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Windy Times in Emerging Economies: De-Risking Renewable Energy Investments: Case Study Vietnam

Ketelhodt, Thorge F Leander LU (2016) In IIIEE Masters Thesis IMEN56 20161
The International Institute for Industrial Environmental Economics
Abstract
In emerging economies, high investment costs hinder fast renewable energy (RE) deployment. Compared to industrial states, higher financial costs originate mainly from investment barriers and consequently risks. Using Vietnam as a case study for emerging economies, the objective of this thesis is to identify barriers and ways to remove risks by developing a de-risking policy mix that consequently helps to increase RE deployment rates. The study finds out that, even though Vietnam’s climate are favorable for RE projects, however, the country’s contextual policy settings are not conducive to investments. Additionally, an ex-post effectiveness analysis of current policies showed that they are not working effectively yet. Barriers were... (More)
In emerging economies, high investment costs hinder fast renewable energy (RE) deployment. Compared to industrial states, higher financial costs originate mainly from investment barriers and consequently risks. Using Vietnam as a case study for emerging economies, the objective of this thesis is to identify barriers and ways to remove risks by developing a de-risking policy mix that consequently helps to increase RE deployment rates. The study finds out that, even though Vietnam’s climate are favorable for RE projects, however, the country’s contextual policy settings are not conducive to investments. Additionally, an ex-post effectiveness analysis of current policies showed that they are not working effectively yet. Barriers were identified with the help of a newly developed analytical framework that has a higher usability than common ones. The main barriers are deep-rooted structural barriers, such as the permitting process and corruption. The policy recommendations developed in this thesis suggest to change the cornerstone instrument to a new auctioning system, the “One Stop Auctioning System” (OSAS), which was developed in this thesis. It minimizes the contact between investors and local authorities and with it the options for corruption and delays. This instrument, combined with secondary de-risk instruments, like capacity building on all relevant levels and sectors (public and private), the introduction of a university program on RE, or improved access to capital by introducing public loan guarantees, has high chances to make emerging economies like Vietnam a more attractive country for RE investments. (Less)
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author
Ketelhodt, Thorge F Leander LU
supervisor
organization
course
IMEN56 20161
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Renewable Energy, De-Risking, One Stop Auctioning System, Barriers
publication/series
IIIEE Masters Thesis
report number
2016:19
ISSN
1401-9191
language
English
id
8895531
date added to LUP
2016-11-30 10:35:19
date last changed
2016-11-30 10:35:19
@misc{8895531,
  abstract     = {In emerging economies, high investment costs hinder fast renewable energy (RE) deployment. Compared to industrial states, higher financial costs originate mainly from investment barriers and consequently risks. Using Vietnam as a case study for emerging economies, the objective of this thesis is to identify barriers and ways to remove risks by developing a de-risking policy mix that consequently helps to increase RE deployment rates. The study finds out that, even though Vietnam’s climate are favorable for RE projects, however, the country’s contextual policy settings are not conducive to investments. Additionally, an ex-post effectiveness analysis of current policies showed that they are not working effectively yet. Barriers were identified with the help of a newly developed analytical framework that has a higher usability than common ones. The main barriers are deep-rooted structural barriers, such as the permitting process and corruption. The policy recommendations developed in this thesis suggest to change the cornerstone instrument to a new auctioning system, the “One Stop Auctioning System” (OSAS), which was developed in this thesis. It minimizes the contact between investors and local authorities and with it the options for corruption and delays. This instrument, combined with secondary de-risk instruments, like capacity building on all relevant levels and sectors (public and private), the introduction of a university program on RE, or improved access to capital by introducing public loan guarantees, has high chances to make emerging economies like Vietnam a more attractive country for RE investments.},
  author       = {Ketelhodt, Thorge F Leander},
  issn         = {1401-9191},
  keyword      = {Renewable Energy,De-Risking,One Stop Auctioning System,Barriers},
  language     = {eng},
  note         = {Student Paper},
  series       = {IIIEE Masters Thesis},
  title        = {Windy Times in Emerging Economies: De-Risking Renewable Energy Investments: Case Study Vietnam},
  year         = {2016},
}