Germany and the Netherlands lead the renewable energy wave in Vietnam

Vietnam’s growing demand for renewable energy

Vietnam is standing at a turning point in its energy journey. With its long, sun-drenched coastline and steady winds, the country holds incredible potential for renewable energy. But as industries grow and cities expand, so does the demand for electricity. The question now is not just about meeting that demand but about doing so in a way that secures a cleaner, more sustainable future for generations to come.

Across the world, countries are racing to embrace renewable energy. The UK, for example, has set bold targets to phase out coal and rely more on sustainable sources. Vietnam is also stepping up with its Power Development Plan VIII (PDP8), which lays out ambitious goals:

• Increase renewable energy (wind, solar, and biomass) to 31-33% by 2030.
• Increase offshore wind capacity to 6 GW by 2030, rising to 70 GW by 2050.

These aren’t just numbers on paper - they represent a vision for a cleaner, greener Vietnam. But reaching these goals will require more than just policy; it will take innovation, expertise, and strong investment in new technologies. Vietnam has the resources, the potential, and the opportunity to lead in renewable energy. 

Key factors driving renewable energy investment

1. Favorable government policies and incentives

The Vietnamese government is very active in attracting foreign investment in the renewable energy sector, recognizing the importance of the clean energy transition. To achieve this goal, Vietnam has been implementing many incentive policies and mechanisms.

Previously, the feed-in tariff (FiTs) mechanism played an important role in attracting investors to solar and wind power. However, Vietnam is now shifting to new mechanisms, including competitive auctions and direct power purchase agreements (DPPAs), to create a more transparent and efficient renewable energy market.

To increase the attractiveness to investors, the Vietnamese government also applies many tax incentives. Investors can enjoy preferential corporate income tax rates and import tax exemptions for equipment and technology related to renewable energy.

In addition, the public-private partnership (PPP) model is also encouraged, especially in energy infrastructure development projects. This enables foreign investors to participate in large projects while sharing risks and profits with the government.

2. Natural potential for renewable energy

Vietnam’s geographical advantages provide an excellent foundation for renewable energy projects.

• Solar power: Southern Vietnam's typical solar radiation rate is 4.5-5.5 kWh/m² per day, making it ideal for large-scale solar farms.
• Wind power: Coastal regions, particularly those in the central and southern provinces, have average wind speeds of 6-7 m/s, making them ideal for both onshore and offshore wind farms.
• Hydropower: Accounting for a significant portion of Vietnam’s electricity, hydropower remains a strong contributor to the renewable mix.

Growing energy market and demand from industrial zones

Vietnam is a manufacturing hub, attracting multinational corporations in electronics, textiles, and automotive industries. With a rising need for sustainable energy sources, many businesses seek direct renewable energy solutions to meet carbon neutrality commitments.

Opportunities for German and dutch companies in Vietnam’s renewable energy sector

Advanced technology and expertise

Germany is a global leader in wind and solar technology, with firms specializing in turbine manufacturing, grid integration, and energy storage. Companies such as Siemens Energy, Enercon, and RWE have the expertise to support Vietnam’s offshore wind ambitions.

The Netherlands has strong capabilities in offshore wind farm development, with firms like Shell, Van Oord, and TenneT contributing to international projects. Dutch expertise in coastal engineering and floating solar technology is highly relevant to Vietnam.

Investment and joint ventures

Direct investment is an important way for foreign companies to participate in Vietnam's renewable energy market. They can establish subsidiaries specializing in renewable energy or become independent power producers (IPPs), directly building and operating projects. This allows them to control the entire process and optimize profits.

In addition, cooperation with local businesses also brings many benefits. Foreign companies can jointly develop projects with Vietnamese energy companies, taking advantage of local knowledge and existing networks. This cooperation helps reduce risks and increase project implementation efficiency.

Moreover, technology transfer plays a key role in modernizing the grid and improving energy efficiency. Technology transfer agreements allow foreign companies to provide advanced solutions, helping Vietnam build a more sustainable and efficient energy system.

Sustainability and ESG alignment

European businesses prioritize environmental, social, and governance (ESG) standards, aligning well with Vietnam’s sustainable development goals. Investments from Germany and the Netherlands can bring high environmental standards and corporate social responsibility (CSR) benefits.

Challenges and how to overcome them

Vietnam is emerging as a potential market for renewable energy, attracting the attention of many international investors. However, besides the attractive opportunities, investors also need to pay attention to some challenges.

Vietnam's current power grid needs to be upgraded to meet the increasing demand for renewable energy. The solution to this problem is to invest in smart grids and energy storage systems.

Project licensing and approval procedures can be complicated and time-consuming. Cooperating with experienced local partners will help investors minimize risks and speed up project progress.

Although the government has many preferential policies, the initial investment costs for renewable energy projects are still quite high. Investors need to have a detailed financial plan and find suitable sources of capital.

Role of Invest Talent in facilitating FDI

Invest Talent possesses an in-depth understanding of Vietnam’s renewable energy sector, enabling it to identify and recruit top-tier talent that aligns with the specific needs of FDI companies. With a vast network of skilled professionals across Vietnam and internationally, I-Talent ensures access to high-quality candidates for critical roles in renewable energy projects.

Senior engineers and specialists in renewable energy were successfully hired by top FDI firms in Vietnam. Supported German and Dutch corporations in building teams for large-scale solar and wind energy projects. Beyond recruitment, Invest Talent offers comprehensive HR consulting services, including talent management and workforce planning, tailored to the unique challenges of the renewable energy sector.

Tailored Services for the Renewable Energy Sector

Understanding the specific demands of the renewable energy sector, Invest Talent offers:

• Aligning with the technical and regulatory requirements of renewable energy projects.
• Ensuring adherence to Vietnam's evolving energy policies and standards.
• Facilitating seamless integration of foreign managerial practices with local teams.

Vietnam’s renewable energy sector is a beacon of opportunity for FDI investors, particularly from Germany and the Netherlands. With its abundant natural resources, supportive government policies, and growing energy demand, Vietnam is poised to become a global renewable energy hub. Invest Talent, with its deep market insights, extensive talent network, and proven track record, is the ideal partner for FDI companies looking to succeed in this dynamic sector.

Contact Invest Talent today to explore how their tailored solutions can drive your success in Vietnam's renewable energy market.