Norway - Supporting Vietnam’s energy transition with world-leading excellence in renewable energy

Norwegian Ambassador to Vietnam Grete Løchen

Vietnam signed the Global Coal to Clean Power Transition Statement and Prime Minister Pham Minh Chinh made a strong commitment to net-zero at the COP26 World Leaders Summit. What are the advantages and challenges for Vietnam in changing to renewable energy and offshore wind?

First, congratulations to Vietnam on signing the Global Coal to Clean Power Transition Statement and the strong commitment that Prime Minister Pham Minh Chinh announced at the World Leaders Summit. This shows Vietnam’s strong political will, which will make a significant contribution to keeping 1.5 degrees Celsius within reach and stopping catastrophic global warming as aimed in the Paris Agreement.

In this context, transition from fossil fuel into cleaner and greener energy is indispensable. For Vietnam, transformation into renewable energy, particularly offshore wind, is realistic and within reach. First, as a coastal nation, Vietnam has more than 3,000km of coastlines, which offers an abundant offshore wind resource. Second, Vietnam’s existing industries and businesses within oil and gas, shipyards construction, and others have very good technical conditions for offshore wind with available expertise on offshore oil and gas, which can be transferred into offshore wind.

Meanwhile, all the seaport facilities and logistic systems have been reasonably well in place. This lays a strong foundation for Vietnam to develop a strong local supply chain for the offshore wind industry and will facilitate power production at lower costs, thus making renewable energy affordable for all.

Of course, any transitional process is challenging and even painful. To facilitate this, local authorities should develop a transparent and centralised regulatory framework for offshore wind, which is forward-looking and predictable for all investors. While the power grid must be enhanced substantially, the regulatory framework should also anticipate the future developments of renewable energy projects to be facilitating instead of hindering.

To develop good and sustainable policies, we need to engage both government, private sector, researchers, and civil society. This multi-stakeholder approach will inform policy-makers for better and more effective policy solutions.

Norway - Supporting Vietnam’s energy transition with world-leading excellence in renewable energy

What are the key factors for the sustainable development of offshore wind? How can Norwegian companies contribute to Vietnam’s efforts?

Like Vietnam, Norway also has a long coastline and the ocean economy, for hundreds of years, has been important to us. The transition to renewable energy/offshore wind is realistic and within reach. Offshore wind requires technologies that are a strength of Norwegian companies. With long-established strong ocean industries, Norwegian companies are possessing world-class capabilities in innovation, technology, and large-scale industrial solutions to develop new competitive solutions to develop renewable energy including offshore wind power projects. Norway has for some time been a front-runner in offshore wind development in Europe.

Norwegian businesses can contribute on multiple levels with know-how, technology, and experience sharing. Our companies are ready to collaborate with local partners, share expertise and technologies to help build a strong supply chain in Vietnam, cooperate in the co-production of offshore wind material and equipment not only for domestic consumption but also for exports, and thus contribute to creating more jobs for Vietnamese people and Vietnam’s sustainable economic growth and energy transition.

Our businesses are not only technically competent, they are really delivering services and products. They have the goodwill to cooperate and can walk the talk.

In COP26, climate financing was one of the key discussion topics. As a signatory to the Paris Agreement, Norway – together with other developed countries – is working hard to perform our commitment to provide $100 billion in climate finance annually to assist the transition efforts of developing countries. Norwegian Prime Minister Jonas Gahr Støre has announced in Glasgow that Norway would double its climate financing contribution to more than $1.6 billion by 2026 for this purpose.

According to the Norwegian PM, Norway will work with development partners to help finance their transition to renewable energy. We will support investments that can help phase out coal and other fossil sources. We will launch a new Climate Investment Initiative to fund renewable energy in developing countries. I believe Vietnam will also benefit from this.

Norway is home to many successful renewable energy projects. What lessons could Vietnam learn from Norway to enable its own transformation?

The energy transition process involves different players and for it to succeed, it is crucial to ensure that stakeholders play their roles well. An effective multi-stakeholder approach is key. The government, private sector, researchers, and civil society must work hand in hand to make this green transition move forward. Collaboration is key!

Several Norwegian companies have already started the transition from not just investing and developing in oil and gas equipment but into renewable energy and green solutions. They realise that this is an indispensable development and the future of the energy industry worldwide. These are maritime companies together with companies within high engineering capabilities, big investors, and developers, including within the banking and financial sector. Many of these are ready and able to invest time, knowledge, and money to enter the Vietnamese market for renewable energy. Experience from risk management and complicated tender/auction processes is another skill they bring along.

Lessons learned on the regulatory framework as well as the next steps as shown in the supply chain study are other fields of knowledge that Norwegian companies can assist the Vietnamese industry.

In Vietnam, Norwegian Scatec is planning to develop a 1,000MW floating solar project in the southern province of Dong Nai. This will be a $1 billion investment, including grid investments that will also be one of the largest floating solar projects in the world if Scatec gets the necessary approvals. They will establish a production line for floating devices in Vietnam together with local partners to further ensure that the project creates substantial benefits for Vietnam in terms of local jobs and technology development. Scatec is also looking into offshore wind opportunities in Vietnam.

In addition, Norway’s largest company Equinor also sees Vietnam as a very promising market to invest and develop offshore wind. Today they’re building the world’s largest offshore wind farm outside the United Kingdom and are eager to come to Vietnam.

The presence of these two prominent Norwegian companies which are long-term investors and developers will send a very positive signal to the Norwegian business community about potential opportunities for renewable energy projects in Vietnam. This way, Norway will be able to assist the Vietnamese government to fulfil its commitment made during COP26 regarding zero emissions and phasing out coal power plants and ensuring sustainable and greener economic growth.