Benefits for both sides
Decision 11/2017/QD-TTg of the Prime Minister on the mechanism to encourage the development of solar power has created a breakthrough in the development of this green energy source in Vietnam. According to statistics, in 2020 alone, the total installed capacity of solar PV will reach 9.3 GWp, which is of 25 times higher than that of 2019.
ESCO model attracts the attention of many businesses because it brings benefits to both sides. Photo: SolarBK
Many businesses after installing solar power have recognized this as an investment with long-term benefits. In addition to economic value, brand value and recognition are what businesses aim for when choosing green energy solutions.
Typically, in the fiercely competitive field such as textiles and garments, in order to obtain valuable orders from international customers, in addition to price and quality factors, production standards to ensure sustainable environment are something not to be missed. At that time, suppliers using green energy will leave good impression on customers.
The model of cooperation in solar development between Oasis Garment Co., Ltd and Solar ESCO solution provider (belonging to Solar BK Group) has confirmed this. By installing a rooftop solar power system with a capacity of 233.28 kWp, the Oasis Plant can meet 54% of its own electricity demand, while cutting 190 tons of CO2 emissions. Mr. Ibrahim Ozsoy, General Director of Oasis, assessed the ESCO solution as very practical one: “It is a very reasonable initial investment, helping to reduce electricity costs. More importantly, it helps businesses improve their reputation and affirm the green brand in the supply chain.”
Choosing the ESCO model is a win-win solution for both the beneficiaries and the supplier. On the side of the beneficiaries, the benefits are clear: meeting the sustainable production standards set by customers with reasonable, low risk investment. Normally, businesses only have to spend less than 20% of the cost. In particular, there are enterprise solution packages that do not cost any money for the initial investment and maintenance during the cooperation process.
On the other side, enterprises providing ESCO solutions will receive profits based on their electricity consumption with electricity prices that are 5-10% cheaper than that of EVN.
With this form of cooperation, there will be more investment risk on the side of the ESCO solution provider. Therefore, the provider will have to find ways to optimize system performance and minimize risks. Besides, ensuring solid financial and technical capacity. This is probably also part of the reason that the ESCO model has not really developed in Vietnam, when the energy service delivery ecosystem was not strong enough.
In the past few years, the ESCO energy service market has taken certain steps with the participation of more and more companies providing energy services. More importantly, Vietnamese enterprises are no longer indifferent to the issue of energy efficiency as before.
Solar power system deployed under the ESCO model at Jim Brothers' Factory. Photo: SolarBK.
The trend of green energy transition is most evident in the apparel sector. This is also the place where many successful examples of the ESCO model are gathered.
Saigon Jim Brother's Corp. (Everan Group) is a unit in the strategic supply chain of Adidas. One of the customer's mandatory criteria is the limited amount of greenhouse gas emissions per unit of product. To ensure this requirement, Jim Brother's has come to solar power solution.
Accordingly, the plant has entered into an agreement with SolarESCO to provide a full package of energy services. Through the survey process, the two sides decided to install a rooftop solar power system with a capacity of 1 MWp, using IREX panels manufactured by the solution provider.
In this cooperation, Jim Brother's Corp spent less than 10% of the initial investment cost (excluding the cost of system reinforcement to qualify for solar installation). In return, each year the Plant reduces emissions by an average of 952 tons of CO2, cutting 7,300 MWh of electricity.
Oasis Garment Co., Ltd also chose ESCO solution for solar power system at Nha Be Factory for the same reason. In 2019, after researching and surveying, the Company's Board of Directors decided to choose the ESCO cooperation model to deploy the integrated solar PV system with a capacity of 233.28 kWp for the factory in Nha Be. With this solution, Oasis confidently asserts its "green factory" brand.
Not only manufacturing enterprises but businesses of trade - service sector are also very interested in ESCO such as ICD Tan Cang - Song Than.
Powered up and put into operation at the end of 2017, the 500.96 kWp solar power system here has generated about 784,218 kWh per year, meeting 30% of electricity demand. It is estimated that during the 12-year cooperation period, the system will help Tan Cang - Song Than ICD save about 14 billion VND in energy costs and cut about 6,200 tons of CO2.
From the above examples, it can be seen that the ESCO model is receiving more and more attention from businesses. The remaining problem is to perfect the management and operation mechanism so that the ESCO market develops actively and competes fairly. Currently, under the direction of the Ministry of Industry and Trade, the Department of Energy Efficiency and Sustainable Development is developing technical guidelines and promoting models of rooftop solar power. Previously, the Department has cooperated with EVN to deploy the ESCO model for the field of solar hot water and achieved certain successes.
Director of SolarESCO, Ms. Hoang Thi Uyen said that in order to call for financial resources for this fund, enterprises commit to develop about 200 MWp of solar PV per year from now until the end of 2023. To receive this supportive package, enterprises only need to have enough installation area, without initial investment costs and warranty costs for the entire cooperation period. SolarBK is confident that this supportive package will be a positive solution to help businesses quickly "recover" to enter the new normal.