Vietnam building energy technology level Market - Forecast(2024 - 2030)

The Vietnam building energy technology level market is expected to grow at a CAGR of 5.32% during 2024-2029. Unprecedented electricity demand in Vietnam has been created by rapid economic growth, rising manufacturing and industrial investments, and the expansion of the middle class. For example, Vietnam's government projects that the country's electricity consumption will increase by 10–12% per year through 2030, which is among the fastest growth rates in Asia. The Institute of Energy of Vietnam (IEV) predicts that for the next ten years, power demand and consumption in Vietnam will rise, which will affect the country's energy security. 

For example, In December 2023, at the 28th session of the Conference of the Parties (COP28), Prime Minister Pham Minh Chinh revealed Vietnam's Resource Mobilisation Plan for implementing the Just Energy Transition Partnership (JETP) in collaboration with the International Partners Group. Though Vietnam was the third country to sign a JETP, after Indonesia and South Africa, it was the first to announce a resource mobilization plan to implement the program. This proactive move is considered a key prerequisite and a pivotal milestone in unlocking financial support from the JETP, thus accelerating Vietnam’s building energy technology level market.

The report “Vietnam Building Energy Technology Level Market– Forecast (2024-2029)”, by IndustryARC, covers an in-depth analysis of the following segments of the Vietnam building energy technology level market.

By Technology: Building Energy Analysis, Building energy management systems (BEMS), Building energy modeling (BEM), Others

By Type: Renewable energy, Alternative energy technology, Energy conservation, Embodied energy in buildings, Energy management, Others

By Model: White Box, Black Box, Grey Box

By Building Component: Roofs, Walls, Foundation, Infiltration, Windows (Conduction), Windows (solar heat gain)

By Application: Heating, Cooling, Ventilation, Lighting, Water Heating, Refrigeration, Drying, Computers and Electronics, Others

By End User:  Residential, Commercial, Industrial, Outdoor

•  The building energy technology level market in Vietnam is anticipated to be driven by the national policy tools supporting the increase of energy efficiency. For example, the Vietnam National Green Growth Strategy lays out goals for reducing greenhouse gas emissions, creates a Green Growth Fund, and outlines a growth plan for the country from 2012 to 2050.

•  Supportive policies and incentives for renewable energy development in Vietnam are predicted to generate opportunities for Vietnam's building energy technology level market over the forecast period. For instance, The Law on Investment (2020) provides the general principles and conditions for foreign investment in Vietnam, including incentives and guarantees for renewable energy projects.

•  Vietnam's national socioeconomic development policy for the period 2021-2030 states that it plans to establish a series of "smart cities" in the north, central, and south of the country. As a result, the government is expected to encourage smart city development by organizing infrastructure investment and the development of smart city area utility applications thereby expanding the market growth of building energy technologies.

Walls dominated the Vietnam building energy technology level market in 2023. Exterior walls are the most important components of the building envelope. Walls, as a barrier between the internal and outdoor environments, require characteristics that reduce energy losses while retaining durability. For a building to be eligible for the design certification, businesses need to demonstrate that, compared to conventional structures, their design will save at least 20% on energy, water, and embodied energy in building materials.

The HausNeo Apartments project, created by EZ Land Vietnam Development JSC, was granted EDGE certification by the International Finance Corporation (IFC) in August 2019 because it satisfied the standards for exceptional green building design. HausNeo reported reductions of 28% in energy, 32% in water, and 45% in embodied energy in materials by implementing EDGE-enhanced features like lower window-to-wall ratios, external shading devices, energy-efficient lighting, low-flow faucets, and lower embodied energy material.

Cooling dominated the Vietnam building energy technology level market in 2023. The need for air conditioning systems has increased as the country continues to invest extensively in infrastructure projects such as commercial buildings, residential complexes, and industrial zones. The Vietnam air conditioner industry is positioned to thrive, drawing both domestic and international manufacturers to meet rising demand. For instance, Hira Industries, a UAE-based provider of HVAC and construction materials launched an HVAC manufacturing unit in Vietnam in October 2022, producing thermal insulation and acoustic solutions. The growing middle class, greater disposable money, and changing lifestyles all contribute to market expansion. Adoption has also been boosted by the government's measures to encourage energy-efficient and ecologically friendly air conditioning technologies.

Industrial dominated the Vietnam building energy technology level market in 2023. The country's industrial and construction sectors are quickly increasing, resulting in increased energy demand. The government recognizes the importance of energy efficiency and has created several legislation and efforts to encourage sustainable building practices. For instance, The EU-Vietnam Sustainable Energy Transition Programme (SETP), which is funded by the EU and is being carried out by UNIDO and the MoIT's Energy Efficiency and Sustainable Development Department from 2023 to 2027, includes the project on speeding up energy efficiency in large industries through energy management systems, framework optimization, and the promotion of energy efficiency in small and medium-sized enterprises in Vietnam (IEEP). These include implementing energy efficiency legislation and regulations, as well as establishing incentive programs and financial help for energy-efficient projects.

Vietnam pledged to achieve net-zero carbon emissions by 2050 at the United Nations Climate Change Conference (COP26) in 2021. With funding from the Global Environmental Facility (GEF) through UNDP, local development and promotion of buildings that are energy-efficient in Vietnam address energy-saving measures, resulting in direct greenhouse gas (GHG) mitigation of 73,035 tCO2.

Vietnam is projected to produce more high-quality, energy-efficient buildings to meet environmental goals, save money on upkeep and repairs, and minimize future energy consumption. For instance, one of the top companies offering commercial real estate services in Vietnam, Cushman & Wakefield (CWK), states that industrial real estate in Vietnam must go green. It encourages developers to consider factors that affect the building's community, like green spaces, parks, libraries, and children's rooms, in addition to lowering emissions and safeguarding the environment. In addition, real estate linked with environmental, social, and governance principles was bound to become more and more popular. Consequently, the market for building energy technology in Vietnam grows in tandem with the rise of green buildings, which may eventually be viewed as long-term investments.

The growing demand for Building Energy Management Systems (BEMS) is significantly shaping the Vietnam building energy technologies market landscape. One of the BEMS technology's primary features is its ability to give the facility operator comprehensive and real-time data on energy use. The system's total energy efficiency may be raised with the use of this information. Increased environmental protection results from improved energy efficiency since fewer resources are needed. In December 2023, for maximum sustainability and efficiency, ABB energy management and smart building technologies are used at the National Innovation Centre (NIC) in Hanoi. A key component of the effort to achieve net zero emissions objectives is the provision of smart buildings for industries that are propelling economic growth. Energy management and building automation systems may boost energy efficiency by 25–67%, which lowers operating expenses and greenhouse gas emissions while also enhancing worker well-being.

Vietnam is still lacking the smart grid hardware or the ability to control supply and demand to expedite the switch to renewable energy sources. Despite considerable renewable energy installation achievements, Vietnam's coal usage has increased by 75% in the last five years. This rate is unrivaled by any other country on the planet. Vietnam now intends to phase out coal and transition to LNG. By 2030, the PDP7 aimed for a gas capacity of 129.5 GW. This will necessitate importing up to 10 billion m3 from 2026 to 2035. However, substituting coal with LNG does not improve things in terms of environmental impact. According to the Intergovernmental Panel on Climate Change (IPCC), methane has an 87-fold stronger warming effect than CO2 during 20 years. If Vietnam sticks to its current objectives, it would increase the consequences of its number one concern, climate change.

There are barriers in the way of domestic and foreign investors entering the local renewable energy business, despite the government's efforts to loosen regulations. There is uncertainty about future energy costs, limited cash and funding opportunities, unbankable power buying agreements (PPA), and other issues. As a result, engagement by the private sector remains limited, which is another disadvantage in maintaining the country's energy security.

Capital and funding are scarce. Domestic banks and developers lack the financial resources and experience required to finance large-scale renewable energy projects required to meet the net-zero emissions target by 2050. Due to a lack of openness, information, and intermediaries, international investors have difficulty entering the local market. Public financial sources, such as the state budget and official development aid (ODA), are also inadequate and hampered by budgetary and debt constraints.

Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the Vietnam building energy technology level market. Major players in the Vietnam building energy technology level market are Ather Energy, GridPoint, Databricks, Carto, Benevolent.ai, and Landis+Gyr among others.

In April 2024, Databricks introduced the Data Intelligence Platform for Energy, a single platform that applies AI to data and people in the energy sector. Built on an open lakehouse architecture, Databricks' Data Intelligence Platform for Energy helps organizations leverage enormous volumes of energy data and construct generative AI applications without compromising data privacy.

In June 2023, GridPoint received a $150 million investment to expand commercial building energy management. The new credit arrangement should finance GridPoint to accelerate its energy management and optimization products for the commercial real estate industry.