Hanoi (VNA) - Relevantauthorities need to have preferential policies regarding prices and tax rates,and those providing support for investors in accessing loans for renewable energyprojects, said insiders.

Renewable energy plays a crucial role and isan essential requirement for sustainable development. However, in recent years,after the boom in solar and wind power, many clean energy projects have almostcome to a standstill.

According to Nguyen Viet Dung, Vice Chairman of the Board of Directors of Halcom Vietnam, it is also necessaryto soon perfect the legal framework, including guiding documents for implementingthe National Power Development Plan VIII (PDP8), incentive mechanisms, direct power purchaseand sale contracts for projects, so that investors can have a basis for calculationand investment preparation.

Policiesfor renewable energy development are not really clear, especially in negotiationsof electricity purchase and sale contracts, and electricity selling prices,Dung said.

He added that there are no documents and regulations guiding theimplementation of renewable energy projects after the approval of PDP8; and atthe same time, preferential policies are currently not attractive to foreigninvestors.

Nguyen Anh Tuan from the Vietnam EnergyAssociation said there are three significant challenges that impact the energytransition in Vietnam, including future electricity pricing, demand for loadbalancing, and building green hydrogen strategy.

The legal framework has allowed all economic sectors to investin the transmission grid, but there are no legal documents guiding theimplementation, Tuan said.

He underlined the need to study and issue a detailed RenewableEnergy Law soon, focusing regulations on promoting Vietnam's energy transitionin the near future.

Supporting mechanisms and policies must be detailed in the lawto ensure stable and long-term support for sustainable and reasonable energytransition in the country, he said.

The Government's supportive mechanisms andpolicies in recent times have led to a remarkable leap in the development ofrenewable energy in Vietnam, said insiders.

From having a negligible capacity in 2018,renewable energy sources now account for about 30% of the total capacity in thenational power system.

According to international recommendations,countries that pursue low-carbon development strategies will have more opportunitiesto access resources for economic development in the 21st century.

Expertssaid that Vietnam’s mechanisms to encourage the development of renewable energyhave not yet shown a long-term orientation, and many policies remain inadequate.

Financial institutions and commercial banks often hesitate toprovide loans for renewable energy projects due to the highcapital requirements and risks involved.

Energy expert Nguyen Van Vy said that the renewable energymarket needs clear policies and legal procedures to attract more attention frominvestors./.