Italian energy conglomerate Enel, known for its investments in renewable energy, is set to exit Vietnam, mirroring similar moves by Norway’s Equinor and Denmark’s Orsted. Enel had plans to invest in generating 6 gigawatts of renewable energy in Vietnam but the decision to withdraw reflects concerns about the country’s renewable energy sector.
Experts believe Enel’s focus was on wind power, crucial for Vietnam’s energy transition away from coal. However, challenges like the lack of offshore wind development frameworks have hindered progress. Delays in project approvals and sea area allocations have frustrated investors, leading companies like Equinor and Orsted to pull out of Vietnam.
Connecting renewable energy projects to the grid is another hurdle due to inadequate infrastructure. Despite promising renewable energy goals, Vietnam heavily relies on coal. Funding needs for new power plants and grid improvements are estimated at $134 billion.
Although investors have retracted due to various reasons, there’s an opportunity for Vietnam to become a sustainable manufacturing hub in Southeast Asia by focusing on renewable energy. With competitors like Indonesia and Malaysia embracing renewable sources, Vietnam’s decision to lead in sustainable manufacturing will determine its future competitiveness.