Offshore developers frustrated at lack of pilot policy

October 27, 2023 | 17:29
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There is still currently no legal avenue for foreign or domestic investors to take on offshore wind power pilots in Vietnam.

A Ministry of Industry and Trade (MoIT) document to the government confirmed that there is not yet a legal basis to assign Vietnam Electricity (EVN) and domestic enterprises to deploy offshore wind power projects.

At the same time, in the application dossier to develop a revised Law on Electricity, it was proposed to amend the Law on Investment (LoI) to regulate the authority to decide on investment policies for offshore wind ventures.

Determining specific projects and domestic enterprises implementing pilot offshore wind power is currently an impossible task, as the legal corridor for sector development is still unclear.

Currently, national marine spatial planning has not been approved and there is no basis to determine the scope of marine management. In addition, the LoI does not stipulate the competent authority to decide on such investment policies.

For the immediate future, the MoIT has asked that the prime minister assigns EVN and domestic enterprises to research and survey conditions for offshore wind power development, and being ready to deploy when there is enough legal basis for all levels to have authority to assign to the investor.

EVN wants to invest in offshore wind power and battery storage, in which it asked for an offshore wind pilot project in a northern province divided into two phases between 2030 and 2035.

Offshore developers frustrated at lack of pilot policy
Offshore developers frustrated at lack of pilot policy, Photo: Shutterstock

Enterprize Energy is one such company waiting for movement. It previously submitted an application to build a 3.4-GW wind farm off the coast of the central province of Binh Thuan, with an expected investment capital of $11.9 billion. Last month, the MoIT explained that due to unissued regulations on piloting offshore wind power projects, “there is no basis to resolve the proposal” of Enterprize Energy Group.

Ian Hatton, chairman of the Board at Enterprize Energy, told VIR, “We feel the region we have chosen is technically feasible and financially viable. Vietnam benefits from an oil and gas fabrication sector and is currently manufacturing components needed in European wind farms, so the supply chain is already in place.”

Hatton added that Vietnam is a visionary country with people who are devoted to attaining economic progress while using environmentally beneficial energy sources. “Vietnam is demonstrating an exceptional worldwide commitment to responsible energy development, and we are eager to assist the Vietnamese people in this endeavour by bringing our capabilities to bear,” Hatton said.

Major global energy players are trying to expand their interest in investing in offshore wind operations in Vietnam as their net-zero objectives grow. For instance, Sembcorp Utilities and PetroVietnam have jointly sought opportunities to develop offshore wind farms in Vietnam in recent months.

Proposals involve approximately 200,000 hectares of sea area across two sites off the coast of South Vietnam, with the plan to enable the export of electricity from Vietnam into Singapore.

In response to the Power Development Plan VIII aim of 6GW of offshore wind by 2030, Stuart Livesey, CEO of Copenhagen Offshore Partners, suggested trial projects that blend 500MW and 1GW installations. These pilots might be led by state-owned corporations and experienced commercial companies, with the remaining 3GW created through competitive auctions.

“It is critical for pilot project investors to have certainty about revenue, investment, and returns. This includes having functional power purchase agreements in place without the need for a second round of financial submission negotiations,” Livesey said. “Grid capacity and availability guarantees, regulatory openness and fairness, and adequate time to create infrastructure are also requested.”

The company proposes a two-stage selection process. Each step will be handled by a separate ministry. Nevertheless, these ministries must be informed of the procedures being carried out in order to provide insight into how and when a developer will be able to complete both stages.

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By Phuong Thu

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