Vietnam’s Ambitious Clean Energy Goals

In recent decades, Vietnam’s demand for energy has increased along with its rapid economic development. This surge in demand could provide the impetus to quickly further develop Vietnam’s emerging renewable energy industry.

Vietnam’s GDP grew at an annual rate of 6.8 percent between 1990 and 2013, and is projected to hover around 7 percent annually from 2016 to 2030. Industrialization, coupled with population increases, drives the need for more energy and especially more electricity. This is evident in the increase of final energy consumption at an average annual rate of 5.7 percent between 1990 and 2012, and of electricity use at 14 percent annually during the same period.

To meet increasing power demand, Vietnam’s Power Master Plan VII projects its output will need to increase from 194–210 billion kilowatt hours (kWh) in 2016, to 330–362 billion kWh in 2020, and to 695–834 billion kWh in 2030. As renewable sources are part of Vietnam’s energy mix, surging power demand will also boost the demand for renewable energy.

In comparison to other more traditional energy sources such as oil and coal, renewable energy is relatively new in Vietnam. Its presence is strongly driven by government policies, and is mostly positioned within sustainable development and greenhouse gas (GHG) reduction frameworks.

The Sustainable Development Strategy 2011–2020, for example, identifies clean and renewable energy development and its growing share in Vietnam’s energy consumption mix as priorities for a sustainable development.

The National Strategy on Climate Change also highlights the development of ‘new and recycled energies including wind power, solar energy, tidal energy, geothermal energy, biofuel and universal energy’ as avenues to reduce greenhouse gas emissions. Similarly, the National Action Plan on Green Growth 2014–2020 explicitly mentions the need to promote clean and renewable energy to reduce GHG emissions.

To realise its energy vision, Vietnam has put in place enabling policies to encourage renewable energy development. The Electricity Law 28/2004 stipulates the need for incentives on investment, electricity prices and taxes. Decree 04/2009/ND-CP further lays down the incentives and supports for environmental protection activities, including renewable energy.