Key Takeaways
As one of the fastest-growing economies in Southeast Asia, Viet Nam is also among the fastest-growing energy consumers in the region. The Government of Viet Nam expects power consumption to grow by 8.8% annually through 2030.
Meeting this power demand is a pressing challenge, requiring an expansion in generation capacity to 150,489 MW by 2030—nearly 40% of which is expected to come from renewable energy. Most of a planned increase of up to 573,129 MW by 2050 will also be generated by renewables. The targets are contained in the Revised National Power Development Master Plan for the Period 2021–2030, with the Vision to 2050 (PDP 8), approved this year. The plan will guide Viet Nam's efforts to meet energy demand, enhance energy security, and transition towards a more sustainable and diversified energy mix.
The country has made significant progress in renewable energy adoption, particularly wind power, to support the government’s commitment in the Nationally Determined Contribution (NDC). Viet Nam’s goal for 2030 is to reduce emissions by 43.5% (compared to an earlier, do-nothing-scenario), and to achieve net-zero carbon emissions by 2050.
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Fossil fuels account for 75% of Asia's energy and the region accounts for more than half of global consumption.
In 2022, the wind energy capacity in Viet Nam was 5,059 MW. By 2030, the PDP 8 seeks to increase this capacity to 27,880 MW of combined onshore and offshore wind power, representing 18.5% of the total required capacity of 150,489 MW.
To support Viet Nam’s clean energy journey, ADB arranged and syndicated a $173 million green financing package for PC1 Group Joint Stock Company (PC1 Group), one of Viet Nam’s largest hydropower developers, and Japanese renewable energy developer and operator RENOVA, Inc., to finance the Lotus Wind Power Project. The project was the first and the largest internationally-financed wind power project in Viet Nam when it was approved by ADB in January 2021.
ADB partnered with the Japan International Cooperation Agency (JICA) and other international lenders to provide green loans to three of PC1’s subsidiary companies—Lien Lap, Phong Huy, and Phong Nguyen—to construct and operate three wind farms with an individual capacity of 48 MW and total capacity of 144 MW.
Located in the Huong Hoa district in the mountainous province of Quang Tri, the project has operated since November 2021 and is now helping diversify the country's energy mix. It supports Viet Nam’s efforts to meet climate action goals by generating an average of 422 gigawatt-hours of electricity annually, avoiding 162,430 tons of CO2 emissions.
Sometimes, projects with a national profile do not deliver tangible benefits to people living in the area of the wind farms. However, the Lotus Wind Power Project has not only brought electricity to nearby local communities but also a range of economic benefits.
Ho Van Tinh, deputy chief of the Huong Tan commune - one of three communes affected by the development of the three Lotus wind farms - says the project has been life-changing.
"The project has improved our roads, tourism, and commerce," said Mr. Tinh, whose commune has seven villages with 832 households. “It has changed our lives for the better.
"Our roads are much better now, making it easier for us to transport our products to the market and for our children to go to school. In the past, it would take almost an hour for parents to bring their children to school. Now it only takes 10-to-15 minutes.”
While roads were improved mainly to transport turbine and construction materials to the project site, they now help to move people, goods, and services in and out of the communes.
"The wind farms have attracted more visitors to our commune who want to see the wind turbines and enjoy the scenery. This has created more job opportunities for us with new business establishments, such as coffee shops, restaurants, convenience stores, and ecotourism sites," said Mr. Tinh.
Mr. Tinh claimed that the new jobs created have helped reduce poverty in the Huong Tan commune. The number of poor households, he said, dropped to 277 in 2022 from 310 in 2021.
When 20 households from Huong Tan commune gave up portions of their land for the construction of the wind towers and transmission lines, Mr. Tinh said the project compensated them fairly and transparently while maintaining or restoring their livelihood. Special attention was given to ethnic groups in the livelihood restoration and ethnic minority development plans prepared by the project team, which proposed programs that will positively contribute to the sustainable economic and social development of communities.
The livelihood support given to all affected households across the three communes included 50 chicks for each household; one cow for each affected village; drilling of water wells for three villages with each well serving a cluster of families; and 30 sets of textbooks, clothing, television sets, speakers, and other essentials for children attending preschool for one year. The project also supported various cultural activities, while local residents were given access to project amenities such as football fields.
Mr. Tinh said they are proud to be part of a project, “which not only helps our country develop renewable energy but also helps protect the environment through the reduction of greenhouse gas emissions, while empowering our community.”
Tran Huu Nam is a 50-year-old farmer, and a member of one of the 20 affected households. A 65-square-meter section of his two-hectare property in the Huong Tan commune is now used as a site for transmission towers. He was compensated with VND 200 million ($8,242) for his land and its agricultural assets which he uses to pay off debts and grow his family’s coffee farm and their small consumer electronics store.
“I am not only free from the burden of paying my bank debts, but I also get to enjoy the other benefits that this project brings. We now have access to electricity. Our social environment has changed positively after new business establishments have emerged and new roads have been built to help people travel more conveniently,” said Mr. Nam.
During construction, all three wind farms employed nearly 200 local people for 16 to 18 months, prioritizing those affected by the project. Monthly incomes ranged from VND 10 million to VND 12 million ($423 to $507). The wind farms have employed about 40 locals to work in operation and maintenance as permanent office staff, security guards, cleaners, and canteen staff with an average monthly income of $200.
Thirty-two-year-old Ho Thi My Nhung, from the Huong Hoa capital town of Khe Sanh, has been a permanent staff member at the Lotus Project Operations Management Office since July 2022. Although her family operates a snack eatery, she said it is her job at Lotus that gives them a stable income.
“This job gives me and my family a sense of stability in our finances. As a woman, it gives me a bigger voice in the family’s decision making,” said Ms. Nhung who raises a seven-year-old child with her self-employed husband and parents-in-law.
Trinh Van Tuan, Chairman of the Board of PC1 Group, said that the project is part of his company's long-term investment plan which prioritizes investments that align with environmental goals, economic benefits, and the expectations of stakeholders.
"We are determined to generate clean energy and bring a stable cash flow to the investors and PC1 Group, and also contribute to the roadmap of Viet Nam and other countries with investments in green projects," Mr. Tuan said.
Lotus is the type of project Viet Nam needs, said commune official Mr. Tinh, to speed up the country’s clean energy transition and provide economic benefits to local communities.
“We hope that more projects like this will come to our province in the future," he said.
