Renewable Energy Industry Outlook



“Investment in renewable energy, countries not only find new energy sources, thereby improving people’s lives, but also clean up the atmosphere in their countries”, Erik Solheim – CEO of the United Nations Environment Program (UNEP).

We are in the era of global renewable energy (RE) revolution, with investment capital increasing sharply every year. Since 2004, investment capital in RE has reached more than USD 2.9 trillion. The Paris Agreement on climate change was adopted by countries with the goals of reducing global temperature and greenhouse gas emissions. Experts say that these goals can only be achieved through comprehensive and long-term replacement of fossil sources with clean energy ones. Since then, the investment in renewable energy continues to grow strongly.

Investment growth from countries

2017 marked a record growth of renewable energy with investment growth of 2% year-on-year, at $279.8 billion, total installed capacity reaching 157GW compared to 143GW in 2016. Of which, solar energy accounts for 98GW of total capacity. Electricity produced from wind, solar, biomass, geothermal and small hydroelectricity increased from 11% in 2016 to 12.1% of total electricity in 2017. As a result, carbon emissions were reduced by nearly 1.8 trillion tons.

China China continues to be the leading market player in investment in RE, at $126.6 billion, accounting for 45% of the total global investment. This country also recorded a boom in solar power with the total installed capacity to 53GW in 2017.

Meanwhile, Australia invested sharply in renewable energy, with a growth of 147% and $8.5 million. In Mexico, the figure is 810% and 6 million USD and Sweden with 127% and 3.7 million USD. Other countries also experienced strong investment growth such as Egypt with 2.6 billion USD (x6 times) and the United Arab Emirates (UAE) (x29 times) with 2.2 billion USD.

Investment trends in the upcoming time

Many countries around the world are stepping up investment in renewable energy infrastructure, and it is forecast that the renewable energy industries will contribute to boosting world economic growth with 28 million jobs by 2050.

European countries are pioneers in clean energy infrastructure. Earlier this year, the member states of the European Union (EU) approved the proposal of the European Commission (EC) on investing 873 million euros in major European projects on clean energy infrastructure. The Energy Union is one of the EC’s priorities to change Europe into a clean and modern economy. Sweden, Norway and Switzerland are the top three countries in the world in terms of energy transition; followed by Finland and Denmark. Among them, Switzerland’s energy system is the best in the world. In Switzerland, about two-thirds of electricity is produced by hydroelectricity and renewable energy.

In Asia, many countries are also transitioning to clean energy. China’s National Energy Administration (NEA) said that clean energy is expected to surpass coal in power generation capacity in the country in about 10 years. Being the world’s second largest economy, China has set a goal that in the near future, clean energy will play a dominant role in electricity consumption with 50% non-fossil fuels of total electricity generation capacity by 2030. India also focuses on renewable energy. This country and France co-founded the International Solar Alliance (ISA) in 2016, with the desire to promote solar energy on a global scale. India has launched a renewable energy expansion program and is expected to generate 175 GW of electricity from this energy source by 2022. The Korean government announced a plan to spend about $110 billion by 2030 to build more solar and wind power plants across the country to triple electricity capacity from renewable energy sources.

Renewable Energy in Viet Nam

Vietnam has potentials to develop renewable energy sources, including: small hydroelectricity, wind energy, biomass energy, biogas energy, biofuels, energy from domestic waste, solar energy, and geothermal energy.

According to Power Master Plan VII (adjusted), by 2030, wind power will reach 6,000 MW and solar power will reach 12,000 MW, accounting for 2.1% and 3.3% respectively. Up to now, the Ministry of Industry and Trade has licensed 122 solar power projects with a total capacity of more than 8,000 MW, of which more than 4,000 MW have been signed power purchase agreements before June 2019. Besides, there are more than 200 projects being proposed for development with a total capacity of nearly 17,000 MW.

When it comes to wind power, it developed very slowly in the past despite its high potentials. By the end of 2018, only about 300 MW had been put into operation or in the implementation phase. However, as soon as Decision 39 comes into effect from November 2018, wind power prices will increase to 8.5 cents (onshore) and 9.8 cents (offshore) per kWh respectively, applicable to one part or all grid-connected wind power plants and COD before November 11, 2021. Various projects are proposed to be implemented. This is an important milestone in the field of renewable energy in the near future.

It is believed that RE is a very potential sector for investors. In the upcoming time, the official operation of the competitive wholesale electricity market will witness a major change in Vietnam with many new opportunities and challenges. Therefore, we need to be well-prepapred for investment policy and the market to take the right steps.

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