Mr Nguyen Tam Tien, chief executive of Trung Nam Group which manages the project, said that the challenge for private enterprises in the renewable energy sector is the lack of specific regulations for the private sector to grow in this field.
“For example, there is no feed-in-tariff or price for electricity from renewables, no full utilisation of renewable energy,” he said.
Infrastructural constraints, like the limited capacity of the national grid, are further hurdles to making the switch.
“The grid was a bit outdated to manage such a big influx of distributed energy. So I think the concern to resolve now is more on that,” said Mr Matthieu Francois, a partner at McKinsey & Company.
FINANCING DEAL IS POSSIBLE SOLUTION
Vietnam’s Minister of Industry and Trade Nguyen Hong Dien earlier this year acknowledged that Vietnam is facing great challenges to realise its commitments at COP26.
“Vietnam has to both expand its power grid and generation while transitioning to cleaner energy sources. At the same time, we need to keep electricity prices affordable,” he said.
Solar and wind power currently account for as little as 4 per cent of the country’s energy usage, but Vietnam is looking at ways to increase this. It is seeking funding of up to US$14 billion a year through 2030 to develop new power plants and expand its grid.