Renewable Energy in Vietnam

In spite of Vietnam´s current dependency on fossil fuels and coal, the Vietnamese government actively supports renewable energy, and the sector is thereby becoming increasingly interesting for Dutch companies and organisations. While realising the challenges, business opportunities can be found in biomass, wind and solar energy.

With a population of over 90 million people, Vietnam has the third largest population in Southeast Asia after Indonesia and the Philippines. Since the mid-eighties, the country has transitioned from the rigidities of a centrally planned economy into one of Asia’s fastest growing emerging markets. It reached lower middle income status in 2010 and is a member of WTO and regional forums, including the Association of Southeast Asian Nations (ASEAN). After several years of lower economic growth, Vietnam’s economy is gaining momentum again and is expected to grow by 6-7% annually in the upcoming years. Currently, the country has negotiated several Free Trade Agreements (FTAs), including one with the EU that is expected to be in place in 2018.

Due to both rapid industrialisation and remarkable economic growth, domestic energy consumption levels have increased with almost double the speed of Vietnam´s already high GDP growth levels, growing on average by approximately 12% per year between 2006 and 2016. Diffrent estimations of energy demand in Vietnam vary from increasing threefold to eightfold from 2015 to 2030.

According to the Boston Consulting Group, Vietnam’s middle and affluent class will double in size between 2014 and 2020, from 12 million to 33 million. By 2020, Vietnam’s average per capital income will rise from USD 1,400 to USD 3,400 a year.