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Review of Regulatory Framework for Renewable Energy Development in Vietnam

This paper analyzes the recent institutional improvements, reforms, and incentives that have led to major changes in renewable energy, with a focus on hydropower development in Vietnam. It highlights the new groundwork being laid for renewable energy but emphasizes the need for defined implementation mechanisms.

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Review of Regulatory Framework for Renewable Energy Development in Vietnam

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  1. IFRERA first year meeting 20-22 July 2005 Lyon IFRERA Progress meeting and workshops Lyon 20 – 22 July 2005

  2. Activity in Vietnam – the task status • Technical FS – Krong Pa 2 Under peer review • Economic and financial analysis : The motivation of the developer is to sell the power to the utility at a profit Underway • Analysis of regulatory, legal and fiscal framework Finalisation • Local level integration : SIA & EIA, community participation First drafts for comments • Full implementation package : Financial packageTo be discussed now

  3. IFRERA – Review of regulatory framework in VN • Objective : Analyze recent institutional improvements, reforms and incentives which lead to major changes in RE, with special attention to hydropower development in VN • The global observation : New ground foundation for RE is laying out, but implementation mechanisms are yet to be defined

  4. Review of regulatory framework (1) • Restructure in Power industry : • Separation of role and responsibilities MoI, EVN, IPP… • Not yet a central regulatory • New electricity law • Extensive RE program in the past. • Alternatives means and ways to economically develop further RE • Big change from previous policy • Great opportunities for small hydro development

  5. Review of regulatory framework (2) • Not yet clear and detailed regulation framework on financing, PPA, tariff, investment for small investors • The review shows the complexity of energy regulation process : • Differentiation by type, scale and by investor but the licenses are obligatory

  6. Review of regulatory framework (3) • The role of market enabler is rather weak in VN, except public funding • Poor performance of old projects – no clear resp. • Net contrast in newly invested projects – more market oriented, more financial accountability • New business model structure for RE services • Commune Elect. Groups (63%) • Power company (EVN) (19%) • Cooperatives (10%) • Local companies (5%) • JSC (new) and private companies

  7. Points to discuss – recommendations? • Capacity building and policy • Central regulatory body • Simplification and facilitate application procedures. • Human resource capacity building • Economic and financial • Tax and duty exemption • Reduce transaction costs • Create funds (investment and R&D) • Clear and fair SPPA • Technical • Technical specifications for RE • Planning process for small scale projects

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