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Market Plans

Vietnam Environmental Export Market Plan
Chapter 10 - Renewable Energy

Current Trends

Vietnam's national power company, Electricity of Vietnam (EVN), has a mandate to supply electricity to 80 percent of Vietnam's households by the year 2010. Currently, less than 50 percent of rural households have electricity. Rural electrification via extensions of the centralized power grid is prohibitively expensive given the costs of new infrastructure and the economic status of rural residents.

The government's efforts to increase rural electrification have focused on promoting the use of renewable energy. The World Bank agrees with this strategy and has provided $95,000 to help local authorities implement renewable energy projects. Local companies now manufacture family and small community micro-hydro-units, solar heaters, solar photo voltaic, family wind turbines, and family and community biogas digester systems.


Vietnam has long used micro-hydro for energy needs at the family and small community level in rural areas. Since 1955, the government has funded research and implementation of small-scale hydro power to electrify rural and mountainous areas. Over 400 small hydro stations are now in place with a total installed capacity of 30 megawatts. The stations supply electricity to over 1 million people in 20 mountainous and remote provinces.

On a smaller scale, it is believed that over 100,000 micro-and family-hydropower generators are now in use. Local, state-owned facilities such as the Ho Chi Minh City-based Research Center for Thermal Equipment and Renewable Energy (RECTARE) and the Hanoi-based Hydro Power Center produce units ranging in capacity from 100 watts to 1,000 kilowatts. However, systems imported from China that retail for roughly $20 per unit have the majority of the market share, especially in northern mountainous regions.

Some private companies are becoming active in the micro-hydro market. Danish development aid has financed one such company, focused on building mini-hydro electric dams. Privately owned Viet Phong Co. teamed with Den Elec to consult on renewable energy projects. The companies are helping Lam Dong Province to construct a small hydroelectric plant. The firms also provide consulting services on thermal electricity, wind energy, hydro energy, solar energy, and improving efficiency of electricity transmission and distribution.


Solar Lab, at the Institute of Technology in Ho Chi Minh City, and the Institute of Energy in Hanoi are the leading institutions focused on research and development of solar-powered generation systems.

Vietnam has over 110 monitoring stations throughout the country to track data on solar energy resources. On a countrywide basis, average total annual insolation ranges from 4 to 5 kilowatt hours per square meter per day.

There are currently five large-scale solar photovoltaic power systems in Vietnam. These include a hybrid system of solar photovoltaic (PV) and micro-hydro power generation in Gia Lai province that has a capacity of 125 kilowatts (PV has 100 peak kilowatts). Ninety percent of the financing for the project came from Japan's New Energy and Industrial Technology Development Organization (NEDO).

The government has financed construction of 100 solar home systems and 200 solar community systems for inhabitants of islands off the northeast coast. Total capacity of these systems is 25 peak kilowatts. Four hundred solar home systems were built for communities in Tien Giang and Tra Vinh provinces with a total capacity of 14 kWp.

According to the Institute of Energy, three large PV projects to be built over the next two to four years are now in the planning stages. Ten hybrid systems (PV and diesel), with a capacity of 10 kilowatts each, are being built with funding from the German government and EVN. Tohoku of Japan is considering funding a hybrid system of PV and wind-power generation in Dak Lak province. The system would also have a capacity of 10 kilowatts.

Electricité de France and the French Ministry of Foreign Affairs have pledged $1.5 million to finance solar power programs in three southern provinces (Gia Lai, Quang Nam, and Binh Phuoc) from 1999 –2002. The Vietnamese partners to the project are MOSTE, Electricity of Vietnam, the Committee for Ethnic Minorities, and Solarlab.


The Research Center for Thermal Equipment and Renewal Energy (RECTARE) is the primary organization developing and promoting wind-energy technologies. The center is under the Ho Chi Minh City Technical University and has been granted permission by the Ministry of Planning and Investment to build and sell renewable energy products.

To date, RECTARE has installed over 800 wind generators in over 40 provinces and towns throughout Vietnam. The largest number of these units have been installed near Nha Trang, in Khanh Hoa province on the south central coast, where 135 units are in use. Nha Trang is also home to one of only two wind villages in Vietnam. The village was financed by MOSTE and by the Swiss-Vietnam Association. The second wind village is located on Can Gio island near Ho Chi Minh City, where 50 units have been installed through the support of the French aid agency Agence de Coopération Culturelle et Technique (ACCT).

Nearly all of the units are for small-scale,household use only. The generators in Nha Trang, for example, are capable of charging one or two 100-ampere-per-hour batteries per day. Each unit costs about 5 million dong ($353) to build and install, according to RECTARE. RECTARE has built all of the generators producing 200 watts or less of electricity. Units producing 500 watts to 90 kilowatts of electricity are manufactured in Vietnam but use some imported parts.

RECTARE officials have expressed interest in purchasing higher-grade, small-scale wind turbines and generator technology from foreign suppliers. These purchases would be for 300 watt, 500 watt, or 1 kilowatt units.

A second group responsible for developing wind-energy technologies is the Institute of Energy in Hanoi. However, the Institute has neither the technology nor the equipment to produce units on their own and must be supplied with equipment by RECTARE in Ho Chi Minh City.

The Institute of Energy is preparing feasibility studies for larger-scale wind farms. One is a 20 megawatt wind farm in Khanh Hoa province. EVN and Germany's VENTIS are in discussions to build the farm under a build-operate-transfer (BOT)contract. A second wind farm with a capacity of 30 megawatts is proposed for Binh Dinh province. The project would be funded by Japanese aid. EVN plans to fund a third wind farm, also in Khanh Hoa province, with a capacity of 20 megawatts.


Biomass and wood fuel account for about 57 percent of primary energy consumption in Vietnam. Besides wood, agricultural residues and agro-industrial residues are the main biomass fuel sources. Most of these fuel sources are used on a household level.

Rice growers create about 45 million tons of paddy straw annually, accounting for over 90 percent of the waste. It is used as fuel and as livestock feed. It is also used as a bio-fertilizer via field burning.Roughly 3 million tons of sugar cane trash, coconut shells and leaves, and cassava stems are produced annually, accounting for about 6 percent of the combined waste. This waste is used primarily as fuel or fertilizer at the household level.

Foreign investors have prepared feasibility studies on the use of urban biowastes for power generation, although no major commercial biomass plants are yet in operation. There is an Australian-funded project in the works for Long An province. It will burn rice husks and produce 50 kilowatt hours of electricity.

The government is still considering the $106 million BOT plant in Ho Chi Minh City backed by American and British investors. The proposed project would include construction of a waste plant capable of treating 1,500 to 3,000 tons of waste per day, generating 15 megawatts of power, and up to 480,000 tons of NPK per year. The project is in discussion stages with the Ho Chi Minh City Department of Urban Planning and Transportation.

The central problem for these co-generation/waste projects has been price. The cost to produce a kilowatt hour of power from solid waste is expensive (around 10 to 12 cents per kilowatt hour). However, EVN can only charge its customers half that amount, so it is willing to buy power at no more than 6 cents per kilowatt hour. Until price reform takes place, bio-waste projects (and other types of renewable - and usually expensive - power generation) may simply be too expensive.

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