Hanoi (VNA) – The World Bank (WB)’s new approaches to bidding anddeployment for solar projects will help Vietnam substantially boost andeffectively manage its abundant solar energy resources.

Such approaches could boost Vietnam’ssolar generation capacity from the current 4.5 gigawatts to the tens ofgigawatts range in ten years, while creating thousands of new jobs, accordingto the new World Bank VietnamSolar Competitive Bidding Strategy and Framework report.

The deployment of new solar generation will be a critical factor for the Governmentof Vietnam to meet its Nationally Determined Contribution (NDC) climate changetarget and reduce its need for new coal generation.

The report comes as Vietnam isconsidering moving from a feed-in-tariff (FIT) policy to a competitive biddingscheme for solar projects to reduce the cost of solar generation. The FIT hasbeen successful in recent years, spurring the fast deployment of projects at atime when Vietnam has also become a world leader in solar module manufacturing.However, this success has also given rise to new issues, including curtailment- or underuse of solar generation capacity.

The report, supported by the Global Infrastructure Facility (GIF) and the World Bank’s Energy Sector Management Assistance Program (ESMAP), recommends two new deploymentschemes for projects: competitive bidding for solar parks, and‘substation-based bidding’ - competitive bidding based on available capacity atelectrical substations. These approaches would address the curtailment issue aswell as improve risk allocation between public and private investors.

The first pilot tenders -500 MW for substation-based bidding and another 500 MWfor ground-mounted solar parks- are being planned for later in 2020 with thetechnical and financial support of the World Bank.

“The WB is fully committed to helpingVietnam achieve its sustainable energy ambitions,” said WB Country Director forVietnam Ousmane Dione. “We expect that this new strategy will open up a newchapter in Vietnam’s already successful solar power expansion.”
Besides, the report recommends settingyearly and medium-term solar deployment targets and revisions to the legalframework covering the competitive selection of independent power producers.

The report estimates that the expansion in solar generation capacity in Vietnamcould generate as many as 25,000 new jobs in project development, services andoperations and maintenance annually through 2030 and another 20,000 jobs inmanufacturing provided Vietnam maintains its current share of the global solarequipment market.

According to General Director ofElectricity and Renewable Energy Authority under the Ministry of Industry andTrade Hoang Tien Dung, the WB’s support to the Government’s effort in shiftingfrom FIT to a competitive bidding mechanism for solar power projectscontributes to the sustainable and transparent development of renewable energyin Vietnam by harmonising the interests of private investors, the Governmentand customers./.