Enel seems to be ready to close its doors in Vietnam , three sources familiar with the matter told Reuters. The move would mark the latest in a series of withdrawals by Western companies from renewable energy projects in a country that is struggling to meet its decarbonisation targets. Recently, the Scandinavian energy group also Equinor and the Danish orsted have abandoned similar projects in the country.
Despite these moves, the title Enel recorded a slight increase in Piazza Affari, rising by 0,48% to 7,09 euros, with an increase of 5,63% since the beginning of the year.
Vietnam: Renewables in Trouble and Coal on the Rise
Vietnam currently has an installed electricity capacity of around 80 gigawatts (GW) and aims to double it by 2030, with wind power expected to account for nearly 20% of the total. However, the country has had difficulties to integrate many of the new solar and wind power plants into the grid, thanks regulatory obstacles e long negotiations on energy prices. This situation has led to a increase in coal consumption to meet growing energy demand, scaring investors and slowing progress in the energy transition.
Enel reconsiders green projects in Vietnam?
In 2022, the Italian energy giant announced a commitment to generate up to 6 gigawatts of renewable energy in Vietnam, betting on Aeolian e solar. However, the reality has seen only a portion of this project move forward, with about 1 gigawatt already well underway and ready to go online this year.
Despite the potential investment, Enel's share in the Southeast Asian country is small compared to its vast global network. The company, with more than 1.300 plants and 64 gigawatts of renewable capacity worldwide, considers the Vietnamese market one of its least significant assets. Following its 2022 strategic reorganization, the company has chosen to focus on six key countries: Italy, Spain, Chile, Brazil, Colombia and the United States. Therefore, the exit from Vietnam would represent a further step towards a greater focus on the most relevant strategic markets for the company.
It is still not clear when it will be officially announced il withdrawal from Vietnam. Neither the energy giant nor Vietnam’s Ministry of Industry have commented. The company’s strategic plan will be unveiled in November, and more details may emerge then.
