Vietnam energy storage foreign trade

Sunita Dubey and Hyunjung Lee share how Vietnam is leveraging Battery Energy Storage Systems to stabilize their grid and accelerate the energy transition.

Vietnam can leverage domestic solar manufacturing to meet domestic demand, implement direct power purchase agreements (DPPAs) enabling private renewable supplies, accelerate grid and battery storage infrastructure, and avoid costly LNG imports by prioritizing renewables.

As global costs for solar, wind, and battery storage systems fall, Vietnam could replace fixed feed-in tariffs (FiTs) with standardized competitive auctions to procure clean energy at the lowest cost.

Vietnams total power demand is expected to grow 10% annually during the period 2021-2024, and power shortages are expected to increase in different regions of the country.

Nearly 58% of that investment was from purely domestic sources and 27% through domestic-foreign joint ventures. By 2023, Vietnam had become Southeast Asia's largest solar power producer, proving that the energy transition could occur rapidly. However, the very success of this boom has sowed the seeds of a policy reckoning.

Such financial hurdles have challenged the government's ability to use fossil fuels to expand electricity supply in step with Vietnam's fast-growing economy. Contrastingly, solar and wind power's lower capital requirements and faster development timelines are well-suited to meeting Vietnam's near-term energy needs.