Renewable energy is seen as a solution and an inevitable trend in the current energy industry worldwide.

Renewable energy is considered a solution and an inevitable trend of the energy industry worldwide. As fossil fuels such as coal and oil become increasingly depleted and cause severe environmental pollution, countries around the world are forced to accelerate the shift towards clean and sustainable energy structure. The development of renewable energy sources is gradually becoming an important factor in the sustainable economic development of countries, due to the great benefits in maximizing endless natural resources (such as wind, solar...) and contributing to reducing the impact of greenhouse gases and climate change.

According to research by the International Energy Agency (IEA), by 2025, renewable energy will become the main source of electricity production, providing one-third of the world's electricity, with wind and solar power capacity estimated to exceed that of natural gas in 2023 and coal in 2024.

In the EU market

The EU is one of the leading regions in promoting the restructuring of the energy industry towards building infrastructure for the development of clean energy sources. The renewable energy industry in the EU has been rapidly growing in recent years, with a growth rate of 11% in the first 6 months of 2020 compared to the same period in 2019, contributing to generating 40% of total electricity production for the 27 countries in the region. With a strong determination to shift towards the energy sector, the EU aims to increase the share of renewable energy and bioenergy to 60% by 2030, and to increase offshore wind power capacity 25-fold by 2050 to achieve the goal of carbon neutrality by 2050. To accelerate the implementation of the "Clean Energy for All Europeans" plan, at the end of 2018, EU member states passed the European Commission's proposal for a €873 million investment package for Europe's large clean energy infrastructure projects, including 17 projects. Of this, €680 million was invested in 8 projects in the electricity sector and €193 million in 9 other projects related to gas. These renewable energy-related projects will enhance cooperation and strengthen the security of the energy network throughout Europe. Accordingly, EU members will quickly transition to a low-carbon emission economy, providing health and competitiveness benefits to many industries. The energy union will be one of the top priorities of the European Commission in transforming Europe into a clean, modern, and sustainable economy.

In the US market
There is a deep understanding of the importance of sustainable development being closely linked to ensuring a supply of renewable energy to reduce the harmful environmental effects of energy production from fossil fuels. The US government has invested heavily in developing the infrastructure for renewable energy production facilities and replacing energy systems that use non-renewable sources.

From 2011 to 2014, California built the two largest solar power plants in the world. The Topaz Solar Farm (with a capacity of 550 MW) was invested in for around 2.5 billion USD and became operational in 2014. The second solar power plant, Ivanpah (with a capacity of 392 MW) had a total investment of approximately 2.2 billion USD and was built on an area of about 13 km2 in the Mojave Desert, California, and began operations in 2014. In 2019, the US achieved strong growth in renewable energy production, increasing by 19% compared to previous years, producing 720.4 TWh of renewable energy from sources such as solar or geothermal power.

Babcock Ranch, located in Florida, became one of the most sustainable and environmentally friendly cities in the world at the end of 2018. It uses 100% renewable energy and applies smart grid technology. According to the "Renewable Energy Prospects" report by the US Department of Energy's National Renewable Energy Laboratory (NREL), the US is one of the world's largest producers of renewable energy and a pioneer in this field. By 2050, the majority of the US's electricity could come from renewable energy sources. Most coal and nuclear power plants will be retired by 2030, but the remaining plants will continue to operate until 2050. The report suggests that the US can produce 80% of its electricity from renewable energy using current technologies, including wind turbines, solar photovoltaics, wind power, bioenergy, geothermal, and hydropower.

The strong development of the renewable energy industry replacing the use of fossil fuels is occurring in the country with the world's leading economy, highlighting the importance of economic development being closely linked to the development of sustainable and safe energy.

In the Chinese market
From a country that relied heavily on fossil fuels (coal, oil, natural gas), China sees the development of renewable energy as a key task in leading the world's economy. This is emphasized in the modernization plan "Made in China 2025", with the goal of making China a leading country in the field of renewable energy. According to the United Nations Environment Programme on Renewable Energy, China invested $3 billion in this sector in 2004, but by 2015, it had increased to $103 billion, surpassing the United States at $44.1 billion and accounting for about 36% of global investment. In the 5-year plan from 2016-2020, China's total investment in this industry exceeded $360 billion, with about 3.5 million people working in the renewable energy sector, the largest workforce compared to other countries worldwide. According to the National Energy Administration of China (NEA), the total electricity output from solar and wind power plants is expected to reach 11% of the country's total electricity consumption in 2021, higher than in 2020 (9.7%), with the target of reaching 16.5% by 2025. The Chinese government has announced that it will increase the proportion of renewable energy in primary energy consumption to about 25% by 2030. This is seen as the main target of China's commitment to reducing carbon emissions by 2030 and is part of the national comprehensive energy reform program aimed at gradually reducing the use of fossil fuels that cause environmental pollution. In recent years, the renewable energy sector has been a focus of the government and is the main target of expanding the country's influence worldwide, resulting in a rapid transition and development in this industry. Since 2018, solar power capacity has increased by 700 times, wind power capacity has increased 22 times, and exports of this industry to other countries have increased day by day (mostly solar energy batteries). This is the driving force behind the global increase in solar and wind power capacity by 33 times since 2018. With its position as the leading country in renewable energy production, China has raised its influence to a new level, affecting not only industries heavily dependent on energy but also trade and the economy as a whole.

In the Vietnamese market
According to the assessment of Vietnamese experts, Vietnam is a country that possesses geographic and climatic characteristics ideal for the production of renewable energy. With its long coastline and tropical weather, the region receives a relatively large amount of solar heat, making it one of the great potentials for Vietnam to build and develop its renewable energy industry, such as solar power plants and wind power plants. This is of great significance in guiding the development of Vietnam's economy in the future, as well as energy security. The development of renewable energy is also a global energy race, creating a competitive position in the region and the world. This shows that Vietnam cannot fall behind in this field, but should efficiently exploit the potential for the development of renewable energy to create a competitive advantage for the entire economy.

Recognizing the top priority of the renewable energy industry, the government has issued many mechanisms and policies to encourage the development of renewable energy sources. The Ministry of Industry and Trade also approved the "Program for the Development of Rooftop Solar Power in Vietnam for the 2019-2025 period" under Decision No. 2023/QD-BCT on July 5, 2019, as well as many guiding circulars and implementation plans. Along with that, developing renewable energy sources parallel with improving the efficiency of using electricity for household and production purposes is necessary to reduce costs and negative impacts on the environment and people's health.

In the first six months of 2021, the total electricity production and importation of the entire system reached 128.51 billion kWh, an increase of 7.4% compared to the same period in 2020. Renewable energy sources (including wind power, solar power, and biomass power) generated 14.69 billion kWh, accounting for 11.4% of the total output.

Electricity industry structure
The proportion of mobilized output of some main types of power sources in the total electricity production output of the whole system is as follows:

• Hydropower with a mobilized output of 30.46 billion kWh, accounting for 23.7%.
• Coal-fired thermal power with a mobilized output of 66.67 billion kWh, accounting for 51.9%.
• Gas-fired thermal power with a mobilized output of 15.66 billion kWh, accounting for 12.2%.
• Renewable energy (wind power, solar power, biomass power) with a mobilized output of 14.69 billion kWh, accounting for 11.4%.
• Imported electricity with a mobilized output of 624 million kWh, accounting for 0.5%.
• Oil-fired thermal power with a negligible mobilized output of 02 million kWh.

Potential for renewable energy development in Vietnam According to a report by the World Bank (WB), Vietnam is one of 14 countries in the world with top potential for hydropower. With over 120,000 hydropower stations, Vietnam's estimated total capacity is about 300MW. With a long coastline along the country, Vietnam has great potential for wind energy exploitation, with an estimated total potential of 513,360 MW. Wind power is currently being developed in coastal areas mainly in the Central, Southern, and Central Highlands regions, such as Ninh Thuan, Binh Thuan, Soc Trang, Tra Vinh, Bac Lieu, and islands. Located in the tropical region, Vietnam has great potential to utilize solar energy, with over 2,500 hours of sunshine per year and an average radiation amount of about 230-250 kcal/cm2/day, increasing towards the south. This is an advantage for Vietnam to exploit this renewable energy source to serve the production and daily needs of the people. Currently, more and more households are benefiting from using solar panels to save costs for their daily needs. With the explosive development of the renewable energy industry in developed countries around the world, there are more and more investors with large capital who hold technology, operation processes, and technical know-how in renewable energy plants. This is also a potential for Vietnam to attract these giants in the industry to invest in developing renewable energy exports while it is still in its infancy in the country.

Orientation

Recognizing the importance of renewable energy, our Party and State have shown a continuous interest in the development of renewable energy since the Resolution of the 9th National Party Congress in 2001. The Prime Minister issued Decision No. 2068/QD-TTg on November 25th, 2015, approving Vietnam's Renewable Energy Development Strategy until 2030, with a vision to 2050, and Decision No. 428/QD-TTg on March 18th, 2016, approving the adjustment of the National Power Development Plan for the 2011-2020 period, with consideration given to 2030, as well as mechanisms and policies to promote renewable energy.

Specific mechanisms to promote renewable energy include regulations on purchasing responsibility and priority for mobilizing capacity from renewable energy sources: The electricity buyer is responsible for purchasing all electricity generated from renewable energy sources. Power plants that generate electricity from renewable energy sources are given priority to exploit the entire capacity and electricity production suitable for the fuel supply regime of the plant's region. This regulation aims to protect the rights of investors, ensuring they will be able to generate maximum capacity and sell all electricity produced from renewable energy sources.

Support mechanisms for electricity prices: Electricity generated from small hydroelectricity, wind energy, biomass energy, and solid waste is purchased at a higher price than electricity purchased from traditional energy sources (large hydroelectricity, fossil fuel). Other mechanisms and policies to promote renewable energy: In addition to the above incentives, renewable energy projects are also eligible for price subsidies for project products under the Clean Development Mechanism (CDM), preferential treatment for loan amounts, loan terms, corporate income tax, import-export tax, land use tax, water surface rent, environmental protection tax exemption... under tax incentives regulations.

In the context of climate change mitigation and the development of a "green economy" being top priorities for many countries around the world, renewable energy is increasingly being focused on. Vietnam needs to develop even faster, both to create competitiveness in the "green economy" era and to be a key point in achieving the country's goal of "sustainable development" and improving the environment, climate and protecting the long-term health of its people.

Pham Kim Oanh

Journal of Industrial and Trade Research - VIOIT