Solar power needs state support to spark into life

Vietnam’s budding solar power sector has seen plenty of investor interest,
but as yet there is no national plan in place -Photo: Le Toan

A firm owned by investors from South Korea, that specialises in renewable energy and hospital management, proposed its plan last week to build a solar power plant with the generation capacity of 130 megawatts in the Mekong Delta city of Can Tho. This area is one of the three localities in Vietnam that experience the most high-intensity sunlight. The firm said it would invest $55.8 million in the 50-hectare project, using the latest technology from South Korea.

However, Chairwoman of the Can Tho People’s Committee Vo Thi Hong Anh was concerned about how this large allocation of land could affect local rice farmers.

According to the Can Tho Planning and Investment Department, in recent years, both foreign and domestic investors are eying to this potential sector in the city.

South Korea’s consortium Woojin and Kunhwa also recently submitted a feasibility study for the development of a solar power plant in Can Tho. The 160MW project is expected to have the total capital investment of $240 million.

In the same development, South Korea’s Arman Holding is working with state-run Electricity of Vietnam (EVN) on a solar power plant worth $140 million in the central province of Quang Nam.

A source from the local authorities said the Russian firm, the main investor of the project, was surveying a location with its partners – Singapore’s finance company Royale Star Holdings and Vietnam’s Natural Energy Investment & Development Joint Stock Company. The 100MW plant was expected to be the first solar power project in Vietnam connected to the national grid. The partners are currently discussing market prices with EVN. Further details and a time frame for the project are not available at the moment.

Last month, another solar project started construction in a remote area within the central province of Quang Binh. The project, funded by a $13.7 million official development assistance loan from the Republic of Korea, is expected to supply electricity for more than 1,294 households in 46 communes and villages, as well as 78 public service units in nine communes in Le Thuy, Quang Ninh, Bo Trach and Minh Hoa districts next year.

Vietnam has been setting up solar panels on large buildings across the country, but the generated electricity mostly serves the buildings themselves. To date, there is no mechanism in place to support the development of solar power projects in the country, even though this does exist for other renewable energies, such as wind power and waste-to-power projects.

In April this year, Deputy Prime Minister Hoang Trung Hai asked the Ministry of Industry and Trade to look into the compilation of mechanisms to support solar power development and submit a report to the prime minister this year. The issues that need to be clarified include solar power development planning, implementation models at household and larger-scale levels, off-grid and grid-tied projects, and investment incentives. Attention should be paid to electricity prices of grid-tied solar power projects, and the responsibilities of buyers.