Vietnam is leading its Southeast Asian peers in transitioning its grid to renewable energy, with the country’s utility-scale solar and wind power capacity accounting for nearly 70% of the region’s total.

According to a new report from Global Energy Monitor, Vietnam has about 19.5 GW of operating utility-scale solar and wind capacity, more than double the combined capacity of all other ASEAN member countries. It accounts for 25% of Vietnam’s total energy mix, surpassing the ASEAN average of 9%.

But, the report warns that Vietnam faces significant hurdles in integrating this renewable energy into its grid and maintaining momentum in the sector.

Vietnam’s renewable energy boom was largely driven by competitive feed-in-tariff (FIT) programs implemented between 2017 and 2020. These initiatives propelled solar development, with the country adding over 12 GW of utility-scale solar capacity from 2019 to 2021 alone.

However, the report said that the expiration of these FIT programs, the lack of a replacement pricing policy, and COVID-19 pandemic-related supply chain disruptions have slowed the pace of renewable energy growth in Vietnam. In 2022, the country commissioned only 1 GW of new capacity, against nearly 4 GW in 2021.

The report also notes that some renewable energy projects have been curtailed to as low as 13% of their production capacity due to insufficient grid infrastructure.

Global Energy Monitor has identified over 86 GW of prospective utility-scale solar and wind capacity in Vietnam, including a staggering 72 GW of potential offshore wind projects along the country’s 3,260 km coastline.

Yet only 2% of this prospective capacity is currently under construction. The report cites a lack of clear and reliable renewable energy policies deterring investors from progressing with project development.

Vietnam has also been successful in attracting China-based manufacturers of polysilicon – a key component of solar panels, as they tried to skirt U.S. regulations.

Upcoming projects

Most of the upcoming utility-scale solar and wind projects among ASEAN countries (over 80%) are in the Philippines and Vietnam. Over 185 GW of the projects announced are in the pre-construction and under-development stages. However, only 6.3 GW (3%) of all the new capacity announced in ASEAN is currently under construction.

With 99 GW and 86 GW of upcoming utility-scale solar and wind projects, the Philippines and Vietnam are the 8th and 9th largest markets worldwide for new capacity in the pipeline.

Indonesia has 16.5 GW of utility-scale solar and 2.5 GW of wind projects in the pipeline. However, no projects are currently under construction.

ASEAN Offshore Wind Potential

Collectively, ASEAN nations boast over 28 GW of operating utility-scale solar and wind capacity, marking a 20% jump since January 2023. Although far behind Vietnam, Thailand and the Philippines account for 6.1 GW, nearly 21% of the total installed capacity.

Notably, the report highlights that ASEAN countries, thanks to their extensive shorelines, have almost five times more prospective offshore wind power than onshore wind, with offshore projects totaling 124 GW – nearly double the current global offshore operating capacity.

However, despite the prospective utility-scale wind and solar capacity of 220 GW across the region, only 3%, 6 GW, is currently under construction. This figure falls well below the global average of 7% (excluding China), indicating slower progress in bringing projects online.

The ASEAN bloc has set a collective target of sourcing 35% of its total installed capacity from renewable energy by 2025. While this goal appears within reach – the region currently stands at 32% renewable capacity – the report suggests that this target may be unambitious given the vast growth potential.

Earlier this month, the United States International Trade Commission decided to proceed with investigations into crystalline silicon photovoltaic cells, whether or not assembled into modules originating from the southeast Asian nations of Cambodia, Malaysia, Thailand, and Vietnam.