In a report that as yet we can only find in Asian journal Focus Technica, Vietnam seems to be on the verge of a massive step into solar capacity attached directly to the grid. The move originally came in 2017 with a feed In tariff, but with a deadline of grid connection by June, suddenly some 2.2 GW of solar plants have attached to the Vietnam Electricity grid run by Vietnam Power.
To put this in perspective, in the middle of April a handful of solar plants
with a combined capacity of 150 MW were grid connected. Suddenly that has risen to 34 solar projects connected, providing peak capacity of 2.2 GW. In total the Vietnam government is expecting 88 FIT-entitled solar facilities to come online by the end of next month, so another 54 projects.
Suddenly Vietnam is the largest overseas market for Chinese panels, overtaking India in Q1, at a time when virtually no solar capacity was added in China (just 5 GW compared to an anticipated 11.5 GW). What would have happened to panel prices without a neighbor having this huge deadline, we’re not sure.
But the promise of a 20 years feed in tariff (FiT) set at $0.0935 per kWh may expire but the new FiT replacing it is only a touch lower at $0.092 in one region, but falls to $0.0709, $0.0791 and $0.0667 in the three other regions. Most solar is installed in the very sunny south of the country. The earlier tariff was constant from any part of Vietnam previously, so for three quarters of the country there is a huge incentive to get in before the deadline.
That’s enough of an incentive that the government is expecting about 1.8 GW to 2 GW more of power to be grid connected over the coming month.
The accelerators came on when the new FiT was published in February by the Ministry of Industry and Trade of Vietnam and the amount the FiT was to fall was finally public. The new FiT program will be in place for the next 2 years until 30 June 2021.
The new FiT is also split by underlying technology with floating solar, and systems with integrated storage and rooftop solar all separated out at different prices. Distributed solar on rooftops will be rewarded with far higher FiT tariffs than behind the meter plants over the coming two years.
One of the problems is going to be using all that capacity, as given that it is all intermittent, it will not be able to offer frequency response, when the frequency of the grid begins to lag. It is a rule of thumb that roughly 30% of resources can be intermittent before a grid gets into problems. So it is likely that given this is closer to 5% of Vietnam’s current energy needs, that the connection of this much solar will not destabilize the grid. Vietnam wants to have 10% of its energy from renewables by 2030 (not counting hydro which makes up 40% on its own), up from around 4% last year.
Electricity demand in Vietnam is growing at 10% a year, and so it needs to add just under 4 GW a year. Vietnam is planning about 2.5 GW of traditional power and 4 GW of renewable energy this year.