Investing in floating solar power in Vietnam

Vietnam is a country that’s growing fast, with one of the world’s top-performing economies and a rapidly expanding population.

This kind of growth means the country needs to vastly increase its energy capacity. Hydroelectricity is one of the main sources of renewable energy in the country, much as it is in Canada, yet climate change makes it challenging to meet these needs through hydro sources. Prolonged dry seasons are reducing reservoir levels in dams and limiting how much electricity they can produce.

At the Da Nhim-Ham Thuan-Da Mi hydropower plant in central Vietnam, a solar power plant “floats” on the dam’s reservoir. Photo: Asian Development Bank.

With a view to diversifying its energy mix, Vietnam has made a commitment to increase its volume of non-hydro renewable energy projects through the mobilization of private-sector financing. The first of these involves the Da Mi hydro power plant in the country’s central Binh Thuan province. There, a solar power plant has been made to “float” on the dam’s reservoir, utilizing space that would not have otherwise been used. It produces enough energy to power 6,800 households a year, imagine the approximate number of households in Coburg, Ontario, or in Squamish, British Columbia.

Implemented by Da Nhim-Ham Thuan-Da Mi Hydro Power Joint Stock Company (DHD), with financing from Canada and the Asian Development Bank (ADB), the 47.5-megawatt peak (MWp) Da Mi Solar Power Plant generates electricity during daylight hours. This reduces the strain on the hydro power station and allows for its generation capacity to be used during evening peak hours.

“It combines 2 sources of renewable energy: hydro when it rains and floating solar when there’s sun,” explains Jackie Surtani, the ADB’s director of infrastructure finance for East Asia, Southeast Asia and the Pacific. “It’s super cool from both of those perspectives.”

Improving reliability and stability

Surtani says the floating photovoltaic solar power facility, the largest of its kind in Southeast Asia, sits on just 8% of the DHD reservoir, so it has the capacity to be expanded. Placing the solar panels on water has a cooling effect, and it doesn’t take away productive agricultural land, as ground-mounted solar and wind projects often can.

Community groups meet to learn about the importance of sustainable agricultural practices. Photo: Da Nhim-Ham Thuan-Da Mi Hydro Power Joint Stock Company.

Combining hydro and solar generation helps bring more reliable electricity, something that can be difficult with renewable sources that produce energy intermittently—for instance, only when there is sun or wind. A critical next step is developing battery storage, which is complex and will take time, Surtani says. And it’s important to create transmission grids and power plants where there is demand, to bring the power to where it is most needed.

The Da Mi Solar Power Plant is helping Vietnam promote clean energy and meet its climate-action goals. More importantly, the successful financing of the project provides lessons and a model for others. One of the biggest challenges in emerging markets is the need for a stable legal and regulatory environment, Surtani says. In such places, the role of ADB, with support from Canada, is to act as a “first mover and to catalyze the rest of the market,” he says. This could make conventional lenders, like banks, feel more comfortable about financing such projects directly in the future. “That would be music to our ears,” he says.

Benefits for surrounding communities

Anne Valko Celestino, a social development and gender specialist at ADB, says that as well as generating electricity, the Da Mi Solar Power Plant project has provided benefits for people in surrounding communities, particularly women and girls. It promotes gender equality by offering skills training in hydro and solar energy technology and provides employment opportunities for women in the maintenance and operation of the plant. The project also includes health and education programs.

A gender action plan is an important feature of the project, Valko Celestino says. For example, DHD has committed to adopt inclusive work practices, such as raising awareness on respectful workplaces. In August 2020, the company and the women’s union of the local district ran a joint training course on gender equity and health care for women and children. The session was attended by 70 people from 50 households in the Da Mi and La Da communities surrounding the facility.

Truong Thi Muoi, deputy president of the Ham Thuan Bac Women’s Union, talks to a community group about gender roles, gender equity and family violence. Photo: Da Nhim-Ham Thuan-Da Mi Hydro Power Joint Stock Company.

Truong Thi Muoi, deputy president of the women’s union, provided participants with information about gender roles, gender equality and family violence. Participants were also informed about how to safeguard women and children from sexual harassment and sexual abuse. Finally, they were provided with technical training on efficient agricultural practices to improve planting and pest-control techniques for their cashew and coffee crops.

Valko Celestino says another priority is to promote educational opportunities for people in surrounding communities. In October 2020, DHD provided financial support for 110 scholarships for local students from low-income households. Additionally, staff at the facility who clean the solar panels have received training on occupational safety and health.

“For our projects to deliver maximum benefits, we make extra efforts to engage with local communities and open up new opportunities, especially for women and girls,” Valko Celestino says. “We’re happy to work with committed partners like DHD to ensure that development gains from our projects are inclusive and sustainable.”

Everybody has to “do their bit”

Surtani says that such benefits and the impact of the project on climate change are encouraging, although the problems faced are daunting. “If we give up, I think it’s even worse. We have to do the best we can do,” he says. “And we need everybody—financial institutions, governments, private-sector companies—to do their bit.”

Vietnam plans to generate an increasing amount of its energy capacity from non-hydro renewable sources. Building on the success of this Canada-funded project, the ADB has gone on to finance 3 more renewable energy projects in the country, Surtani says, and it is looking at financing 2 more of them in the next few months. He’d also like the ADB to support floating solar projects in all its Asia-Pacific member countries.