Vietnamese I-REC prices hit record low, unredeemed figures rise to 1.32 TWh

The Vietnamese International Renewable Energy Certificate market is grappling with issues of oversupply and record low prices. From January to July, unredeemed current-year vintage Vietnamese I-RECs was recorded at 1.32 TWh, marking an 11% increase compared with the same period last year, data from I-TRACK Foundation showed.

Despite redemption figures for current-year I-RECs being up 353% compared with last year, the market's redemption figures were unable to catch up with the large issuance figure of 2.01TWh.

Platts assessed current-year wind/solar I-RECs at 51 cents/MWh on Aug.14, down 29% since March 14 when it was assessed at 66 cents/MWh. On the other hand, current-year hydro I-RECs were assessed at 19 cents/MWh on Aug. 14, down 32% from the March 14 assessment of 25 cents/MWh.

The majority of unredeemed vintage 2024 I-RECs are hydro I-RECs, accounting for 56% of the total unredeemed figures. Vietnam is at the forefront in Southeast Asia in terms of installed hydroelectric capacity -- achieving a total generation of 81 TWh in 2023.

Market participants have consistently commented on the oversupply of hydro I-RECs, which is the main driver for prices to decrease. A local power generator stated, "The market is very saturated with hydro I-RECs now, that is why prices for hydro [I-RECs] are so low,".

Another factor contributing to the drop in hydro prices is the lack of market knowledge among buyers. A local Vietnamese asset owner claimed they have been receiving bids as low as 12 cents/MWh for current year vintages. "They [buyers] want [to buy it] at 12 cents/MWh, [but] we can't," the asset owner noted.

Regarding wind and solar I-RECs, traders and asset owners claimed that market participants are reducing their prices to gain an advantage against competitors. "Their prices fluctuate week by week. Market participants will see an offer and reduce their own prices, but when their competitors increase their prices, they will do the same," the local power generator said.