Golden opportunity: A solar panel rolls off an assembly line in Germany. Vietnam says it has the capability to manufacture components used in renewable energy projects. — Reuters
BINH THUAN (Vietnam): Vietnam can accelerate the localisation rate of the renewable energy sector by granting opportunities to Vietnamese enterprises to provide services to the local wind and solar power industry.
If they have enough time to make preparations, they can engage in the domestic renewable energy supply chain, experts said.
Truong Thi Chi Binh, vice-chair of the Vietnam Association for Supporting Industries (Vasi), said the engagement of Vietnamese firms in the renewables sector is modest and Vietnam mostly imports components for the solar and wind power industry.
Nearly 90% of the supplies for renewable energy projects were imported, primarily from China, Germany, India and the United States, according to the of Technology Development and Innovation Department under the Science and Technology Ministry .
According to the Clean, Affordable and Secure Energy for South-East Asia (CASE) project under the German Agency for International Cooperation (GIZ) Energy Support Programme, Vietnam possesses the capacity to encourage localisation of the home market, with the percentage of solar and wind power rising from 45% to almost 80% and 37% to 55% by 2050, respectively.
Localisation might be worth up to US$80bil, or half of the market’s potential.
The renewable energy’s localisation rate refers to the proportion of industrial components and basic materials that are designed, produced and installed domestically as opposed to those that are imported or provided by foreign suppliers.
Bình said several Vietnamese enterprises are able to manufacture hundreds of individual wind turbine components at a time and sell them directly to foreign wind power companies or major turbine suppliers.
The quantity of the produced components varies, even though the number of enterprises that are able to do so is still low, Binh added.
Certain Vietnamese enterprises can now provide operations and maintenance (O&M) services in addition to producing wind and solar power componentry.
Thuan Binh Wind Power Co in the southern province of Binh Thuan is one of the pioneers.
The business initially used wind turbines that are equipped with European technology.
According to engineer Pham Quang Trieu, deputy head of the company’s technical and planning division, the European supplier not only delivered wind power equipment but also took on O&M work.
Following five years of O&M services from the foreign supplier, the company made the decision to assume O&M work in 2021.
“Our O&M readiness now remains very high at about 99%. At the first stage, we can perform certain tasks that require high expertise such as replacing gearboxes and generators without depending on foreign experts,” he told Viet Nam News.
“The technology of turbines is not overly complex. The mechanics are something we can learn on our own. The most important issue is that we need the replacement equipment.”
Vasi’s Binh said like other industries, if locals want to do something, customers must give them the opportunity to do it.
“Unlike other industries, supporting industry depends a lot on customers. Customers order locals to make something and then we start designing and manufacturing that product. It could take several months or even one or two years,” she said.
She emphasised the value of early planning, saying that in the long run, the market is the most significant factor.
“Renewable energy companies must give Vietnamese enterprises the opportunity to engage in the supply chain by manufacturing replacement parts,” she said.
“According to the National Power Development Plan VIII, Vietnam’s power system would incorporate a substantial amount of renewable energy.
We need a long-term localisation policy from the government.
“If we have a localisation strategy from the beginning and good preparation, then Vietnamese enterprises undoubtedly will join the renewable-energy supply chain. What local firms need is opportunity and time,” Binh added.
Sharing the idea, Professor Le Chi Hiep, lecturer at the HCM City University of Technology, said Vietnamese enterprises are capable of localising renewable energy’s content.
“We have significant markets, human resources, and the ability to expand our market into neighbouring countries,” said Hiep.
“It’s policies that are the issue. We need detailed, stable and long-term policies and guidelines on localisation. Local enterprises will begin investing if the policies are supportive and appropriate.”
Vu Chi Mai, CASE project director, said the participation of Vietnamese businesses need not be for specific products but can be a connecting element.
Although Vietnam has considerable installation capacity for renewable energy, the country has not engaged in the production process. In the future, wind and solar power will account for an increasing proportion of the Vietnamese energy system.
Relying on foreign technologies would come at a heavy cost, she said.
“In order to cut costs, maintain national energy security, and guarantee consumer prices for electricity, state-owned enterprises must be involved in that supply chain. — Viet Nam News/ANN
