable energy sector once again. However, until then, investors will remain hesitant, and progress in the industry will continue to be hindered.
Jonas Muthoni is an entrepreneur and renewable energy expert. He is the founder of MicroGridMedia.com, a website dedicated to bringing the latest news and information about solar energy and other renewable energy sources to the public. Jonas is passionate about promoting sustainable energy solutions and educating the public about the benefits of renewable energy. He is a regular speaker at industry events and conferences and is committed to driving the transition to a cleaner and more sustainable energy future.