Development of renewable energy in need of green finance

20-Sep-2019 Intellasia | The Saigon Times | 6:02 AM Print This Post

Renewable energy has great potential for meeting the increasing electricity demand if the exploitation and development of renewable energy is supported with preferential policies and financial sources, said the Worldwide Fund for Nature (WWF) in Vietnam at a conference within the framework of Vietnam Renewable Energy Week in 2019 on September 18.

The switch to the use of 100 percent renewable energy by 2025 is feasible, Bnews news site reported, citing Simon James, Climate Change and Energy adviser at WWF.

In 2018, renewable energy projects with a combined output of some 3,460 megawatts ( MW) were commissioned. Some 93 solar power plants and 54 wind power projects with a total capacity of over 10,000 MW were planned.

However, the hindrance to the renewable energy sector is capital. Investment requirements for renewable energy projects remain high, making it difficult for the sector to compete with fossil fuel-based power generation.

The shortage of skilled employees and poor power grid connections have also prevented the development of renewable energy projects.

To meet electricity demand, Vietnam needs some $7.8-9.6 billion of investment per year from 2016 to 2030.

Speaking at the conference titled “Green Finance for Renewable Energy in Industries in Vietnam,” James of WWF noted that the cost of renewable energy projects is in decline, so the construction of wind and solar power plants will be cheaper than that of coal-fired power facilities after 2020.

However, it is necessary to create sufficient motivation for investors in renewable energy projects through preferential policies for feed-in tariffs referring to the price of electricity sold to the national gridand other incentives based on loans and land lease rates.

Sharing his experience in developing renewable energy and green finance in the Asean region, Marlon Joseph Apanada, managing director of Allotrope Partners, in the Philippines, stated that the outstanding loans of Asean Green Bonds totals $1.6 billion.

The capital used for the energy sector accounts for 32 percent of the total.

Apanada pointed out that financial institutions in Southeast Asia are expected to join the green finance system to foster investment in renewable energy and cut funds to fossil fuel-fired power projects.

Building green finance systems will bridge the gap in the investment and development of renewable energy projects in Southeast Asia.

Boosting green finance will help speed up the process of building ecofriendly infrastructure projects, including renewable energy projects and effective energy-usage ones.

It will also help increase the issuance of green bonds and provide loans for the installation of rooftop solar power panels and for the development of energy-saving projects.

Nguyen Duy Thinh, a project consulting director at Solar ESCO JSC, remarked that many investment methods in the rooftop solar power field can be adopted to handle firms’ financial problems.

Thinh took the direct investment method as an example, noting that firms will invest fully in the solar power system, with funding amounting to VND17-20 million per kilowatt peak. These firms will be allowed to use the solar power system as collateral, enjoying loans of 70 percent of the value of the system.

Southern Power Corporation and Vietnam Electricity Group’s HCM City Power Corporation said that since early 2019, the number of customers installing rooftop solar power panels has increased.

However, many of them have complained that the new regulations on electricity purchase prices from electricity firms have yet to be issued.

Dong Nai proposes eight solar power projects

The Dong Nai government has written to the Ministry of Industry and Trade proposing adding eight solar power projects around Tri An Lake to the national power development plan until 2025, the local media reported.

These projects, with a combined capacity of an estimated 5,400 megawatt peak, will cover an area of 7,100 hectares of land in Vinh Cuu, Dinh Quan and Thong Nhat districts.

Vo Tan Nhan, director of the Tri An Hydropower Company, stated that the investment in new facilities on and around Tri An Lake will tap the area’s potential for renewable energy, reduce electricity losses and ease power shortages during peak times, mainly in the dry season.

However, the environmental impact of the projects must be assessed carefully, as Tri An Lake supplies 70 percent of the water used by Vietnam’s southeast region.

https://english.thesaigontimes.vn/71432/development-of-renewable-energy-in-need-of-green-finance.html

 


Category: Economy, Vietnam

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