While developed nations are trying to shift the energy they generate with fossil fuels to renewable sources, developing nations face a slightly different, and arguably more difficult task. Not only must developing nations use renewable energy to replace the power they currently get from fossil fuels, but they need renewables to generate the additional power required to further develop their economies. Vietnam is thus looking to its wind power potential, and so are investors.

Vietnam: An Important Case Study

As of 2020, Vietnam accounted for just under 1% of the world’s total carbon dioxide emissions. For comparison, China accounted for about 32%, the US 12%, and international shipping 2%. Given this, it may seem like Vietnam is not a major factor in climate change.

It’s true that countries like Vietnam could stop producing CO2 completely tomorrow and it wouldn’t make any difference to the global climate if countries like China and the US don’t also drastically reduce their emissions. However, Vietnam is significant if you look at growth. Among the top 20 CO2 emitters, no country has seen a larger increase in emissions since 1990 than Vietnam. And it’s not even close. Vietnam’s increase of 1468% is over three times the increase of second place China’s.

Vietnam’s rapid increase in manufacturing has been a boon for its overall economy. But how can Vietnam sustain and even grow their economy while reducing their CO2 output? Vietnam recently pledged to be a net-zero country by 2050 at the 26th Conference of the Parties (COP26). If Vietnam is going to accomplish this, they’ll need wind energy. Thankfully, the wind is there; it just needs to be harnessed.

Vietnam’s Wind Power Capacity

Vietnam has the most ambitious wind power development plan in the Association of Southeast Asian Nations (ASEAN). Their target is 11,800 megawatts (MW) of wind power capacity by 2025. This is about four times greater than Thailand’s target of 3000MW by 2036 and five times that of the Philippines’ target of 2378MW by 2030. But this target isn’t just a lot of hot air; Vietnam has the wind to meet its goal.

With a coastline of about 3,000km and winds that blow 5.5–7.3 meters per second, wind is a good bet for Vietnam. By the end of 2020, their wind power capacity of 600MW was second only to Thailand among ASEAN countries. Vietnam’s offshore wind capacity alone is expected to generate around $60 billion in gross value added (GVA) for the country.

Investment Opportunities

Vietnam doesn’t have any foreign ownership restrictions on renewable energy projects. There are also tax exemptions in place for wind developers for the first four years of their operation. Moreover, a 50% tax reduction will be implemented for the next ten years of operation.

A current lack of regulations and the complexity of offshore wind projects are hindering Vietnam and investors, both domestic and foreign, from realizing the country's wind power potential. But if the government can sort these issues out, this can be a big win-win for everybody involved. With a helpful investment environment and numerous government incentives and policies, renewable energy can grow in a big way in Vietnam.

Stay Tuned with EXIMA

Want to learn more updates on current events? Check out our Media Page today!

#EXIMA #Vietnam #windpower #ASEANmember #windpowerpotential