Is distributed energy storage in Vietnam reliable

However, in Vietnam, there is a widely held industry perception that Battery Energy Storage Systems (BESS) are not economically feasible at this moment, while the country's first pumped storage hydropower (PSH) project Bac Ai with a capacity of 1,200 MW will not be commissioned until 20289.

Vietnam's electricity sector has experienced substantial growth, becoming the second largest in Southeast Asia in terms of installed capacity, behind Indonesia.1The country has witnessed a significant increase in electricity consumption, with an average annual growth rate of 12% between 2000 and 2020.

Vietnam has initiated steps to promote renewables through the implementation of feed-in tariffs for utility-scale solar, rooftop solar, and onshore wind since 2017. These measures have exceeded expectations, leading to the deployment of 16.5 GW of solar capacity in just two years (2019- 2020).

Coal capacity is expected to peak at 30GW in 2030 and gradually phase out towards 20503and renewables will take on an increasingly important role. Vietnam has initiated steps to promote renewables through the implementation of feed-in tariffs for utility-scale solar, rooftop solar, and onshore wind since 2017.

However, fulfilling Vietnam's net-zero by 2050 pledge while meeting the growing energy demand poses a massive challenge. The eighth Power Development Plan for the period of 2021-2030, with a vision to 2050 (PDP8), estimates that by 2050, installed power generation capacity will need to increase by 8.0-9.3 times from the 2020 level.

According to PDP8, the total investment required for the development of grid from 2021 to 2030 amounts to $14.9 billion, equivalent to $1.5 billion per year or 0.4% of Vietnam's GDP in 2020 (Table 1). The strained state budget alone may struggle to accommodate such substantial financial requirements.