Dau Tieng Solar Power Project in Vietnam. (Photo: Wikimedia Commons)
According to a report from the London-based energy think tank EMBER, Vietnam accounted for 69% of ASEAN's solar and wind generation in 2022. Experts generally agree that Vietnam leads other ASEAN countries regarding total installed capacity and project development in renewable energy. However, there are concerns about insufficient localization. It may be like the automobile or ICT industry that relies too much on foreign companies, local companies undertake only low-cost processing and assembly work, or even cannot produce any simple components.
Vietnam's renewable energy initiatives heavily rely on imports, with around 90% of the equipment sourced from abroad. Vu Chi Mai, Director of the Clean, Affordable, and Secure Energy for Southeast Asia (CASE) Project under the German International Cooperation Agency (GIZ), expressed that the participation of local enterprises in Vietnam's renewable energy industry remains low. Specifically, in onshore wind power, no companies are capable of manufacturing nacelles, hubs, blades, and submarine cables.
Regarding solar panel manufacturing, a report from Vietdata, a Vietnamese market research firm, highlighted the top 3 net operating revenues of solar panel companies in 2022 including Vina Solar, JA Solar, and First Solar are foreign-owned companies. Among them, Vina Solar had the highest one with net operating revenues reaching 34 trillion Vietnamese dong (approximately USD 1.4 billion), while IREX Energy is the only Vietnamese firm mentioned in the report, had a net operating revenue of only 350 billion Vietnamese dong (about USD14.58 million).
Vietnam Electricity Group (EVN) reported that the total power generation capacity of Vietnam's electrical system reached nearly 79,350 MW by the end of 2022. Particularly, renewable energy sources (wind and solar power) are approximately 20,165MW, accounting for 25.4%. Vietnam's National Power Development Plan 8 (PDP8) prioritizes the development of renewable energy sources, aiming to increase the total installed capacity to 30.9%-39.2% by 2030. However, industry experts indicate that without a long-term development strategy and active promotion of localization, Vietnamese enterprises would not be able to compete for market share.
Vu Chi Mai also mentioned that Vietnam's political and social stability is an incentive for international businesses to invest in the country. Vietnamese enterprises have advantages in participating in onshore and offshore wind power and solar power localization. According to the Wind and Solar Power Development Plan for 2025-2050, localization could bring Vietnam profits of $160 billion. This amount is equivalent to 1.02% of the GDP during the same period and is expected to surpass the total revenue from the industrial and construction sectors in 2022 (USD 155 billion).
Nevertheless, she emphasized that to absorb technology from foreign direct investment (FDI), Vietnamese companies need to continuously assess the capabilities of participants in the wind and solar energy industry chain, including their supporting industries. This involves promoting research and development activities, technology transfer, pilot projects, and cultivating professional human resources to facilitate maximum localization.
Besides inadequate market assessments, technological capabilities, failure to meet manufacturing standards, and insufficient infrastructure, industry experts believe that the slow progress of localization in Vietnam is also due to the incomplete supporting policies by the Vietnamese Government.
Dinh Van Tuan, Deputy General Director of Ba Son Corporation, a Vietnamese shipbuilding company, indicated that Vietnam is a latecomer. Therefore, in technology transfer and bringing in advanced production lines, domestic enterprises rely on the support of government policies and mechanisms to reduce product costs, improve competitiveness, and integrate more deeply into the global value chain.
