UK Ambassador steps out to support “booming” Vietnamese solar sector

The British Ambassador to Vietnam Gareth Ward made an official visit to HCMC-based solar energy developer Shire Oak International on 24 June, where he said Vietnam is “poised” to lead the sustainable energy transition in South East Asia.

Shire Oak International, a UK based investor and developer of solar energy, currently has a pipeline of over 720 projects in Vietnam, valued at USD $1.9 billion (VNĐ 44 trillion). The firm installs industrial-scale solar systems onto the factory rooftops of manufacturers across the country.

The British Ambassador visited the company’s new offices in on Nguyen Van Huong Street, District 2 of Ho Chi Minh City. He was joined by Sam Wood, Deputy Consul-General and Head of Trade and Investment at the British Embassy and Vuong Thi Khanh An, Trade Manager and Nguyen Ngoc Thanh Truc, Events and Visits Officer, also from the British Embassy.

Commenting on his visit, Ambassador Wood said: “Since 1990, the UK has reduced emissions by 42% while expanding the economy by 72%. It’s a stellar example that there need not be a trade-off between economic growth and sustainable energy use. I’m pleased to see Vietnam has come to a similar conclusion and grown its renewable energy sector significantly since 2019. Vietnam is poised to be a leader of the sustainable energy transition in South East Asia.”

Shire Oak International’s Chief Operating Officer Borries Plass said: “We are delighted to welcome HMA Gareth Ward and his team to Shire Oak International. This is an exciting opportunity for our company and demonstrates the passion for solar energy that is shared by the government and businesses both in the UK and Vietnam.”


Businesses save “millions of dollars” with solar

Shire Oak International has a strong track record as a renewable energy investor and developer in the UK and Europe, including seeding the world’s first-ever tidal lagoon at Swansea Bay and the UK’s largest solar project at West Raynham, as well as spearheading solar energy in Spain.

Earlier this month the firm announced it had completed the first eight of its projects in Vietnam totaling USD $7.4 million (VNĐ 172.1 billion). These include projects for manufacturers The Le Tran Group, Galaxy Cotton, and BOHO Décor.

During his visit, Ambassador Wood made a visit to BOHO Décor’s factory in Long An, which has installed a 998 kWh solar system on its rooftop. Shire Oak International says this is capable of offsetting 863 tonnes of Carbon Dioxide (Co2) emissions every year.

Commenting on his company’s rooftop solar system, BOHO Décor’s Operations Director, Nguyen Minh Hoang, said: “Shire Oak International (SOI) provided us with an ideal solution. During the construction phase of our factory, we thought about how we could play a part in preserving Long An’s environment. SOI helped us do just that. Their solar system reduces our energy cost while causing no harm to the environment. We are very happy to see our electricity bills reduced by about 15%. Also, the fact that our factory’s temperature during operation is lower by 5 to 7 degrees Celcius, while easily overlooked, pleased us greatly.”

Mr. Hoang added that he looked forward to being able to cover more of his roof surface with solar panels: “Currently, we are able to cover about 60% of the operable surface, which translates to an output of 1 MWh. It would be better if the government allowed us to bring that number to 100%. At the moment, if we did that we would be regarded as an energy farm and would be taxed accordingly. We’d like to see changes to the policies so more clean energy can be produced. Only then can we reduce our use of traditional energy sources.

Shire Oak International operates a lease model in which companies pay nothing to install a solar system, instead of paying a regular fee over the lifetime of the contract for the use of the energy. Shire Oak International says the fee is guaranteed to be less than paying for standard energy.

Leases usually last between 15 and 20 years, after which ownership of the system is transferred to the customer. Shire Oak International calculates that manufacturers in Vietnam can save up to USD $4 million (VNĐ 93.2 billion) in energy costs over a 20-year lease.

Government support for solar

This year the Vietnamese government has stepped up its support for solar energy, announcing in February its target for 20 percent of all of Vietnam’s electricity to come from renewables by 2030, including 12GW of solar capacity.

In April this year, Vietnam’s Deputy Prime Minister Trịnh Đình Dũng underlined this ambition, announcing a new feed-in tariff for suppliers of renewable energy in Vietnam.

The new rooftop solar tariff now stands at VNĐ 1,940 ($0.0838) for each kWh generated. This is a 10% discount compared to previous tariff prices and will support the development of renewable energy throughout Vietnam.

Currently, just 8 MW of a potential 7,140 MW solar capacity has been installed in Vietnam, leading to a gold rush as international energy firms including Tata Power, Siemens Gamesa Renewable Energy, and Gulf Energy Development scramble to invest in rolling out the technology here in Vietnam.

According to a recent report from the World Bank, the expansion in solar generation capacity in Vietnam could generate as many as 25,000 new jobs every year to 2030, and another 20,000 jobs in the manufacturing of solar equipment for the global market.

The World Bank adds that the deployment of new solar generation will also be a critical factor for the Government of Vietnam to meet its Nationally Determined Contribution (NDC) climate change target and reduce its need for new coal generation.

Currently, coal-burning accounts for 65% to 75% of total carbon dioxide emissions from the energy system in Vietnam and imposes a large health cost on society. By 2030, it is estimated that the health cost of pollution will be between USD $7 and 9 billion (VNĐ 163 billion and 209.6 billion)[1] if coal burning is not reduced and replaced by renewable energy.

[1] Source: EREA & DEA: Vietnam Energy Outlook Report 2019 (2019), p.7

Source: CafeF