IEREA 2021 – First step of a long-term dialogue for Vietnam renewable energy auction

Vietnamese and international experts shared experience in renewable energy auction

Power Engineering Consulting JSC 3 and the Centre For Procurement Support (Public Procurement Agency, Ministry of Planning and Investment) co-organised an international webinar series (IEREA 2021) on August 17-21 where Vietnamese and international experts shared experience in renewable energy auction.

The five-day IEREA 2021 webinar series focused on renewable energy auction experiences from Denmark, India, the United Kingdom, Germany, and the United States.

Danish lessons in offshore Wind – 25 years of development

At the beginning of her presentation, Camilla Holbech, Energy Counselor Offshore Wind, the Embassy of Denmark in Hanoi, brought all IEREA 2021 delegates back to 1991 when Vindeby, the first offshore wind plant of Denmark and the world, was built.

The development of offshore wind in Denmark, including the development of an auction mechanism, is not only an effort of the Danish government but also a dialogue effort from the enterprises and the scientific community. Establishing an auction mechanism has not been easy, but Denmark has started its journey with dialogue, as Camilla Holbech sincerely shared: “Dialogue, dialogue, and more dialogue.”

For offshore wind auctions, the first important dialogue is about national marine spatial planning. Agreeing with Camilla Holbech, Sebastian Hald Buhl, country manager of Orsted in Vietnam, emphasised the importance of a national strategy to create a national marine spatial planning, especially on cross-sectoral issues.

Danish friends opened the IEREA 2021 dialogue with sincerity and enthusiasm, as in the opening remarks at IEREA 2021 by Malte Möller-Christensen, Deputy Head of Mission, the Embassy of Denmark in Hanoi: "Denmark is a close friend of Vietnam and always stands ready to share our experiences, especially in relation to offshore wind and sustainable development." And the dialogue on the development of national marine spatial planning will definitely continue to be discussed with support from Denmark.

Indian lessons in solar energy – Dispute resolution in renewable energy auction

Poonam Verma, Partner, J. Sagar Associates emphasised that India's solar power capacity has increased by 15 times from 2.6GW in 2014 to 42.64GW in 2021. One of the reasons for the solar power boom is an effective dispute resolution mechanism (such as a specialised court system), contributing to increasing investor confidence.

One of the effective dialogue channels contributing to India’s solar energy auction dispute resolutions is the National Solar Energy Federation of India (NSEFI). Recently, after cancellation of the 500MW tender by Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA), NSEFI has represented this mishandling of tenders by UPNEDA to the MNRE and sought for MNRE’s urgent intervention as this kind of mishandling by implementing agencies will make the foreign investors extremely cautious in making investments in the energy sector.

The Indian friends did not hesitate to share the obstacles on development of India solar energy auction, but more importantly, those obstacles could not stop India because of“strong commitment to the development of renewable energy", as in the opening remarks at IEREA 2021 by Mini Kumam, First Secretary (Economics & Commercial), Embassy of India in Hanoi.

UK lessons – 20-year journey to develop renewable energy

Starting in 2002, the UK officially adopted mechanisms to support large-scale renewable energy projects. The UK has taken steps to prepare for the development of renewable energy, including an auction mechanism.

The Department of Business, Energy and Industrial Strategy is the main body responsible for developing the renewable energy auction mechanism. The National Transmission System is the party responsible for receiving the tender documents and the Low Carbon Contracts Company is the party to negotiate and sign the relevant contracts. In addition, the Office of Gas and Electricity Markets is the direct supporter of the entire process.

The fact that the "power trio" of the Department of Business, Energy and Industrial Strategy, the Low Carbon Contracts Company, and the Office of Gas and Electricity Markets all participated in the discussion at IEREA 2021 shows the UK's strong commitment to supporting Vietnam in developing a renewable energy industry, as in the opening remarks at IEREA 2021 by Sam Wood, Deputy Consul General and Head of the Department for International Trade team at the British Consulate General in Ho Chi Minh City: “The UK is ready to share experiences with Vietnam as a close friend.”

Lessons from Germany – A roadmap for policy transition from FiT to auction

Thomas Krohn, Project and Portfolio Manager, GIZ Energy Support Programme in Hanoi, shared the journey of more than 20 years of renewable energy development in Germany since the 2000s.

In the path of policy transition from FiT to renewable energy auction, Germany faces many challenges in designing the auction mechanism.

One of the hot issues of IEREA 2021 is the calculation of costs related to Germany's renewable energy auction, specifically related costs when participating in subsidies or the difference between the market prices and the ceiling price policy in Germany.

IEREA 2021 is the first step of a long-term dialogue on determining/calculating renewable energy prices (especially solar and wind prices) in Vietnam, with a commitment to support from German friends, as in the opening remarks at IEREA 2021 by Weert Börner, Deputy Head of Mission and Head of Economic Section, the Embassy of Germany in Vietnam: “Germany is willing to go hand-in-hand with Vietnam in the development of renewable energy."

The United Stated lessons – From auction theory to practice

As in the opening remarks at IEREA 2021 by Anna Shpitsberg, Deputy Assistant Secretary for Energy Transformation at US Department of State, fighting the impact of climate change, providing reliable and affordable energy, and attracting investment that can help these goals are among cooperation between the US and Vietnam.

With the support of the US Department of State, IEREA 2021 was honored to invite James Bennett, Programme Manager, Office of Renewable Energy Programmes, Bureau of Ocean Energy Management, to share his experiences in offshore wind auction in the US (for which the Bureau of Ocean Energy Management is the government agency that directly administers the auction).

At the same time, Prof. Dr. Carlos Batlle Lopez, a researcher at the MIT Energy Initiative (one of the long-term partners committed to supporting the development of renewable energy in Vietnam) and Associate Professor at Comillas Pontifical University (Spain) shared that the design of a renewable energy auction mechanism should consider a combination of many factors.

IEREA 2021 closed but has opened a new dialogue for a strong Vietnam, as Tran Quoc Dien, deputy general director of Power Engineering Consulting JSC 3, head of the organising committee, shared at IEREA 2021: “We are now in the second year of a global pandemic that has killed more than four million people. Extreme climate events regularly devastate vulnerable communities. However, remember this world is full of miracles. Together we can build a better world.”

The renewable energy industry of Vietnam is facing an important turning point to move to the next stage of development. “The world is often unkind to new talent, new creations. The new needs friends,” as Anton Ego wrote in the Ratatouille.

Therefore, IEREA 2021, with the spirit of "Sharing is caring", is to bring many sincere friends to Vietnam, to support the renewable energy industry of Vietnam, to not only share the successes but more importantly to discuss the mistakes on the development path of different countries in the world.