I. International experience in renewable energy development and recommendations for Vietnam
The renewable energy industry is growing rapidly worldwide as a major driving force to build sustainable energy systems and combat climate change. European countries such as Germany and Denmark are the first to apply renewable energy conversion policies and have accumulated a lot of experience in many fields such as technology development, market development and institutional improvement. In particular, Germany is innovating its energy system focusing on solar and wind power production through the "energy conversion" policy, and Denmark has affirmed its position as the global leader in offshore wind power production.
The United States and China are also investing strongly to accelerate the renovation and expansion of renewable energy technology. In the United States, each state government is implementing many different renewable energy policies to enhance the competitiveness in the market, and China is leading the global market in production and installation of solar power generation facilities based on strong policies led by the government and large -scale investments. The experience of these countries provides important insights for Vietnam in the entire process of renewable energy development, including technology development, policy design, marketing and infrastructure construction.
Vietnam is actively developing renewable energy to meet rapidly increasing electricity demand and climate change needs. The Government is pursuing a policy of expanding the market share of renewable energy production, focusing on solar and wind power production, while making efforts to attract foreign investment. However, there are still problems that need to be addressed such as institutional shortages, infrastructure shortages and lack of technological capacity.
To successfully develop renewable energy in Vietnam, it is possible to make the following recommendations based on international experience:
1. Set clear, long-term policy goals and maintain consistency
Like Germany's energy transition policy, it is important to set a long-term vision and specific goals while maintaining policy consistency despite changes in political circumstances, such as government changes. This is very necessary to solve the instability in investment and build trust for market participants.
2. Create a transparent and predictable market and legal environment
It is necessary to create a transparent and predictable market and legal environment so that investors can assess the viability of businesses and make investment decisions from a long-term perspective. It is important to establish clear standards and procedures, such as preferential electricity purchase prices (FIT) and power purchase contracts (PPA), and streamline the business licensing process.
3. Investing in technology development and human resource development
To achieve sustainable growth in the renewable energy industry, it is necessary to enhance its own technology development capacity and develop specialized human resources. We must transfer advanced technology through international cooperation and develop appropriate educational programs through cooperation with universities and research institutes.
4. Expanding power grid infrastructure and applying smart grid
To overcome the continuous situation of renewable power sources and ensure stable power supply, it is necessary to expand the power grid infrastructure and apply smart grid technology. We need to expand renewable energy reception capacity by building energy storage systems (ESS) and improving the power grid management system.
II. Difficulties and expectations of Korean enterprises when investing in the Vietnamese energy sector
The Vietnamese energy market is recognized as an attractive investment destination for Korean investors due to its high growth potential. In particular, the renewable energy sector is assessed to have very high growth potential, along with the Government's active support policy. In fact, many Korean companies are penetrating the Vietnamese solar and wind power markets and achieving many successes. However, Korean investors may face difficulties after investing in the Vietnamese energy market, especially in the renewable energy sector.
1. Laws, regulations and licensing procedures are complicated and uncertain
Law and regulations that are constantly changing along with complicated and non-transparent licensing procedures increase uncertainty in investment decisions and significantly consume time and costs in promoting business. In particular, difficulties are often encountered in the process of ensuring land use rights, assessing environmental impacts and connecting the power grid.
2. Limited power grid infrastructure and connection problems
Vietnam's power grid infrastructure is still underdeveloped, sometimes causing difficulties for renewable energy power plants when connecting to the power grid. Lack of power grid capacity, difficulty in ensuring connection points and the burden of connection costs can all have a negative impact on business profits.
3. Competition and competitive pressure on prices are increasingly fierce
The Vietnamese renewable energy market is becoming more and more competitive due to the participation of many domestic and foreign investors due to high growth potential. In particular, in the case of solar power production, when the cost of electricity production decreases and competitive pressure on prices increases, ensuring profits can become difficult.
4. Bribes exchange rate fluctuations and difficulties in capital mobilization
The fluctuations in the exchange rate of the Vietnamese Dong can affect investment profits and there are cases where it is difficult to mobilize capital such as project financing because the domestic financial market has not yet developed.
5. Cultural differences and language barriers
Vietnam's unique business culture and language barriers may make it difficult for Korean investors to cooperate with local partners, communicate with government agencies and manage the workforce.
Despite these challenges, Korean investors still consider investing in the Vietnamese energy market with the following expectations:
1. High growth potential and proactive support policies of the Government
Along with Vietnam's high economic growth rate, energy demand is expected to continue to increase and the Government's renewable energy support policy will bring attractive investment opportunities to Korean investors.
2. Competitive labor force and production facilities
Vietnam has a rich and competitive workforce, facilitating investment in energy-related manufacturing industries. In addition, geographically, this place is close to Korea, so it has advantages such as reducing logistics costs.
3. Friendly views of Korean companies
Vietnam has deep economic cooperation with South Korea and has a relatively friendly awareness of Korean companies. This could have a positive impact on the success of penetrating the local market and expanding the business operations of Korean investors.
4. Ability to take advantage of technology and experience in renewable energy
Korean companies can ensure a competitive advantage in the Vietnamese market and build a successful business model based on accumulated renewable energy technology and project development experience.
5. Expected to generate long-term investment profits
The Vietnamese energy market has the potential to create stable profits in the long term. In particular, the renewable energy sector is expected to continue to grow in the transition trend to environmentally friendly energy globally.
