Energy Sector Players Seek Deeper Innovation to Accelerate Transformation

Nguyen Mai Duong, director of the Department of Technology Development and Innovation at the Ministry of Science and Technology, told the Vietnam Energy Transformation Forum 2024 held in Hanoi last week that Vietnam’s electricity consumption will increase by about 15 percent in 2024.

“Electricity demand will grow by about 8-10 percent annually in the coming years,” Duong said. “In addition to implementing synchronous solutions and optimizing existing energy supply, transmission, distribution and use systems, investing in and developing new solutions is also an urgent need for Vietnam.”

The rapid growth in the number of variable renewable energy sources requires greater flexibility of the power system, and in addition to traditional technologies, it is necessary to invest in new technologies to increase the flexibility of the system, he added.

“Innovation requires a diverse group of participants, including governments, researchers, investors, entrepreneurs, corporations and civil society. All of these groups contribute significantly to generating ideas for new or improved technologies,” Duong said.

Fabian Hartjes, second secretary of climate diplomacy at the German embassy in Vietnam, said that according to the International Renewable Energy Agency, Germany would rank fourth in the world in terms of installed capacity in 2023, although its sunshine hours indicator is modest compared with Southeast Asian countries.

“We highly value the investment-attractive environment in Vietnam and see business opportunities here. German companies will increase their investments here and are always ready to share renewable energy technology with Vietnam,” Hartjes said. “Innovative technologies have proven to be highly effective and have actively supported our energy transformation, as well as many other countries, and renewable forms of energy and efficiency will shape our new world.”

Hartjes added that the transformation process requires cooperation from public and private agencies, and the opportunities for cooperation between Vietnam and Germany are enormous.

Experience shows that four basic elements are needed for the transformation to be successful: a competitive economy, an open market, a supportive policy and, above all, technology, says Philipp Munzinger, Director of the Energy Support Programme at the German Development Agency.

“The main trends in the current energy transformation include economy and efficiency, promoting the development of renewable energy sources in the power industry, green transportation and green hydrogen,” he said. “Most of the new electricity capacity will come from solar and wind power, given the increasing competitiveness of renewable energy prices and the costs associated with electricity generation.”

Munzinger added that solar power generation and storage is leading the way in renewable energy technologies that are becoming increasingly large. “This benefits investors and also contributes to energy security and grid stability. That’s why solar power generation and battery storage technology require policy development,” he said.

Technology is also helping to reduce the cost of generating electricity from renewable sources. The levelized cost of energy (LCOE) for solar power in Vietnam has fallen sharply, thanks to technological advances and an increase in the size of the market. Data from BloombergNEF, an energy research firm, shows that the LCOE for a solar plant is $53-$105 per MWh (actual prices in 2022), making it arguably the most important, cheapest and most competitive source of electricity generation in Vietnam.

As with wind power, the LCOE of wind power has also fallen significantly, to $65-154/MWh. Offshore wind, in particular, is becoming a high-potential area, with increasingly reasonable costs and stable electricity production capacity.

Broad participation can accelerate the country’s energy transformation Vietnam is implementing energy transformation with synchronous solutions and collective contributions from society.

Renewable energy on the table for Vietnam Vietnam is considered a fertile ground for the renewable energy industry, according to the forum, which was held on May 28-29.

Speeding up the switch from brown to green The greening of the economy is supported by a wide range of stakeholders, including energy transformation, business changes and government policy.