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Overview
Vietnam’s local building energy market was valued at $17.10 billion in 2023 and is projected to reach revenue of $20.14 billion by 2030 growing at a CAGR of 2.29% during the forecast period 2024-2030. The major driving forces of this market are the growing number of energy-efficient buildings in Vietnam, and policy instruments promoting national-level energy efficiency improvement. There is significant potential for energy savings in buildings, which can cut greenhouse gas emissions and support green growth. Several projects and programs have been launched by the government, international organizations, and other stakeholders to assist in the development and promotion of energy-efficient and green buildings in Vietnam. One example is the National Energy Efficiency Programme 2019-2030, which seeks to reduce the economy's energy intensity by 8% to 10% relative to 2011 levels and save 9% to 11% of total energy consumption by 2030.
Report Coverage
The report "Vietnam’s Local Building Energy Market– Forecast (2024-2030)”, by IndustryARC, covers an in-depth analysis of the following segments of Vietnam’s Local Building Energymarket.
By Technology: Building Energy Analysis, building energy management systems (BEMS), Building
energy modeling (BEM), and Others
By Type: Renewable energy, Alternative energy technology, Energy conservation, Embodied
energy in buildings, Energy Management, and Others.
By Building Type: Residential Buildings, Commercial Buildings, Industrial Buildings, Institutional
Buildings
By Building Size: High-rise buildings, Low-rise buildings
By Power Source: Solar, Wind, Hydro, Thermal, Gas, Coal, Others
By Investment Type: Vietnam Electricity (EVN), Independent Power Producers (IPPs)
By Buildings by Scheme: Green Mark, EDGE, LOTUS, LEED
By Sector: Residential, Industry and Construction, Agriculture, Transportation, Service
and Commerce, Others
Key Takeaways
· Vietnam’s local building energy market is a moderately consolidated market with several domestic suppliers. The key power generation companies accounted for about 58.45% of the market revenue in 2022. EVN with a 15.4% share is leading the market. The key market shareholders in Vietnam’s local building energy market are EVN, GENCO1, GENCO2, GENCO3, EVNCPC, PVN, Vinacomin, and BOT. However, the rest of the market is quite fragmented with other investors.
· Vietnam has strong renewable energy resources, such as hydro, thermal, solar, wind, and others. With ample and easily accessible renewable energy sources, the nation is well-positioned to use alternative power to satisfy its rapidly increasing energy demands. The construction of rooftop solar panels for residential and commercial buildings is part of a strategy to develop renewable energy sources for the generation of electricity that has been approved by the Vietnamese government.
· In Vietnam's building energy technology market, the technical landscape of energy management is undergoing a significant transformation, marked by the integration of advanced solutions to enhance efficiency and sustainability. Energy Management Systems (EMS) play a pivotal role in optimizing energy consumption within buildings. These systems leverage a combination of sensor technologies, data analytics, and smart controls to monitor, analyze, and manage energy usage in real time. Utilizing occupancy sensors, ceiling-mounted motion sensors to detect the presence of a person, and automatically control lights, temperature, or ventilation systems will be helpful in energy management.
By
Building Type - Segment
Analysis
Industrial Buildings dominated Vietnam’s Local Building Energy Market with a 35% market share in 2023.Vietnam's economy has grown and industrialized significantly. The demand for energy to power industrial structures and sustain production processes grows as manufacturing and other industrial operations expand. According to the General Statistical Office, 397 industrial parks spanning 122,900 hectares of land were built in 2023. 292 industrial parks, totaling about 87,100 hectares, are now operational. A total of 35,700 hectares of land are being used to construct another 106 industrial parks. Over 80% of industrial parks are occupied across the country, with significant northern provinces accounting for 83% and major southern provinces accounting for 91%. Vietnam's expanding industrial parks created enormous energy demand, increasing Vietnam's local building energy industry.
By
Energy Consumer - Segment
Analysis
Low-rise buildings dominated Vietnam’s Local Building Energy Market with a market share of 65% in 2023.The need to accommodate a growing population frequently promotes the construction of low-rise residential buildings in Vietnam. Low-rise structures, such as single-family homes and townhouses, contribute to the overall energy demand for households as urban and suburban areas expand. Government programs, incentives, and policies that promote sustainability and energy efficiency in the residential sector help to accelerate the adoption of renewable energy technologies and energy-efficient practices in low-rise buildings. For instance, the Vietnamese government approved the Power Development Plan 8 (PDP8) on May 15, 2023. It focuses on implementing solar power on residential rooftops and building sites, with 27 projects totaling 4,136 MW.
By Power
Source – Segment Analysis
Solar
dominated Vietnam’s Local Building Energy Market with market share of
25% in 2023.The Ministry of Energy of Vietnam unveiled the National Power
Development Plan VIII, which intends to strengthen the country's energy
security from 2021 to 2030. The government wants to deploy more power
production capacity and new grid capacity for $135 billion as part of programs
to connect the country's network to its neighbors. The revised National Power
Development Plan VII aims to achieve 13.6 GW of utility-scale solar and 3.4 GW
of rooftop solar power by 2045.In 2022, Vietnam's installed solar PV capacity
increased to around 18,474 MW from 16,660 MW in 2021, as reported by the IRENA
Renewable Energy Statistics 2023. Vietnam has installed a large number of solar
PV systems, mostly for utility projects, which has led to the expansion. To
boost the installed capacity of solar PV, the Ministry of Industry and Trade
(MOIT) has more plans.
By
Investment - Segment Analysis
Vietnam Electricity (EVN)dominated Vietnam’s Local Building Energy Market in 2023.The major purchaser of energy and the exclusive distributor and transmitter of power is Vietnam Electricity (EVN), a state-owned business that is accountable to the prime minister. The Ministry of Industry and Trade (MOIT) controls electricity. The establishment and management of the power market, power planning, price control, and authorization fall under the purview of the Electricity Regulatory Authority of Vietnam (ERAV).
By
Buildings by Scheme - Segment
Analysis
LEED dominated Vietnam’s Local Building Energy Market with the
market share of 35% in 2023.LEED, or Leadership in Energy and Environmental
Design, is a comprehensive certification program for green buildings developed
in the United States. LEED provides a foundation for creating green buildings
that are cost-effective, highly efficient, and healthy. By September 2020, the
country had 83 LEED-certified projects (125 more were pending certification).
However, the Vietnam Green Building Council 2020 reports that as of the end of
2020, LEED was the most extensively utilized GBRS in Vietnam, with 238
registered and 93 certified projects. In Vietnam, the most common certification approach is LEED (developed by the US Green Building Council).
By
Sector - Segment Analysis
Industry and Construction dominated Vietnam’s Local Building Energy Market in 2023.Throughout the projection period, Vietnam's local building energy market in the industrial and construction sectors has grown significantly. The country's industrial and construction sectors are quickly increasing, resulting in increased energy demand. Several factors contribute to the development of Vietnam's building energy sector. According to the Energy Transition Partnership, the industrial sector represented 51.3% of total final energy consumption (TFEC) in 2019. The government recognizes the importance of energy efficiency and has created several legislation and efforts to encourage sustainable building practices. These include the implementation of energy efficiency laws and regulations, as well as the establishment of incentive programs and financial assistance for energy-efficient projects.
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·
Growing number of energy-efficient buildings
in Vietnam
Buildings with lower energy consumption are becoming
more and more common in Vietnam, which is predicted to boost the country's
local building energy market. For instance, the United Nations Development
Programme (UNDP) states that the building sector is an energy-intensive one,
contributing between 35 and 40 percent of the country's overall energy
consumption, primarily of electricity. Still, there is a lot of room for
improvement in the industry's energy efficiency. Building energy use can be
reduced by 25% to 67%, which will save operating expenses and CO2 emissions,
assist the environment, and enhance quality of life. Vietnam pledged to achieve
net-zero carbon emissions by 2050 at the United Nations Climate Change
Conference (COP26) in 2021. With support from the Global Environmental Facility
(GEF) through UNDP, local development and promotion of energy-efficient
buildings in Vietnam address energy-saving measures resulting in the
achievement of direct greenhouse gas (GHG) mitigation of 73,035 tCO2.
·
Policy instruments promoting national-level energy efficiency
improvement
The Vietnamese government has realized that
rapid economic growth must coexist with increased efforts towards social
inclusion and sustainable development and that energy efficiency plays a significant
role in many aspects of these goals. The local building energy 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 (2012) 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.For instance, Vietnam's Nationally Determined Contributions (NDC) to the
Paris Agreement on Climate Change sought to reduce GHG emissions nationally by
8% using domestic resources by 2030 compared to the Business-as-Usual scenario,
and by 25% using international support. It is widely acknowledged that energy
efficiency is a crucial mitigation approach that affects the production,
transmission, and distribution of energy (particularly for major manufacturing
facilities), the residential sector, trade, services, and transportation.
Challenges – Vietnam’s Local Building Energy Market
·
Cost of demand response and power storage
systems
As Vietnam strives to
become a high-income economy by 2045, particularly in the context of the
post-pandemic green recovery, the energy sector will be called upon once more
to meet the task of supporting this next phase of growth. The challenge,
however, will be significantly more difficult this time. To meet the demands of
the nation's development, the sector must continue to grow quickly—doubling the
needed system capacity in less than ten years—but it also needs to
significantly reduce its carbon footprint, which currently accounts for 65% of
Vietnam's emissions, to better manage the sector's effects on the climate. All
of this will necessitate deliberate and ongoing reforms to raise the necessary
funds for the energy transition while maintaining the principles of justice and affordability. Despite the government's efforts to liberalize rules and make it
easier for domestic and foreign investors to enter the local renewable energy
market, obstacles remain. There is uncertainty about future energy costs,
limited cash and funding opportunities, unbackable power buying agreements
(PPA), and other issues.
·
Climate risks and physical capacity issues
Because innovative excipients do not have a
separate approval process, they can only be approved for a specific function in
a medication dosage formulation. Pharmaceutical excipient manufacturing
standards face many challenges: There is no special approval mechanism in place
for novel excipients, Excipients do not have regulatory status in the United States, and Excipients used in pharmaceutical preparations are not subject to
any strict criteria. Vietnam is among the six most affected countries by climate
change. The strong typhoons, riverine floodings, and drought, paired with the
fact that the ocean level is projected to rise 75 centimeters by 2050,
complicate the development and operation of the local energy grid. A 2019 INFORM
Risk Index, a global, open-source risk assessment for humanitarian crises and
disasters, ranked Vietnam 91 out of 191 countries largely because of the
country’s super strong typhoons, storm surges, riverine flooding, coastal
erosion, drought, and saltwater intrusion. The ocean level has already risen 20
centimeters over the past three decades and may increase by a further 75 centimeters
by 2050.Currently, Vietnam lacks the needed smart grid equipment and the
capacity to manage supply and demand to speed up the renewables transition.
Developments:
Ø On 10 May 2022, The Vietnam National
Oil and Gas Group (Petrovietnam) delegation, led by President and CEO Le Manh
Hung, met with ExxonMobil Corporation, Murphy Oil Corporation, Tellurian, and
Globalinx to promote and participate in energy projects in Vietnam. Vice
President Le Ngoc Son, representative heads of the Group's Divisions, and
leaders of PV GAS, PVEP, and BSR joined Petrovietnam's trip.
Ø On
June 12, 2023, a DNV Group delegation led by Mr. Le Gallo Brice - DNV Asia
Pacific Regional Director visited and worked at the PC1 Group office. Here, the
two sides signed a Memorandum of Understanding (MOU) in many fields, with a
main focus on the field of Renewable Energy.
Market Landscape
Technology launches, acquisitions, and R&D activities are key strategies adopted by players in Vietnam’s Local Building Energy market. In 2022, Vietnam’s Local Building Energy Marketshare has been consolidated by the top ten players accounting for 58.45% of the share.
Major players in Vietnam’s Local Building Energy Market are:
EVN-EVN is a company that operates in the energy sector. It stands for "Electricity of Vietnam," which is the largest power company in Vietnam. EVN is responsible for generating, transmitting, distributing, and trading electricity and has a significant role in the country's energy infrastructure and policies. EVN plays a vital role in meeting Vietnam's growing energy demand and advancing its energy transition goals.
GENCO1-GENCO1 typically refers to the first-generation company within a country's energy sector, particularly in the context of power generation. It's a common naming convention used in countries where the energy sector is divided into multiple entities for different functions such as generation, transmission, and distribution.
GENCO2-GENCO2 typically refers to the second-generation company within a country's energy sector, especially in the context of power generation. Similar to GENCO1, it's part of the naming convention used in countries where the energy sector is divided into multiple entities for different functions such as generation, transmission, and distribution.
GENCO3- GENCO3 likely follows the same pattern as "GENCO1" and "GENCO2" in referring to a specific entity within the energy sector, particularly in power generation. However, "GENCO3" would typically indicate the third-generation company or entity within this sector, following a similar organizational structure as the previous ones.
EVNPC- "EVNPC" doesn't appear to be a standard acronym or widely recognized term in the context of the energy sector or any other field as of my last update. It's possible that it could be an abbreviation specific to a certain organization, project, or concept that emerged after my last training data in January 2022.
PVN- "PVN" typically refers to PetroVietnam, which is the Vietnam Oil and Gas Group. It's a state-owned corporation responsible for all aspects of Vietnam's oil and gas industry, including exploration, production, refining, distribution, and trading.
Vinacomin- Vinacomin, short for Vietnam National Coal-Mineral Industries Holding Corporation Limited, is a state-owned company in Vietnam. It's the largest coal producer in the country and plays a significant role in Vietnam's coal mining industry.
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