Firms in Vietnam adopt sustainable practices, grip onsite renewable energy

Companies in Vietnam are incorporating sustainable practices into their operations, advancing the adoption of renewable energy sources for their manufacturing facilities.

Sabeco, Vietnam’s largest brewer and a subsidiary of Thailand’s Thai Beverage, signed a partnership deal with Singapore-headquartered SP Group on Monday for SP to install 10.44 megawatt-peak (MWp) of rooftop solar panels across nine Sabeco breweries in Vietnam.

“This partnership demonstrates our commitment to facilitate the clean energy transition of our customers,” said Brandon Chia, SP Group’s managing director of sustainable energy solutions for Southeast Asia and Australia.

Sabeco CEO Bennett Neo said, “Over the past few years, we have already embarked on various initiatives covering ESG, or environment, society and governance, through our 4C corporate social responsibility pillars as well as our Best Brewery Awards initiative that are consistent with the corporation’s general objectives and support the National Green Growth objectives for the period 2021-2030, vision towards 2050.”

The 4C pillars are consumption, conservation, culture, and country.

In the Sabeco-SP Group partnership, SP will install rooftop solar panels at Sabeco’s nine breweries in Ho Chi Minh City (two facilities), Can Tho city, Hanoi, and the provinces of Lam Dong, Vinh Long, Bac Lieu, Ha Tinh, and Quang Ngai.

The project is slated to be completed and operational by the third quarter of this year and will provide almost 25% of electricity consumed at the nine factories. It is expected to deliver over 14,600 MWh of electricity per year.

HCMC-headquartered Sabeco said it and SP will study the feasibility of incorporating other sustainable energy solutions such as energy storage systems (ESS) at selected breweries. The incorporation of ESS will allow Sabeco to manage the issue of supply intermittency, as solar power can fluctuate due to weather conditions. The ESS will also maximize the solar energy produced and used at the various breweries.

Just prior to the Sabeco-SP Group partnership, TotalEnergies ENEOS signed a long-term deal with Golden Victory Vietnam Co., a key supplier for globally renowned sportswear brands, to develop a 4.6 MWp rooftop solar system at the latter's facility in the northern province of Nam Dinh.

The new deal will take the two sides’ total solarization system size to 7.5 MWp, TotalEnergies ENEOS said on Monday. Golden Victory Vietnam is one of the biggest shoe and footwear manufacturers in the country.

The new agreement will reduce Golden Victory’s carbon footprint by about 4,200 tons of carbon emissions annually, equivalent to planting over 62,000 trees, said TotalEnergies ENEOS, a joint venture between global multi-energy company TotalEnergies and Japanese petroleum company ENEOS.

At present, Danish giant toymaker Lego is investing more than $1 billion in building its first carbon-neutral production site worldwide in southern Vietnam’s Binh Duong province. The state-of-the-art and smart facility will cover 44 hectares in Vietnam-Singapore Industrial Park III of VSIP Group. Lego expects to start production next year.

The green factory will feature solar panels on its roof and VSIP Group is building a nearby solar farm on behalf of Lego. Combined, the two solar systems will match 100% of the factory’s annual energy requirements. The factory is designed to accommodate electric vehicles and be outfitted with energy-efficient production.

Preben Elnef, general manager of Lego Manufacturing Vietnam Co. Ltd., told The Investor this February that the country’s target of net-zero emissions by 2050 and government support have made Vietnam its newest investment destination. He said Lego has planted 15,000 trees across multiple locations near the factory, and is planting a further 35,000 trees in 2023 and 2024.

“As a business, we aim to ensure our new factory has a minimal impact on the environment,” said Elnef.

Also in Binh Duong province, global packaging giant Tetra Pak has installed 5,900 square meters of rooftop solar panels on its factory to reduce carbon emissions by 700 tons and generate 1,900 MWh of electricity a year.

The system was completed late this March after six months of construction and is part of Tetra Pak’s commitments to reducing greenhouse gases towards net-zero emissions by 2030, said Eliseo Barcas, managing director and president at Tetra Pak Vietnam.

China-based Jinko Solar, one of the largest and most innovative solar module manufacturers in the world, said the same month it expected to install rooftop solar systems for factories in Song Khoai Industrial Park in northern Vietnam’s Quang Ninh province. A Jinko Solar executive made the proposal to Quang Ninh’s administration at a meeting on March 7 regarding the giant’s contributions to energy saving and power generation.

On March 2, two agribusinesses – De Heus Vietnam and Bel Ga JSC – signed deals with Vietnamese firm Green Roof to install rooftop solar systems at their establishments in the next two years. Green Roof will make systems of up to 20 MWp at 30 facilities of the two agribusinesses in 19 cities and provinces across Vietnam.

Vietnam’s latest power development plan, known as PDP VIII, has been approved by Prime Minister Pham Minh Chinh, the Ministry of Industry and Trade said late on Monday. Under the plan, half of office buildings and homes in the country will be powered by rooftop solar panels by 2030, but this source will not be connected to the national grid.

However, an absence of rules and regulations enabling the signing of power purchase agreements (PPAs) to sell rooftop solar power to the grid via state utility Vietnam Electricity, or EVN, is a problem.

At the Vietnam Business Forum (VBF) conference this March, the American Chamber of Commerce (AmCham) noted that crucial to attracting domestic and international investment are bankable PPAs for sustainable power.

“Green financing offers favorable rates to private investors to reduce carbon emissions but the legal framework should be updated to clarify criteria for approving green finance. We continue to see privately financed growth in off-grid power projects, especially rooftop solar systems in the form of onsite corporate PPAs.

“These projects demonstrate that producers and users are able to develop sustainable long-term agreements, supporting the argument in favor of EVN workout pricing for using the national grid. In the meantime, timely approval of the onsite corporate PPAs in the first quarter of 2023 – an important mechanism for attracting private investment – would be much welcomed by the industry,” AmCham said.

Rooftop solar PPAs with EVN are impossible but a similar deal between the owner of the roof and a firm installing a solar system on the roof is possible. For example, Huong Sen Comfor Company and SkyX Solar of investment fund VinaCapital signed a PPA last November. Under the deal, SkyX Solar is due to sell to Huong Sen electricity generated from its rooftop solar system installed by SkyX Solar.

Both sides did not disclose the electricity price fixed in the PPA. SkyX Solar said the system cost some at VND40 billion, or $1.6 million, and the Huong Sen yarn factory used is located in the industrial cluster of Dong Hai in Thai Binh province, northern Vietnam. The total area for rooftop solar installment is 20,000 square meters.

SkyX Solar is backed by EDR Renewables. The French power giant, one of the world’s largest renewable energy developers, said in October 2021 that it had made a significant investment in SkyX Solar.

The French major did not reveal the number, but said the new EDR-VinaCapital partnership had investment plans of more than $100 million implemented in three years in Vietnam to back SkyX Solar in developing an additional 200 MWp of rooftop solar and energy distribution projects for commercial and industrial customers.