|The La Gan offshore wind project will contribute local jobs, billions of dollars into the Vietnamese economy, and many more benefits over its lifetime |
Offshore wind energy is at the heart of the Climate Action Plan’s ambition to cut CO2 emissions in the electricity sector by two-thirds and increase the renewable energy share of electricity demand to 70 per cent by 2030, from its current 35 per cent.
With a massive estimated potential of 160GW offshore wind power within the distance to shore from 5-100km, Vietnam has favourable conditions to create an offshore wind industry. A long coastline, ample wind resources, and stable politics are the key parameters to creating a green and forward-looking industry that can supply huge amounts of green electricity at attractive prices while creating new jobs and attracting investments. Studies carried out by the Danish Energy Agency and the World Bank also recommend that 10GW offshore wind power could be in operation in Vietnam by 2030.
The Politburo’s Resolution No.55-NQ/TW published in February 2020 clearly outlines the need to develop supporting policies for offshore wind power development in Vietnam. Offshore wind can also support Vietnam’s Nationally Determined Contribution under the Paris Agreement, under which the country has committed to implement climate change policies. Vietnam’s target is to reduce 9 per cent of greenhouse gas emissions by 2030 or up to 27 per cent with international support.
In the context of Vietnam’s current balancing act between economic growth and the prevention of electricity shortages in the future, offshore wind can provide both scale and reliability as an energy source.
|Project leaders have been hard at work with the agreements made and deals signed |
One of the Danish government’s priorities is to support Vietnam for sustainable and green development with the spearhead of developing a sustainable energy sector as the result of the cooperation between the two countries in the Vietnam-Denmark Energy Partnership programme. It started in 2013 and focuses on capacity building and exchanges of experiences among experts from the two countries. Through this programme, Denmark is helping Vietnam to develop a long-term strategy to expand a sustainable energy industry capable of integrating well renewable energy sources as well as increasing energy efficiency.
The cooperation between the two countries is not just limited to between the two governments. One of the important milestones of cooperation in the private sector is that in July 2020, Danish developer Copenhagen Infrastructure Partners (CIP) signed an MoU with Binh Thuan People’s Committee to develop the La Gan offshore wind power project off the coast of the south-central province.
The La Gan project is aimed to be one of the first large-scale offshore wind power projects in Vietnam. With an expected capacity of up to 3.5GW, the estimated total investment value for all project phases is about $10.5 billion. It is jointly developed by CIP, local partners Asiapetro and Novasia, and managed by the offshore wind expert Copenhagen Offshore Partners (COP).
The La Gan project’s main shareholder, CIP, is a Danish fund management company focusing on renewable energy investments, including offshore wind, onshore wind, solar photovoltaic, biomass and energy-from-waste, energy storage, transmission, and Power-to-X. CIP has raised eight infrastructure funds with total equity of $18 billion from more than 40 Danish and international investors.
CIP is developing more than 20GW of offshore wind assets across the globe, including in the United States, the United Kingdom, Germany, Australia, South Korea, Japan, and more. Meanwhile, COP is the project manager of CIP’s offshore wind assets with world-class experiences in offshore wind project development, construction management, and operational management.
“By implementing the highest international standards, using the most advanced wind-power technology, our goal is to secure Vietnam's long-term energy needs and support the development of the local industry in a sustainable way,” a representative of La Gan Wind Power Development Corporation said.
The La Gan venture will generate thousands of full-time jobs in Vietnam and make significant contributions to the country's economic development. According to a detailed economic impact study performed by international experts BVG Associates, the project is projected to provide several benefits, including the creation of over 45,000 full-time equivalent jobs in Vietnam and contributing over $4.4 billion to the Vietnamese economy over the project’s lifetime.
As the La Gan project is being installed across a number of years, it is likely that there will be more opportunities to use Vietnamese suppliers in later years, as the offshore wind market grows.
The industry is waiting for the Vietnamese government’s final decision on the country’s Power Development Plan VIII that will shape the future for energy development in the next two decades. The La Gan project and its shareholders are fully committed to the Vietnamese government’s vision in Resolution 55 for sustainable energy development, and they are looking forward to supporting the Vietnamese government to ensure the success of the offshore wind industry in the country.
The project is continuing to collaborate with local communities supporting several local charities and corporate social responsibility programmes through donations to charities focusing on children in disadvantaged circumstances in Binh Thuan as well as Tuy Phong district and Com Co Thit in Hanoi; donations to fishermen in Tuy Phong, Phu Quy, and Bac Binh districts to support and raise environmental awareness in marine areas; and donations to provinces heavily impacted by the 2020 central Vietnam floods as well as donations to Binh Thuan to fight against the current pandemic.