Vietnam advances with strategies for battery storage market development
Vietnam is taking strides in advancing its energy sector, particularly in the area of battery energy storage systems (BESS). On September 12, a regional roundtable on financing models for BESS was held in Hanoi, co-organised by the Global Energy Alliance for People and Planet (GEAPP) and the Vietnam BESS Task Force.
The event gathered financiers, technical experts, research institutions, and development partners to discuss solutions for scaling up the BESS sector. The discussions highlighted the importance of defined charging rules for BESS to give investors certainty on operations.
Regional case studies, such as those from India and China, showed how financing mechanisms can transform the economics of storage. Costs dropped significantly through the use of concessional capital, viability gap funding, regulatory clarity, and clear procurement guidelines.
In April, Decision 988/QD-BCT introduced a generation price framework for solar projects with storage, requiring at least a two-hour discharge time and a storage ratio of 10 per cent of plant capacity. This move demonstrates Vietnam's commitment to the development of BESS.
However, Vietnam's storage market remains in its early stages, with most projects being pilots, limited by high upfront costs, unclear tariffs, and the absence of recognised revenue streams. To overcome these barriers, the Vietnam BESS Task Force and GEAPP discussed financing sources including philanthropic partnerships combined with concessional financing and a mix of public and private capital.
Local pilots in industrial parks and commercial facilities in Vietnam have demonstrated how BESS can improve load shifting, optimise solar generation, and reduce reliance on the grid. Battery energy storage systems are gaining interest from enterprises seeking power stability and reduced curtailment.
Innovative business models, such as public-private partnerships or energy service agreements, could spread risks and improve bankability in Vietnam's energy sector. Stronger time-of-use tariffs are needed to provide incentives for arbitrage. Concessional funding and tax incentives are crucial to overcome high upfront costs.
Participants emphasised that Vietnam has the chance to create investor-friendly rules, tariff mechanisms, and financing pathways from the outset, potentially leapfrogging into a leadership position in Southeast Asia's storage market.
The Law on Electricity 2025 in Vietnam formally recognises BESS as part of the national power infrastructure. Draft circulars on tariffs and service pricing for BESS are currently in preparation in Vietnam. The Electricity Authority of Vietnam, VEPG, and GEAPP have officially launched the BESS Task Force, which is central to advancing reforms in Vietnam's energy sector.
The roundtable took place as Vietnam accelerates its power sector transformation under the revised Power Development Plan VIII (PDP8), which targets between 10,000 and 16,300 MW of storage by 2030 and close to 96,000 MW by 2050. Industrial users are expected to play a larger role in Vietnam's energy sector, particularly in industrial parks.
Notably, Pacifico Energy Vietnam has secured $28.5 million in financing for its wind farm venture. The Vietnam Institute of Economics and World held a forum to discuss energy development and economic growth.
In conclusion, the roundtable marked a significant step forward in the development of Vietnam's BESS sector. With the right financing mechanisms and policies in place, Vietnam is well-positioned to lead in the region's storage market.
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