A development of a new measure for renewable energy uncertainty in Vietnam by using natural language processing and textual analysis

Abstract

As indicated in the literature, renewable energy uncertainty (REU) offers a more comprehensive and reliable metric for assessing environmental degradation, and the dynamic connectedness between income inequality, the promotion of social welfare, and REU remains a contested topic. However, this index is not available in Vietnam. To determine the degree of volatility in the Vietnamese renewable energy market, we are the first to create an REU index by using natural language processing and textual analysis. We indicate that the fluctuations in the share of negative news about renewable energy in Vietnam from 2010 to 2025 clearly reflect crises and major policy shifts: spiking during grid congestion, FIT termination, the Ukraine war, the COVID-19 outbreak, and price crises, then gradually declining as those uncertainties were resolved. Additionally, from Q1 2000 to Q4 2024, our study uses Stochastic volatility in time-varying parameter structural vector autoregression (TVP-VAR) to investigate these complex relationships between welfare and renewable energy uncertainty in Vietnam. Our findings indicate that renewable energy uncertainty reacted negatively to welfare shocks for most of the time, with huge negative reactions reported in 2005, 2008, 2010, 2015, and 2020. During the crisis, however, welfare reacted positively to shocks from renewable energy uncertainty. Thus, the development of renewable energy is essential for promoting social welfare and reducing the adverse impacts of crises by enhancing energy security, stabilizing prices, creating jobs, and supporting sustainable economic resilience.