Offshore wind development plans receive new lease of life

Offshore wind development plans receive new lease of life

The government last week asked the Ministry of Industry and Trade (MoIT) not to push back priority of gas-fired power and offshore wind (OSW) power ventures.

Under Decree No.58/2025/ND-CP dated March 3, which sets forth new detailed provisions under the Law on Electricity concerning the development of renewable energy, foreign investors will be allowed to own up to 95 per cent of an OSW power project in Vietnam.

To invest in OSW in Vietnam, foreign investors or similar must meet several conditions in terms of experience, financial capacity, participation of domestic enterprises, authority consensus, and commitment to using domestic resources.

The decree sets that the investor must have sufficient financial capacity, with their capital in the project accounting for at least 15 per cent of its total estimated investment, and their equity ratio on the capital contribution to the initiative being at least 20 per cent.

Meanwhile, domestic enterprises must hold at least 5 per cent of the charter capital or total voting shares in the economic organisation implementing the project. The domestic enterprises can be state-owned, or those in which a state-owned group with full charter capital holds more than half of the charter capital or total voting shares.

Additionally, for OSW power ventures that export electricity without using the national power system, domestic enterprises must hold more than half of the charter capital.

Decree 58 also offers incentives for OSW power projects that receive investment policy approval before 2031 and, if they supply electricity to the national system, have capacity within the total quota of 6,000MW approved in the Power Development Plan VIII (PDP8). These incentives include exemption or reduction of fees for using sea area, exemption or reduction of land use fee or rental, and guaranteed minimum long-term electricity output for initiatives selling electricity to the national grid.

Previously, the MoIT proposed postponing OSW development until after 2030, instead of the original target of 6,000MW by 2030, due to high investment costs. The capacity was expected to increase to 17,000MW by 2035.

“We appreciate the government’s commitment to accelerating offshore wind development. Vietnam’s decision to move forward with these projects aligns with its long-term energy security and climate goals. This clarity allows investors like us to confidently contribute expertise, technology, and financing to help Vietnam meet its renewable energy targets,” Stuart Livesey, CEO of Copenhagen Offshore Partners, told VIR.

By ensuring that timely project surveys, capacity allocations, and regulatory approvals are initiated in 2025, Vietnam could see its first large-scale offshore wind farms operational by around 2032, Livesey added.

“These regulations are expected to create a more favourable and transparent environment for foreign investment in OSW power in Vietnam, which will help to engage more capital, technology, and expertise to the sector. However, foreign investors may still face some challenges, such as limited grid capacity and connection, a complex approval process, and uncertainty of the market mechanism,” said Phuong Chau, a lawyer at A&O Shearman.

A number of international energy investors, including Copenhagen Infrastructure Partners and German wind energy producer PNE AG, have shown interest in OSW in Vietnam in recent years. So far, 36 domestic investors have been involved in surveys regarding OSW power development.

According to the PDP8, Vietnam aims to reach 30,000-50,000MW of power coming from wind offshore by 2050, becoming a centre for OSW power production in Southeast Asia. Nevertheless, Vietnam currently has no such initiatives in operation.

Offshore wind must be utilised for energy security The Vietnamese government is pushing for an offshore wind energy pilot this year to hit its power master plan goals and ensure energy security.

MoIT proposes delaying offshore wind power until after 2030 The Ministry of Industry and Trade (MoIT) has proposed delaying the development of offshore wind power until after 2030, instead of the original target of about 6,000MW in the next five years.