Viet Nam: market incentives and technologies for the energy transition
To protect the climate, Viet Nam aims to generate more green electricity and feed it into the grid. Feed-in tariffs and smart grids are paving the way.
With international support, Viet Nam aims to cut its net emissions to zero by 2050. Furthermore, the country plans to phase out the use of coal-generated power by the end of the 2040s. For this to happen, Viet Nam needs to transition to renewables successfully. Since 2009, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH has been supporting the country in the Mekong Delta in developing a market for renewable energies.
New feed-in tariffs for more green energy
To foster the production of green energy, the government has created incentives to encourage people to invest in photovoltaic systems and wind farms. GIZ developed scenarios to outline how different feed-in tariffs would impact the market for renewable energies. On this basis, among others, the government set out new tariffs. As a result, the number of plants generating energy from wind or solar power increased dramatically. Whereas, in 2019 only 2 gigawatts (GW) of power could potentially be generated by sunny and windy weather, this figure had risen to 24 GW by 2022. In this period, Viet Nam in fact saw the most rapid expansion of wind and solar power anywhere in the world.
Advisory services on smart grid technology
The input of large volumes of green electricity puts a massive strain on the country’s electricity grid at peak times, to this day. To remedy the situation, GIZ explored ways of better matching electricity supply and demand – and found solutions here, too, which led to improvements. It also trained operators of transmission grids and distribution networks to enable them to integrate smart grid technologies into their systems. Smart grids can adjust to fluctuations in energy supply and demand independently, making it easier to manage power grids loads.
Nguyen Anh Tuan, Director General of Viet Nam’s electricity regulator says: ‘Our cooperation with GIZ is extremely valuable for planning and operating smart grids. The assessment of different smart grid technologies, in particular, is helping us modernise our own grids so that they can incorporate additional wind and solar power.’
In Viet Nam, GIZ is providing advisory services on behalf of the German Federal Ministry for Economic Cooperation and Development and the German Federal Ministry for Economic Affairs and Climate Action.