Vietnam’s Roadmap to 100% Renewable Energy and Net Zero by 2050

On August 29, 2023, a pivotal seminar titled “Discussion on the energy transition roadmap towards 100% renewable energy Vietnam and Net Zero in Vietnam” brought together leading experts and industry figures. This significant event focused on crafting robust policy recommendations to achieve Vietnam’s ambitious goal of 100% renewable energy by 2050. Underscoring the collaborative effort, Mr. An, Pham Dang, Deputy General Director of Vu Phong Energy Group, actively participated, sharing critical insights from the business sector. The discussions highlighted the urgent need for a unified approach to accelerate the nation’s energy transition and commitment to Net Zero emissions.

• Vu Phong Energy Group shares pioneering experience in renewable energy
• Circular economy – The foundation for Vietnam’s sustainable development

Multi-Actor Partnerships for 100% Renewable Energy

The seminar, central to the discussion on 100% renewable energy Vietnam and Net Zero, was a key component of the “Multi-Actor Partnerships for 100% Renewable Energy implementing Nationally Determined Contributions (NDCs)” (100% RE MAP) project. Funded by the German government, this initiative is strategically deployed across Vietnam, Uganda, and Nepal to foster collaboration among diverse stakeholders for a seamless transition to 100% renewable energy (RE). In Vietnam, the project has yielded two seminal reports: “Energy Sector Vision: Towards 100% Renewable Energy for Viet Nam by 2050” and “Policy recommendations to promote the 100% RE transition by 2050 in Vietnam,” providing a robust framework for the nation’s energy transition. These documents are crucial for understanding the roadmap to 100% renewable energy Vietnam.

The seminar witnessed significant participation from numerous experts and business leaders.

Jointly organized by the Vietnam Chamber of Commerce and Industry – Ho Chi Minh City Branch (VCCI-HCM), the Vietnam Business Council for Sustainable Development (VBCSD), and WWF Vietnam, this seminar aimed to disseminate crucial updates on energy sector policies and research findings from the Project to relevant stakeholders. Furthermore, it served as a platform for robust discussions and the formulation of policy recommendations vital for the energy transition Vietnam towards a future powered entirely by RE. This comprehensive project is instrumental in Vietnam’s commitment to achieving Net Zero in Vietnam emissions by 2050 and contributing to the global effort to limit temperature rise to 1.5 degrees Celsius.

Mr. Nguyen Tien Huy, Director of the Business for Sustainable Development Office at VCCI, delivered the opening speech at the seminar.

Energy Sector Vision: Towards 100% Renewable Energy for Viet Nam by 2050

The seminar prominently featured the “Energy Sector Vision: Towards 100% Renewable Energy for Viet Nam by 2050” report, which detailed three prospective scenarios for Vietnam’s energy landscape up to mid-century. These included the Business-As-Usual (BAU) scenario, an 80% Renewable Energy (80RE) scenario, and a definitive 100% Renewable Energy (100RE) scenario. Projections indicate energy consumption could escalate from 65 to 244 million tonnes of oil equivalent (MMTOE) by 2050 under the BAU model, compared to 229 MMTOE in the 80RE scenario and a more efficient 223 MMTOE in the 100RE scenario.

A notable aspect of the 100RE scenario is an approximate 8% reduction in energy consumption compared to the BAU scenario, largely attributable to significantly enhanced energy efficiency across all sectors. Under this ambitious framework, every sector shifts towards utilizing RE through extensive electrification and a transition to renewable fuels. The power system is envisioned to generate all its electricity from renewable sources, effectively phasing out coal and natural gas. This transition necessitates a substantial expansion of solar and wind power capacity, robustly supported by advanced, high-capacity energy storage systems. Furthermore, the electrical grid’s transmission capacity would see an increase of up to eight times that observed in the BAU scenario.

Analysis of the total economy-wide investment requirements reveals that the BAU scenario demands the highest capital, at $5,133 billion USD. The 80RE scenario presents the lowest investment at $3,817 billion USD (26% less than BAU), closely followed by the 100RE scenario with a total investment of $4,089 billion USD (20% less than BAU), highlighting the economic benefits of pursuing a full 100% renewable energy Vietnam pathway.

Policy Recommendations for Renewable Energy Integration

The research findings underpin comprehensive policy recommendations for renewable energy integration Vietnam into the national power system. These recommendations advocate for robust incentives to accelerate the adoption of RE solutions, enhance the operational flexibility of power sources, and significantly improve energy efficiency. Furthermore, they emphasize the promotion of electric vehicles and diverse transportation modes powered by renewable fuels, crucial steps for the country’s energy transition.

Achieving 100% RE necessitates creating incentive mechanisms for RE solutions and enhancing flexible power source operations.

Assoc. Prof. Dr. Luong, Pham Hoang, Director of the Vietnam-Japan International Institute of Science and Technology at Hanoi University of Science and Technology, highlighted two pivotal strategies for Vietnam’s 100% RE objective: electrification paired with enhanced energy efficiency, and RE coupled with energy storage. His extensive renewable energy policies roadmap, extending to 2050, suggests that energy sector planning must incorporate policies for seamless RE source integration, expansive power grid development, substantial investment in offshore wind power, and better integration of energy storage systems. He further provided detailed recommendations on institutional structures, pricing models, energy contracts, energy access, and decentralized energy solutions. For the immediate horizon leading up to 2030, Assoc. Prof. Dr. Luong, Pham Hoang specifically proposed four key actions: integrating RE development into the electricity sector, electrifying transportation, developing offshore wind power, and rigorously aligning climate change objectives with Vietnam’s Nationally Determined Contribution (NDC) targets.

The Role of Businesses in Achieving 100% Renewable Energy

Ms. Mai, Vu Chi, Director of the CASE project, provided valuable insights into accelerating global energy transition Vietnam trends during the seminar. She specifically cited ambitious RE electricity production targets in nations like Germany (100% RE by 2035) and Sweden (100% RE by 2045). Ms. Mai, Vu Chi underscored that while the path to 100% RE offers substantial environmental and economic advantages, it is also fraught with significant challenges. These include securing adequate financing, overcoming technological hurdles, upgrading grid infrastructure, establishing supportive policy frameworks, and addressing land allocation complexities. Understanding the businesses role in renewable energy Vietnam is paramount for navigating these challenges effectively.

Vu Phong Energy Group’s Contribution

A pivotal segment of the program was the Panel Discussion, featuring a distinguished lineup of energy sector experts and prominent business leaders. Participants included Assoc. Prof. Dr. Luong, Pham Hoang; Mr. Thinh, Bui Van, Chairman of the Binh Thuan Wind and Solar Power Association; Mr. An, Pham Dang, Deputy General Director of Vu Phong Energy Group; Ms. Trang, Bui My, Energy Program Manager at HSBC Bank; and Mr. Trung, Nguyen Thanh, 100RE-MAP Project Manager at WWF Viet Nam. The insightful discussion was skillfully coordinated by Dr. Tuyen, Nguyen Duc, Director of the Electrical Engineering and Renewable Energy Training Program at Hanoi University of Science and Technology, showcasing the deep expertise brought to the table.

Mr. An, Pham Dang, Deputy General Director of Vu Phong Energy Group, shared valuable insights during the Panel Discussion.

During the Panel Discussion, speakers collaboratively explored the opportunities and challenges inherent in the energy transition Vietnam is undertaking. They extensively deliberated on the critical businesses role in renewable energy Vietnam, particularly in achieving 100% RE and Net Zero goals. Discussions also covered key policy, technological, and financial considerations that companies within the renewable energy sector, as well as those actively adopting RE, can leverage to maximize the potential of these sustainable energy sources. Drawing from his extensive practical experience working with businesses, Mr. An, Pham Dang, Deputy General Director of Vu Phong Energy Group, provided firsthand perspectives on general trends in RE usage and specifically rooftop solar in manufacturing businesses. These efforts aim to meet evolving green standards and integrate Environmental, Social, and Governance (ESG) practices, aligning with pervasive global trends. Mr. An underscored that the Power Purchase Agreement (PPA) model, involving investor participation, remains an optimal solution for businesses. This model effectively addresses financial barriers by eliminating the need for initial investment and system operation costs, allowing companies to access solar power at a reduced expense, with the system being transferred for free after contract completion.

Mr. An, Pham Dang presented compelling global data, noting that 929 out of the world’s top 2,000 public companies (Forbes Global 2000) have committed to Net Zero targets, according to Net Zero Tracker. Concurrently, the RE100 initiative, which encourages major corporations to use 100% renewable electricity, boasts over 400 members, including numerous multinational and industry-leading enterprises worldwide. He pointed to significant international legislative actions, such as the European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM) – a crucial step towards greenhouse gas emission reduction and achieve carbon neutrality by 2050 – and similar considerations in the United Kingdom. Furthermore, the United States has enacted the Clean Competition Act and the Inflation Reduction Act (IRA) to foster a carbon-neutral economy by 2050. These developments clearly signal a robust global trend towards sustainable energy.

This global imperative highlights the urgency for Vietnamese businesses operating within international supply chains to adapt. It also underscores the critical need for developing a robust carbon credit market in Vietnam. With businesses facing mandates for emission reduction according to Decree 06/2022/NĐ-CP, the establishment of the carbon credit market, alongside the trade of International Renewable Energy Certificates (I-REC), will significantly drive demand for rooftop solar in businesses. Looking forward, the carbon-neutral business trend is expected to stimulate the development of integrated solar power with energy storage solutions, electric vehicles, carbon capture technologies, and more.

Manufacturing enterprises are uniquely positioned to leverage favorable conditions for utilizing renewable energy. By embracing Environmental, Social, and Governance (ESG) principles, they can enhance their competitiveness and play an indispensable role in Vietnam’s journey towards 100% renewable energy – as articulated by Mr. An, Pham Dang.

Vu Phong Energy Group

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