WEBVTT - In 2020 Vietnam Put Solar Panels on Everything 0:00:00.400 --> 0:00:04.120 I'm Dana Perkins, and this is Switched on the BENF Podcast. 0:00:04.320 --> 0:00:07.400 For those of you who haven't yet read the book Factfulness, 0:00:07.440 --> 0:00:09.800 one of the things this book does is get you 0:00:09.840 --> 0:00:12.960 to question your assumptions about the world and ensure that 0:00:13.039 --> 0:00:16.919 they are not frozen in time. Perhaps your perception is 0:00:16.960 --> 0:00:20.279 from data that is dated. And one thing we know 0:00:20.400 --> 0:00:24.239 for certain is that change doesn't always happen at a consistent, 0:00:24.520 --> 0:00:29.200 gradual pace. Sometimes it's fast. Sometimes the data makes you 0:00:29.280 --> 0:00:32.080 do a double take, and that is just what happened 0:00:32.200 --> 0:00:36.480 this past year in Vietnam. Today I'm speaking with Jenny Chase, 0:00:36.600 --> 0:00:39.120 head of our solar team, and Caroline Chua, who is 0:00:39.120 --> 0:00:42.280 an analyst focused on Southeast Asia, and we're going to 0:00:42.320 --> 0:00:45.280 discuss a solar boom that happened over a period of 0:00:45.320 --> 0:00:48.440 just a couple of months in Vietnam and what this 0:00:48.520 --> 0:00:51.680 could mean for other countries looking to grow their rooftop 0:00:51.720 --> 0:00:54.840 solar industry. Following today's podcast, if you want to dig 0:00:54.840 --> 0:00:57.760 a bit deeper, BENF subscribers can take a look at 0:00:57.800 --> 0:01:01.480 the Southeast Asia Market out Look or at another note 0:01:01.520 --> 0:01:06.080 titled Vietnam gets Ambitious on Clean Energy. They're both available 0:01:06.160 --> 0:01:08.760 at b NF dot Com on our mobile app or 0:01:08.920 --> 0:01:11.479 via b NF go on the terminal. B NF does 0:01:11.560 --> 0:01:14.080 not provide investment or strategy advice, and you can hear 0:01:14.120 --> 0:01:16.880 our full disclaimer at the end of the podcast. But 0:01:17.040 --> 0:01:28.080 now let's get started talking about Vietnam. Caroline and Jenny, 0:01:28.200 --> 0:01:30.840 thank you for joining us today. So now, Caroline, where 0:01:30.840 --> 0:01:33.959 are you located because I'm located into the Singapore office 0:01:34.200 --> 0:01:36.440 And Jenny, where are you located? I am in the 0:01:36.440 --> 0:01:41.319 countryside in Switzerland and I am i am in London. 0:01:41.400 --> 0:01:43.560 Now we're here to talk about solar. You guys are 0:01:43.920 --> 0:01:47.360 solar experts. Is any of your electricity powered by solar? 0:01:47.360 --> 0:01:49.960 Do you think right now? No? Because although I have 0:01:50.000 --> 0:01:52.880 a massive solar power system is covered with fifteen centways, 0:01:52.920 --> 0:01:54.680 it's a snow right now. This is a good question 0:01:54.720 --> 0:01:56.800 to ask in the middle of winter. It's more of 0:01:56.800 --> 0:01:58.760 a summer question. Yeah, how about you, Caroline, do you 0:01:58.760 --> 0:02:00.840 think a name of yours is powered by solar only? 0:02:00.960 --> 0:02:04.040 Probably a very small portion from the national grid. You 0:02:04.120 --> 0:02:08.600 don't have much space in Singapore to install the little panels. Unfortunately, 0:02:09.160 --> 0:02:11.040 it makes a lot of sense. I'm here in London. 0:02:11.080 --> 0:02:13.200 I don't have it my own residential solar. And I'm 0:02:13.240 --> 0:02:17.080 pretty pretty convinced that the renewable's electricity I'm getting is 0:02:17.080 --> 0:02:20.200 probably win today. But well, we'll leave it at that, Okay, 0:02:20.360 --> 0:02:24.600 So let's talk about where a lot of people probably 0:02:24.680 --> 0:02:29.239 do have their electricity powered by solar in their homes, 0:02:29.440 --> 0:02:33.280 and that is Vietnam. To start, what has happened in 0:02:33.320 --> 0:02:36.440 the solar industry in Vietnam in twenty nineteen, because this 0:02:36.560 --> 0:02:41.639 is quite a big deal. Twenty Sorry, okay, it also happened. 0:02:42.960 --> 0:02:46.079 So it also happened in Okay, so give yeah, give 0:02:46.120 --> 0:02:48.120 me both years. Actually that's more relevance since we're now 0:02:48.160 --> 0:02:51.440 in one. What happened in the solar industry in twenty nineteen, 0:02:51.639 --> 0:02:56.200 and so we first witnessed the first solar boom in 0:02:56.320 --> 0:02:59.440 Vietnam in twenty nineteen and the fust off of nineteen 0:02:59.760 --> 0:03:03.519 with we saw about five gig awards a solar built 0:03:03.880 --> 0:03:06.799 in just a few months to meet June that year, 0:03:06.880 --> 0:03:09.160 fit and tire of deadline at the time, just a 0:03:09.160 --> 0:03:11.760 few months, like one month, two months. When I spoke 0:03:11.800 --> 0:03:14.280 to developers on the ground, we understood that most of 0:03:14.320 --> 0:03:18.760 the construction actually took place just over two months. And 0:03:19.040 --> 0:03:23.160 again they've managed to surprise US in twenty twenty. The 0:03:23.280 --> 0:03:26.160 latest boom that we saw actually happened in the rooftop 0:03:26.240 --> 0:03:29.800 solar space. They have reportedly built almost nine gig awards 0:03:29.919 --> 0:03:34.000 fotop solar in twenty twenty alone, out of which more 0:03:34.040 --> 0:03:37.520 than six gil to build in December. About four point 0:03:37.560 --> 0:03:40.600 seven gig awards came online in the last week of 0:03:40.680 --> 0:03:43.839 the year alone. Just to give some sense of how 0:03:43.920 --> 0:03:46.400 quick the ramp up was, the official numbers that we 0:03:46.480 --> 0:03:48.680 got from the state utility was dead. At the end 0:03:48.720 --> 0:03:51.200 of November, there was just two point nine gig awards 0:03:51.240 --> 0:03:54.680 connected to the grid, and on Christmas date itself only 0:03:54.760 --> 0:03:57.800 four point seven gig awards. So that's a very very 0:03:57.840 --> 0:03:59.880 significant ramp up in the last week of the year 0:03:59.880 --> 0:04:02.680 that before. And this is just absolutely staggering. I mean 0:04:02.720 --> 0:04:05.040 I found out about this last week when Caroline got 0:04:05.080 --> 0:04:07.160 in touch with me and said, we need to increase 0:04:07.200 --> 0:04:10.440 our forecast or our estimate for solder in Vietnam from 0:04:10.520 --> 0:04:14.080 three or four gig of what's in twenty two eleven 0:04:14.200 --> 0:04:18.040 to thirteen giving what's in twenty twenty, which actually makes 0:04:18.080 --> 0:04:21.400 it the third possibly even the second. If the US 0:04:21.520 --> 0:04:23.520 was on the very very low end of the forecast 0:04:23.680 --> 0:04:25.800 and the Vietnam was in the very high end largest 0:04:25.800 --> 0:04:28.640 market in the world. Well, that's incredible. So what caused 0:04:28.640 --> 0:04:31.599 this to happen in such a short period of time. Well, so, 0:04:31.720 --> 0:04:35.440 first has been mostly incentive driven commission rush that we saw, 0:04:36.040 --> 0:04:39.280 so Specifi twenty twenty roofs up sold broom that we saw. 0:04:39.520 --> 0:04:42.479 There was a second solofin INTERI scheme that was expiring 0:04:43.279 --> 0:04:46.520 on play first, December twent tween d and in order 0:04:46.600 --> 0:04:49.800 to be eligible for this in interifttops have to be 0:04:49.880 --> 0:04:52.400 connected to the grip by then. That really a bit 0:04:52.520 --> 0:04:55.080 pressure to develop is to speed up the build of 0:04:55.160 --> 0:04:59.400 their projects, especially when there's very little certainty about what's 0:04:59.440 --> 0:05:03.880 to come x. Also on December twenty fifth itself, the 0:05:03.960 --> 0:05:07.520 State Utility actually made quite an interesting announcement edit some 0:05:07.680 --> 0:05:09.680 pushed in the last week where they came up to 0:05:09.760 --> 0:05:13.159 say that they would actually stop signing any more power 0:05:13.200 --> 0:05:18.080 purchase agreements or record any electricity that's generated integrate from 0:05:18.279 --> 0:05:22.799 new rooftop solar systems for any future potential back paying 0:05:22.960 --> 0:05:26.320 off of finit terris when the new steamers announced. So 0:05:26.480 --> 0:05:29.920 that's something new in Vietnam historically in the past when 0:05:29.960 --> 0:05:33.120 the Finnit terror scheme expired. What the State Utility did 0:05:33.480 --> 0:05:36.720 was they actually recorded how much was being generated integrate 0:05:37.320 --> 0:05:40.840 and when the scheme was finally finalized, they back pay 0:05:41.000 --> 0:05:44.400 all the owners for the generation of the last few months. 0:05:45.040 --> 0:05:46.440 The fact that they have came up to say that 0:05:46.600 --> 0:05:48.680 they will not do so probably caused a bit of 0:05:48.760 --> 0:05:51.520 panic among the developers and owners. So this is something 0:05:51.600 --> 0:05:55.280 that the State Utility pretty much made happen through the incentives. 0:05:55.560 --> 0:05:59.320 Was this the desired result? So? I think the incentives 0:05:59.400 --> 0:06:03.600 itselves issued by the government and the Ministry of Industry 0:06:03.640 --> 0:06:06.680 and Trade. It's just that the State Utility, as the 0:06:06.839 --> 0:06:10.360 state owned entity who now have some monopoly power sector, 0:06:10.880 --> 0:06:15.400 they are the destinated off takers for any electricity that's 0:06:15.520 --> 0:06:18.400 generated into the grid and for any powerfulty segrement that 0:06:18.520 --> 0:06:22.400 has to be signed. Definitely, I think the results for 0:06:22.640 --> 0:06:26.200 exceeded the expectations and it's something that took them by 0:06:26.320 --> 0:06:29.200 the price as well. I think it's like to say 0:06:29.200 --> 0:06:32.640 they wanted some solar under this scheme, but maybe not 0:06:33.160 --> 0:06:35.279 nine gig of what's under the rooftop scheme, which they 0:06:35.320 --> 0:06:38.680 now have to pay eighty something dollars for every exported 0:06:38.760 --> 0:06:41.400 metal hour. This is important that you note that it's 0:06:41.720 --> 0:06:46.000 rooftop solar specifically, so it's people powering their homes, but 0:06:46.120 --> 0:06:49.480 I would say predominantly or is it industry? Is it 0:06:49.680 --> 0:06:54.080 rooftop for kind of I guess retailers? Where where is 0:06:54.120 --> 0:06:56.680 it all sitting? So we have seen most of the 0:06:57.120 --> 0:07:01.400 adoption being driven by the industrial aftim this the account 0:07:01.480 --> 0:07:04.920 for slightly more than half. Residential actually take quite a 0:07:04.960 --> 0:07:07.720 fair bit as well, but one third of all installations 0:07:07.800 --> 0:07:10.840 as of the end of November, so it's it's quite 0:07:10.840 --> 0:07:14.720 a good mix between commercial and residential, but mostly still 0:07:14.840 --> 0:07:20.400 the the businesses, the industrial estates, manufacturing plants, they have 0:07:20.600 --> 0:07:23.520 a lot of power consumptions. You noted that there was 0:07:23.560 --> 0:07:25.560 a deadline to connect it to the grid in order 0:07:25.600 --> 0:07:28.160 to take advantage of the FAD and tariff and additionally, 0:07:28.760 --> 0:07:31.840 you know this was something that was very beneficial. All 0:07:31.920 --> 0:07:35.280 of this is grid connected, None of this is micro grid, 0:07:35.400 --> 0:07:39.080 mini grid and is there any opportunity for that there 0:07:39.480 --> 0:07:42.120 Most of them are grid connected in order to be 0:07:42.200 --> 0:07:44.000 eligible for the fit INTERI if they have to be 0:07:44.040 --> 0:07:48.920 connected to the grid. Unlike other neighboring countries in southas Asia, 0:07:49.000 --> 0:07:53.880 like Indonesia or Philippines, where rural electrification is still more 0:07:53.960 --> 0:07:58.200 a fab in gender for for the government, Vietnam actually 0:07:58.240 --> 0:08:01.480 has quite a high electrification of almost a hundred percent 0:08:02.040 --> 0:08:05.120 at the moment. They also have the advantage way, you know, 0:08:05.320 --> 0:08:08.760 the geography of the country is that it's one joined 0:08:08.800 --> 0:08:11.280 the piece of land where they can actually run the 0:08:11.320 --> 0:08:14.440 transmission line all the way from the north to the south, 0:08:14.640 --> 0:08:18.600 So there is very little discussions about you know, offerate 0:08:18.680 --> 0:08:22.960 microgrips and electrification. This is a lot of solar being 0:08:23.000 --> 0:08:24.800 at it in a short period of time, but is 0:08:24.880 --> 0:08:29.280 it also very concentrated within a few areas would it 0:08:29.320 --> 0:08:32.600 be considered distributed solar across the country? So it would 0:08:32.640 --> 0:08:37.000 be considered distributed solar because there is sexually capacity limit 0:08:37.160 --> 0:08:40.920 for each rooftop PV system size that is one mag 0:08:41.240 --> 0:08:44.240 asy or about one point to make a peak in 0:08:44.440 --> 0:08:47.800 order to be eligible for the fit entire scheme. However, 0:08:48.000 --> 0:08:53.000 there is no rule against having multiple systems installed in 0:08:53.120 --> 0:08:56.520 the same location as long as they have different connection 0:08:56.679 --> 0:09:00.599 points and are signed under different power producer. So, in 0:09:00.880 --> 0:09:04.800 terms of the distribution that we see throughout Vietnam, because 0:09:04.920 --> 0:09:08.720 of the resources and where the monarch we have seen 0:09:08.720 --> 0:09:12.520 a lot of these solar developments being concentrated in the south, 0:09:12.679 --> 0:09:15.839 in the southern provinces. That's really interesting to think that 0:09:15.960 --> 0:09:19.360 people might be setting up lots of these units and 0:09:19.480 --> 0:09:22.520 then maybe connecting them all in separately just to kind 0:09:22.520 --> 0:09:25.440 of work around what looks like a loophole. That bigs 0:09:25.480 --> 0:09:28.040 the question, then, how is the grid handling all of 0:09:28.120 --> 0:09:32.360 this with it coming online so incredibly quickly. Yeah, I 0:09:32.440 --> 0:09:36.800 think congestion and grid operations will definitely be major challenges 0:09:36.880 --> 0:09:40.239 for the getting a nice passes the moving forward. Preliminary 0:09:40.320 --> 0:09:45.520 reports now suggest that total solar capacity spends it approximately 0:09:45.640 --> 0:09:49.560 about eighteen to nineteen gigo. It's not from both utility 0:09:49.640 --> 0:09:53.480 skill and rooftop solar systems, and at a sixteen percent 0:09:53.559 --> 0:09:57.720 capacity effect that this would roughly translate about twenty five 0:09:57.800 --> 0:10:01.599 to twenty seven terra what hours of solar generation in 0:10:01.720 --> 0:10:06.400 a year, all about ten to eleven percent of Vietnam's 0:10:06.640 --> 0:10:10.480 twenty nineteen total total power DEMA. So, the Aennunce power 0:10:10.559 --> 0:10:15.000 system has historically been dominated by a lot of coal, 0:10:15.240 --> 0:10:19.439 a lot of hydro and gas generations, so plants and 0:10:19.640 --> 0:10:24.760 technologies that generate at fairly constant levels or fluctuate within 0:10:24.840 --> 0:10:28.079 the very narrow range from hour to hour. So moving 0:10:28.160 --> 0:10:31.439 from that to regret that now has a sizable amount 0:10:31.600 --> 0:10:35.520 of solar which generates during certain hours of the day 0:10:35.920 --> 0:10:39.440 will really require the operators to rethink how the grid 0:10:39.559 --> 0:10:43.400 needs to be managed, what the optimal dispatch portfolio would be, 0:10:44.080 --> 0:10:47.480 and how they should be meeting meeting pipe monster outside 0:10:47.520 --> 0:10:51.280 of the solar generation hours. I think moving forward, totomin 0:10:51.360 --> 0:10:54.760 would really be a feature of the system as well 0:10:55.440 --> 0:10:58.640 until sufficient storage solutions are being deployed, and we have 0:10:58.760 --> 0:11:02.040 not heard much discussis or see much development of it 0:11:02.240 --> 0:11:06.679 from so the grit offering, the have actually now indicated 0:11:06.679 --> 0:11:10.800 that potentially up to one point three ARRA what hours 0:11:11.320 --> 0:11:14.640 of renewable energy, which is mainly solo, could be cultilled 0:11:14.679 --> 0:11:19.320 in twent one alone due to congestion, access generation during 0:11:19.360 --> 0:11:23.040 the solo peak generation hours and a mismanched in the month. 0:11:23.960 --> 0:11:26.920 That's a lot of solo power that potentially will be 0:11:27.120 --> 0:11:31.440 cultill and will challenge the financials for the projective policy. 0:11:31.760 --> 0:11:38.160 Now for a very short break stay with us. The 0:11:38.240 --> 0:11:41.200 solar has gone in, but the storage hasn't. For presumably, 0:11:41.360 --> 0:11:44.480 if there's more storage in the future, that would provide 0:11:44.559 --> 0:11:48.480 additional capacity going forward. So my question is what is 0:11:48.640 --> 0:11:51.640 the projection for increased demand going forward and is this 0:11:51.720 --> 0:11:55.560 a country that we anticipate will have pretty rapidly increasing 0:11:55.640 --> 0:11:59.240 demand for power Over the last second put in twenty 0:11:59.320 --> 0:12:02.679 ten and twenty nineteen, Vietnam actually saw their power the 0:12:02.760 --> 0:12:05.480 month growth at a compounty and your growth rate of 0:12:05.720 --> 0:12:10.280 about ten percent every year, and moving forward, the government 0:12:10.360 --> 0:12:14.400 actually expect growth rate to maintain about eight per enem 0:12:15.000 --> 0:12:16.880 for for the next few years, so that is a 0:12:16.960 --> 0:12:20.240 lot of power the month that they're expecting to come online. 0:12:20.280 --> 0:12:23.120 Of cost. COVIDS nineteen has saken its a hit on 0:12:23.240 --> 0:12:26.079 power the mond growth, but still they have seen a 0:12:26.160 --> 0:12:29.160 growth in their economy and in terms of power the month, 0:12:29.840 --> 0:12:32.760 they will need a lot of additional generation capacities in 0:12:32.920 --> 0:12:36.000 terms of storage discussions that we're seeing on the ground. 0:12:36.080 --> 0:12:40.559 We have seen indicative visibility studies being awarded to g 0:12:40.880 --> 0:12:43.880 International to to look at the technologies that they could 0:12:43.920 --> 0:12:47.760 potentially incorporate into the Vietnamese PO rate, but we have 0:12:47.880 --> 0:12:50.600 not seen the upcome of its study as of now. 0:12:51.200 --> 0:12:56.000 So what might this mean for other countries either neighboring 0:12:56.120 --> 0:13:00.800 or actually globally that are looking at increasing the volume 0:13:00.840 --> 0:13:03.000 of solar that they have within their grid, because I 0:13:03.040 --> 0:13:04.599 think there are a lot of countries right now that 0:13:04.679 --> 0:13:09.040 are looking decarbonization and a climate change quite seriously, and 0:13:09.160 --> 0:13:12.760 their electricity makes as a potential way to tackle that. 0:13:13.120 --> 0:13:15.800 The first thing is that this does actually explain where 0:13:15.840 --> 0:13:18.480 all the solar panels were going in the fourth quarter 0:13:18.520 --> 0:13:20.920 of last year, so I manage our global forecasts and 0:13:21.000 --> 0:13:23.160 try and make sure that the numbers kind of add up. 0:13:23.640 --> 0:13:25.679 And to be honest, we could see that there was 0:13:25.720 --> 0:13:28.600 a shortage of raw materials that wouldn't particularly the glass 0:13:28.640 --> 0:13:31.680 of the right shape and size, that wouldn't be happening 0:13:31.760 --> 0:13:34.160 if there wasn't a big demand sinc somewhere, and now 0:13:34.240 --> 0:13:36.520 it turns out it was Vietnam. We did actually have 0:13:36.600 --> 0:13:40.120 a buffer for that. So that explains that I think 0:13:40.960 --> 0:13:43.319 this is actually the same lesson as we should have 0:13:43.440 --> 0:13:46.319 learned from other solar booms and busts, which is that 0:13:46.800 --> 0:13:48.959 it's probably not a great idea just to write solar 0:13:49.000 --> 0:13:52.800 develop as a blank check, because they are quite good 0:13:52.840 --> 0:13:54.480 at building a lot of solo in a very short 0:13:54.559 --> 0:13:57.079 period of time, and it might be more sensible to 0:13:57.160 --> 0:14:01.920 have a more sustainable long term building which people didn't 0:14:02.280 --> 0:14:05.160 just stick a lot of solar and particularly congested those 0:14:05.200 --> 0:14:07.400 of the grid. How would you define that by a 0:14:07.440 --> 0:14:11.319 long time? I mean maybe building eleven to twelve gig 0:14:11.480 --> 0:14:14.160 what's over a couple of years if you're a count 0:14:14.160 --> 0:14:17.000 through the size of Vietnam, which has a population of 0:14:17.040 --> 0:14:19.880 just under a hundred million people, and so still pretty fast. 0:14:20.080 --> 0:14:23.440 To three years is still quick. It's just not too much. 0:14:23.840 --> 0:14:26.080 You had build solar really fast. That's the great thing 0:14:26.120 --> 0:14:28.840 about solar. It's also the problem with solar if you 0:14:29.000 --> 0:14:32.040 just tell developers, hey, build it and we'll pay you 0:14:32.600 --> 0:14:36.000 over eighty dollars and mega hour for every megal hour exported, 0:14:36.080 --> 0:14:38.480 because solar these days is really quite cheap. I think 0:14:38.520 --> 0:14:40.720 that a logic question that yet them was trying to 0:14:40.960 --> 0:14:44.640 balance was that they actually had quite a big concern 0:14:44.800 --> 0:14:48.720 on supply short teach that they expected to happen or 0:14:48.840 --> 0:14:51.120 to start as soon as the end of twet twet 0:14:52.200 --> 0:14:55.200 or one. So for them there was a bit concern 0:14:55.280 --> 0:14:58.800 that they're trying to rapidly fill the supply gap and 0:14:58.880 --> 0:15:02.040 get as much fast the online is possible. And then 0:15:02.080 --> 0:15:04.320 weather which from him for them it came in the 0:15:04.400 --> 0:15:07.240 form of solar, But still I agree that you know, 0:15:07.400 --> 0:15:11.160 the planning for the GRIP has not been been organized 0:15:11.240 --> 0:15:14.360 in a systematic meilo to metch the piece at which 0:15:15.880 --> 0:15:19.600 development has happened, and now they are stuck paying. I 0:15:19.640 --> 0:15:22.400 think it's a three point six dollars per mega wart 0:15:22.520 --> 0:15:27.360 hour in u S dollars for twenty years for these systems. 0:15:27.840 --> 0:15:30.200 So how could this be done better in in order 0:15:30.320 --> 0:15:32.960 to slow down the process and kind of even and 0:15:33.080 --> 0:15:36.360 out over a quick to three year period. The office 0:15:36.440 --> 0:15:39.480 one is auctions, but it's very difficult to build small 0:15:39.560 --> 0:15:42.320 scale solar by which I mean less than about ted 0:15:42.400 --> 0:15:46.280 megawatts with auctions. One possibility would have been to have 0:15:46.600 --> 0:15:50.640 a sort of queue in which systems have to register 0:15:51.080 --> 0:15:52.840 and you could cut the feed in tariff, or that 0:15:53.080 --> 0:15:55.920 the exports tariff more frequently. When Germany had a boom, 0:15:56.160 --> 0:15:59.560 it had a massive above expected boom which was only 0:15:59.600 --> 0:16:02.960 seven whats so Germany in twenty eleven had a boom 0:16:03.000 --> 0:16:07.040 that was smaller than Vietnam. In twenty twenty, Germany moved 0:16:07.080 --> 0:16:10.520 to changing its exports tariff once a quarter and then 0:16:10.560 --> 0:16:13.960 once a month, which basically meant that it could adjust 0:16:14.080 --> 0:16:18.160 the incentive more quickly to the actual cost of systems 0:16:18.200 --> 0:16:21.080 going in and that meant it didn't quite didn't overpay 0:16:21.200 --> 0:16:23.640 quite as much. And also because developers had a bit 0:16:23.680 --> 0:16:26.120 of long term certainty that it wasn't going to drop 0:16:26.360 --> 0:16:30.600 too much, they built projects in a slightly more organized 0:16:30.640 --> 0:16:33.720 way rather than trying to just shove them all on roofs. 0:16:33.760 --> 0:16:38.080 In December, with this excess that's being curtailed, do you 0:16:38.160 --> 0:16:42.200 think that there's any potential for Vietnam to export some 0:16:42.320 --> 0:16:45.440 of this electricity to other neighboring countries or is that 0:16:45.600 --> 0:16:48.480 not how the grid system is set up? There probably is. 0:16:48.520 --> 0:16:52.160 The congestions likely to be local, so you literally cannot 0:16:52.200 --> 0:16:54.680 get the solar onto the wires for a few hours 0:16:54.720 --> 0:16:57.280 a day because there's too much shoulder in particular locations, 0:16:58.280 --> 0:17:02.640 so exporting it is not going to be an option 0:17:02.760 --> 0:17:06.200 unless the grid is significantly built out. Local grid congestion 0:17:06.320 --> 0:17:09.760 is becoming a massive issue with solar, and part of 0:17:09.840 --> 0:17:13.640 it is that, generally speaking, developers are building multiple systems 0:17:13.760 --> 0:17:16.080 in the same part of the grid at the same time, 0:17:16.400 --> 0:17:18.639 which means that the grid doesn't have a congestion problem 0:17:19.320 --> 0:17:22.880 one week and then the next week potentially if three 0:17:23.000 --> 0:17:26.159 systems have connected, it does have a massive congestion problem. 0:17:26.359 --> 0:17:27.960 And also it's just for a few hours a day. 0:17:28.119 --> 0:17:31.639 That's the other frustrating thing because if you're only generating 0:17:31.960 --> 0:17:38.040 peak output for say eleven am to two pm, then 0:17:38.200 --> 0:17:41.440 that's just three hours a day that you have curtailed electricity. 0:17:41.560 --> 0:17:43.480 So you don't want to build a massive factory there 0:17:43.520 --> 0:17:45.639 because you don't need be able to use it on 0:17:45.800 --> 0:17:48.720 this free electricity for three hours a day, and that 0:17:48.880 --> 0:17:52.320 that would not work. So is the expectation that solar 0:17:52.359 --> 0:17:56.560 development will completely drop off because they've already built so much, 0:17:56.720 --> 0:17:58.520 or do you think that they'll roll out something that's 0:17:58.520 --> 0:18:01.399 a little bit more controlled like what Jenny you were 0:18:01.440 --> 0:18:04.919 suggesting before. So the discussions that are happening right now, 0:18:05.040 --> 0:18:08.560 actually they started after the solar boom that we saw. 0:18:09.280 --> 0:18:13.080 Is that for large skills solar developments, what they're trying 0:18:13.119 --> 0:18:15.880 to do is to have it in a more systematic memo. 0:18:16.280 --> 0:18:20.800 So they're looking at auctions and be a substation capacity 0:18:20.920 --> 0:18:24.120 auctions or building solar parts. Is that, as we've seen 0:18:24.200 --> 0:18:27.639 in other countries like Cambodio, India, that's what they actually 0:18:27.760 --> 0:18:30.840 planned to do. We don't have an idea of what's 0:18:30.960 --> 0:18:35.760 the capacity that they're looking to auction out, but they 0:18:35.840 --> 0:18:40.080 are set to be potentially launching a pilot, hopefully within 0:18:40.240 --> 0:18:44.760 one each of this year. Was this something that really well? 0:18:44.800 --> 0:18:47.400 I think we didn't see coming and then nobody saw coming, 0:18:47.440 --> 0:18:49.879 and which then leads me to another follow on question 0:18:49.920 --> 0:18:52.960 to that, which is, do we see another boom like 0:18:53.119 --> 0:18:56.240 this happening somewhere in the world and do we have 0:18:56.320 --> 0:18:58.399 an idea of where it might be. Trouble is, we 0:18:58.440 --> 0:19:01.280 don't see this until they happen. I have my suspicions 0:19:01.320 --> 0:19:06.800 about Brazil personally. Brazil also has a program it's basically 0:19:06.880 --> 0:19:09.800 net metering for projects up to five megawats and they 0:19:09.840 --> 0:19:13.399 don't have to be on the same site as the 0:19:13.800 --> 0:19:17.119 power demand that they're net metering for, and power is 0:19:17.160 --> 0:19:20.800 relatively expensive in Brazil, so the economics are good. Brazil 0:19:20.920 --> 0:19:23.359 is importing a lot of a lot of stuff from China, 0:19:23.440 --> 0:19:25.840 which is not showing up on the official installation CHAP 0:19:26.720 --> 0:19:30.840 statistics yet. So I think Brazil, which we currently have 0:19:30.960 --> 0:19:33.280 it's about about two point seven to three point five 0:19:33.280 --> 0:19:35.680 gigawatts built in twenty twenty, I think it might turn 0:19:35.720 --> 0:19:37.800 out to be more than that. So one to watch 0:19:38.280 --> 0:19:42.040 Caroline So in a lot of countries people are considering 0:19:42.280 --> 0:19:45.280 co locating photobo taps with agriculture or at least not 0:19:45.560 --> 0:19:48.399 using solar to take agricultural land out of production, and 0:19:48.680 --> 0:19:51.960 sometimes that works better than others. Particularly some of this 0:19:52.200 --> 0:19:55.600 case studies in China suggest that PV and agriculture, it's 0:19:55.680 --> 0:20:00.359 actually just PV subsidizing some really bad agriculture. These systems 0:20:00.400 --> 0:20:04.760 in Vietnam, do you think they are located with agriculture? 0:20:05.160 --> 0:20:07.119 So that's a really good costume to me. So I 0:20:07.240 --> 0:20:10.119 think there are some projects that are co located with 0:20:10.280 --> 0:20:15.359 agriculture or shrimp farming. That's happening. And interestingly, there are 0:20:15.480 --> 0:20:20.119 also discussions now and reportedly investigations into systems that are 0:20:20.200 --> 0:20:26.080 installed on mountain structures situated on agricultural lend. But what 0:20:26.240 --> 0:20:29.879 they have found as many of these systems or lends 0:20:30.000 --> 0:20:33.280 are not actually growing any crops or wearing any animals 0:20:33.359 --> 0:20:35.840 as they claim to be doing. So what they're really 0:20:35.920 --> 0:20:39.399 doing is just using the the free land, putting up 0:20:39.440 --> 0:20:43.000 mounting structures, putting the panels on and disguising them as 0:20:43.080 --> 0:20:50.240 rooftop solar um interesting roof topic agricultural solar. So they're 0:20:50.240 --> 0:20:54.159 they're supposed to have big growing crops underneath or raising animals, 0:20:54.200 --> 0:20:57.480 and they're not they're farming somewhere. Yes they are, from 0:20:58.600 --> 0:21:03.240 what some of the reports news reports that we see 0:21:03.320 --> 0:21:05.480 coming out is that when they make a visit to 0:21:05.600 --> 0:21:08.680 the site, for example, it's meant to be a mushroom. 0:21:08.720 --> 0:21:12.960 From what they actually found backs of mushrooms being tied 0:21:13.040 --> 0:21:15.960 to the mounting structures, but not grown on the land 0:21:16.359 --> 0:21:21.080 moldy perhaps from sitting there forever. And actually just last 0:21:21.160 --> 0:21:25.240 year the Ministry of Industry and Trade issue guidelines to 0:21:25.640 --> 0:21:28.320 clarify that in order to be eligible for the roof 0:21:28.400 --> 0:21:31.359 tousle of interiffs, the system has to be on a 0:21:32.320 --> 0:21:35.359 on a roof that has an independent function as a 0:21:35.480 --> 0:21:38.760 roof apart from just holding the panels. But it remains 0:21:38.800 --> 0:21:40.879 to be seen what or if any action will be 0:21:40.960 --> 0:21:45.600 taken against these agrige cultural PEP systems, because presumably the 0:21:45.720 --> 0:21:49.320 consequences that the feeding tariff is taken away from you, Yes, 0:21:49.640 --> 0:21:52.960 if it's standing correctly, but then that also begs the 0:21:53.040 --> 0:21:57.399 question is how often are these being audited? So it 0:21:57.640 --> 0:22:01.399 is a ongoing discussions now in Vietnam, there have been 0:22:01.520 --> 0:22:07.359 some concerns are called for investigation into these previous systems, 0:22:07.680 --> 0:22:09.359 especially in the last week. I've seen a lot of 0:22:09.480 --> 0:22:13.399 that come out, but the final outcome remains to be 0:22:13.480 --> 0:22:16.200 seen what they wor actually do. It is tough to 0:22:16.359 --> 0:22:19.520 to audit every roof top system, I guess, especially to 0:22:19.560 --> 0:22:23.520 do it regularly. If times and bangs and mushrooms under 0:22:23.560 --> 0:22:25.560 the solar panels means they passed the order at once, 0:22:25.680 --> 0:22:27.600 that might mean they get away for it with it 0:22:28.000 --> 0:22:30.480 for the project lifetime sort of developed as a sneaky 0:22:30.880 --> 0:22:36.400 we'll call them enterprising. They're getting they're getting it done. 0:22:36.600 --> 0:22:39.360 This is really really interesting. So now, Jenny, you asked 0:22:39.400 --> 0:22:42.160 the last question, Jenny, do you have any more questions? 0:22:42.240 --> 0:22:45.240 Will you be my co host today? So Vietnam is 0:22:45.320 --> 0:22:49.000 not the last boom we will see, but it's a 0:22:49.000 --> 0:22:52.680 bit a very interesting one. Indeed, thank you very much 0:22:52.800 --> 0:22:55.800 for coming on the show today and explaining that to 0:22:55.880 --> 0:22:58.640 all of us. Definitely one to watch and I will 0:22:58.720 --> 0:23:02.920 be keeping my eyes on Brazil, Caroline, Jenny, thanks for joining, 0:23:03.080 --> 0:23:05.880 Thanks for having us. Thank you, Dada, Thank you Caroline. 0:23:13.920 --> 0:23:16.479 Today's episode of Switched On was edited by Rex Warner 0:23:16.600 --> 0:23:19.520 of grace Stoke Media. Bloomberginia is a service provided by 0:23:19.560 --> 0:23:23.080 Bloomberg Finance LP And its affiliates. This recording does not constitute, 0:23:23.160 --> 0:23:26.680 nor should it be construed as investment advice, investment recommendations, 0:23:26.880 --> 0:23:29.640