June’s FIT expiry may bring up to 4 GW of solar online in Vietnam

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Vietnam’s Ministry of Industry and Trade has revealed that, as of Sunday, 34 solar power plants with a total generation capacity of almost 2.2 GW had reached grid connection. That compares with only four PV facilities, totaling 150 MW of capacity, by mid-April.

The Vietnamese government added it expects another 54 solar projects, entitled to the 20-year FIT of $0.0935/kWh introduced in April 2017, to come online next month, after which the FIT scheme will expire. That means another gigawatt or two of capacity may be grid connected next month.

In a statement released on Thursday, the Vietnam Power Group utility said 61 projects were awaiting connection, hinting that in the last six days seven FIT-eligible large scale solar plants achieved commercial operation as staff worked around the clock.

Uninterrupted activity

“In order to meet this historic workload, the National Power System Coordination Center has established a solar power working group to coordinate unified and continuous command throughout the dispatch center,” the ministry said in its statement. “The National Electric System Moderation Center has mobilized human resources to perform three shifts and five shifts, working regardless of weekends and holidays.”

With electricity demand growing at an annual rate of around 10%, Vietnam needs to add 3.5-4 GW of new power capacity annually. “However, in the next two years there will be only about 2,000-2,500 MW of traditional power and about 4,000 MW of renewable energy with unstable properties added to the system,” the Vietnamese government said. “This fact causes many difficulties in operating the power system to balance supply and demand, ensuring national energy security.”

A new incentive scheme

The government wants to introduce new provisions for solar incentives which would replace the 20-year FIT that will remain until the end of June with a two-year solar tariff which would take into account irradiation levels.

With the FIT varying regionally – in a country where the sunny south hosts more than 85% of utility scale solar – tariffs will also differ based on the solar technology used, whether floating PV, ground mounted arrays, projects collocated with storage or rooftop solar.

As reported by pv magazine yesterday, Vietnam overtook India to become the biggest overseas market for Chinese solar panels in the first three months of this year.

According to the latest statistics published by the International Renewable Energy Agency, Vietnam had an installed solar capacity of 237 MW, including rooftop PV, at the end of December. The Southeast Asian country wants to increase the share of renewable power resources to 7% of its national energy mix next year and to 10% in 2030, up from around 4% last year.