Lack of legal framework, overlapping laws stepping the development of renewable energy
Vietnam is entering a new era with two major goals of becoming a developed country with high income by 2045 and achieving Net Zero by 2050. To realize that, the economy must strongly transform towards green, creative and digital, instead of the old growth model based on resources and cheap labor.
Discussing at the Workshop "Eneralgy conversion solutions towards Net Zero", Dr. Bui Thanh Minh, Deputy Head of the Professional Director, VP of the Private Economic Development Research Board (Board IV) assessed that nearly 50% of Vietnam's electricity is still dependent on coal, making it difficult to implement emission reduction commitments and facing environmental risks and costs. Meanwhile, our country has great potential for IT but is facing many barriers in infrastructure, law, price mechanism and capital.
"The big orientations of the Party today, expressed through the" pillar of the pillar "including Resolutions 57, 59, 66 and 68, are opening up the" 2.0 innovation ", creating a solid policy foundation for changing the growth model. This is a mature time for Vietnam to regenerate energy policy, transition from fossil fuels to green energy development, with a private roles, with a private roles. Research and development of private economy (Board IV) emphasized.
Assessing the difficulties in the energy transition process in Vietnam, Associate Professor, Dr. Dang Tran Tho - Director of the Institute of Energy Technology (Hanoi University of Science and Technology) commented that it is an incomplete and unstable policy framework. Up to now, although the revised Power Plan VIII has been issued and international commitments on net zero emissions have not had a legal basis on Employment Service ( Laws on Employment Service) or the Law on Energy Transition. This leads to a situation of disjointed policies, lacking legal constraints, and difficulty in consistently implementing them between the central and local governments.
The electricity price mechanism after FIT has not been issued in a timely manner, causing investors to lose confidence and delay many projects. The transition from FIT mechanism to auction or PPA at ceiling prices is unclear about the method of price determination, risk sharing mechanism and application roadmap. At the same time, current PPA contracts are not legally tied, lack payment guarantee mechanisms or share infrastructure - policy - legal risks, making it difficult for international financial institutions to participate in long-term investment, Associate Professor, Dr. Dang Tran Tho analyzed.
In addition, Assoc.Prof.Dr. Dang Tran Tho said that the overlap between the Electricity Law, the Investment Law, the Land Law and the Law on Environmental Protection are causing many inadequacies in the process of investment licensing. For example, a 10-hectare NLT project takes 12-18 months to integrate into land use planning, environmental evaluation, and approval of investment policies. The lack of an interconnected mechanism between ministries also makes the project disbursement and implementation of the project extended, increasing social costs and reducing the efficiency of energy conversion.
Wind power has potential but cannot be exploited as expected
Currently, Vietnam is considered one of the countries with the leading wind power potential in Southeast Asia. With a coastline of more than 3,000km, many areas have an average wind speed of 7 to 9 m/s, Vietnam has an ideal advantage to exploit this potential source of labor. However, implementing the capacity target for onshore and offshore wind power according to the adjusted International Airport VIII is facing many barriers and many policies that need to be cleared.
According to Mr. Nguyen Thai Ha - General Director of T&T Energy Group, there are still no specific regulations on marine space planning, the procedures for granting licenses for survey and development of offshore wind power (DGNP). This causes difficulties in implementation, when there are no detailed instructions on the process of applying for a survey license and technical requirements; the problem of overlapping coastal areas has not been resolved; coastal areas for import-export development and related criteria have not been announced, leading to delays in implementing related works.
“Regarding the electricity price mechanism, on May 23, 2023, EVN reported to the Ministry of Industry and Trade to calculate the electricity generation price bracket of wind power plants, including DGK. The community of investors would expect the Ministry of Industry and Trade to soon approve the electricity generation price bracket of the DAGK factory to have a basis for calculating financial efficiency. Besides, the technical infrastructure, the supply chain is not ready. Using, currently Vietnam does not have enough infrastructure. There has not been a domestic supply chain, leading to dependence on equipment and import technology, increasing investment costs, increasing the cost of commercial electricity production, ”Mr. Ha emphasized.
To promote the development of wind power in Vietnam, Mr. Ha proposed that it is necessary to soon complete the legal framework, issue laws and specific guiding documents for the development of offshore wind power. Invest in infrastructure systems, develop specialized seaports, power transmission networks, form domestic supply chains to increase the localization rate. Strengthen training and improve capacity for engineers and experts in the wind power sector to receive industrial technology, self-manage large-scale import-export farms. Create attractive financial mechanisms such as committing to a product coverage ratio, establishing financial support mechanisms, credit guarantees and attracting international investment capital.
