Image credits - EQ International
Vietnam’s remarkable achievements in solar and wind power output, accounting for 69% of ASEAN’s total in 2022, have positioned the country as a key player in the region’s renewable energy landscape. Despite this success, industry insiders and experts warn that without a robust long-term strategy and accelerated localization efforts, Vietnam’s energy sector may face challenges in retaining its share of the rising renewable energy market.
According to a recent study by the UK-based think tank Ember, Vietnam contributed significantly to the region’s renewable energy output, estimated at 50TWh in 2022. The country’s stable socio-political environment and government support through policies have made it an attractive destination for investment in solar and wind power.
Vũ Chi Mai, director of Clean, Affordable and Secure Energy for Southeast Asia (CASE), highlighted Vietnam’s potential to boost domestic market localization substantially. Projections suggest an increase from 45% to nearly 80% for solar power and from 37% to 55% for wind power by 2050. This could translate to a value of U.S. $ 80 billion, constituting 50% of the total market potential.
However, despite the favourable conditions, Vietnamese businesses’ participation in the renewable energy sector has been subdued. The market, valued at billions of dollars, remains predominantly controlled by foreign enterprises, as domestic capabilities in the sector are limited. The lack of local production of essential components such as wind turbine housings, rotor blades, and underwater cables contributes to the reliance on imports for 90% of equipment in renewable energy projects.
Experts from CASE emphasize the need for a faster pace of localization and reduced dependence on foreign companies. Drawing insights from China’s successful model, they suggest Vietnam implement conditions for technology leaders to foster local expertise. China’s rapid ascent in the global solar energy sector was facilitated by policies encouraging local production and technology transfer.
To address these challenges, Vietnamese businesses must evaluate capabilities across the wind and solar value chain, invest in research and development, and develop skilled manpower. Industry leaders stress the importance of government support in terms of mechanisms and policies to facilitate technology transfer and investment in modern production lines. Only through these measures can Vietnam reduce production costs, enhance competitiveness, and integrate more deeply into the global renewable energy value chain.