EDP Renovaveis, SA (EDPR), the world's fourth-largest renewable energy producer, on June 30 announced its foray into Vietnam following an acquisition of a 28MW solar photovoltaic (PV) project for a total consideration of $36 million.
EDPR has reached an agreement with Trina Solar, the world-leading PV and smart energy total solution provider, to acquire the Trung Son Solar PV project in Khanh Hoa province.
Put into operation in December 2020, the project has a power purchase agreement (PPA) signed with Electricity of Vietnam under a 20-year feed-in tariff (FiT).
In June, EDPR also inked a deal to scoop up two solar plants in Vietnam with a total capacity of 200MW from Xuan Thien Group. Situated in Ninh Thuan province, the two solar plants have been operated since 2020. The deals have an estimated valuation of $284.
Vietnam is one of the fastest-growing economies in Southeast Asia with power demand increasing at around 10 per cent per annum. Thermal represents around 50 per cent of the capacity mix and energy dependence has increased significantly with net imports currently at 30 per cent of total energy demand.
With the objective of increasing the weight of renewable energy sources in the energy mix and leveraging on its strong fundamentals for both wind and solar, Vietnam has set ambitious renewable energy source growth targets in its Power Development Planning VIII.
The country aims to reach 30 per cent of capacity from renewable energy sources by 2025 and 37GW of wind and solar PV installed capacity by 2030, implying wind and solar PV capacity additions of 28GW until 2030.
Growth in renewable energy is supported by a 20-year FiT scheme under a stable regulatory framework while in the upcoming years, growth is expected to be based on auctions and on the growing private PPA market.
The entry to Vietnam is within the context of EDPR's business plan 2021-2025 and represents a first step towards the establishment of EDPR’s presence in Asia-Pacific, where the company expects to invest part of the five per cent allocated to other geographies within the 20GW growth plan until 2025.
The move is expected to provide diversification and growth optionality and further reinforce EDPR’s worldwide leading position in renewables.