Price rethink would allow windpower to breeze in

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The Ministry of Industry and Trade (MoIT) in a report just sent to Prime Minister Nguyen Tan Dung quoted an international consultant as saying that the power tariff should be 10.2 -12 US cents for 1 kilowatt per hour.

“The international consultant said the tariff should be 10.2 - 12 US cents for the country to achieve 1,000 MW of wind power by 2020 as outlined in Power Development Plan VII. The current 7.8 cents per kWh (for a 20-year purchase contract) was not sufficiently lucrative to entice investment into wind power projects in Vietnam,” the MoIT wrote.

The MoIT, however, did not present its own opinion on the issue in its report as well as reveal the name of the consultant. The ministry’s concerned authorities refused to comment when contacted by VIR last week.

The prime minister’s Decision 37/2011/QD-TTg fixed the selling price for electricity generated by wind power projects at 7.8 US cent which private investors claimed was too low to make wind power commercially viable.

As a result, in the three years since Decision 37 came into force, only two wind power projects have been connected to the national grid - Binh Thuan 1 project’s 30MW phase 1 and Bac Lieu project’s 16MW phase 1.

The investors behind these two projects have been persistent in their petition for price hikes, while another 40 projects remain consigned to the drawing board, awaiting better news.

Werner Kossmann, chief technical advisor of German agency for international co-operation GIZ, told VIR that the current 7.8 US cent was still too low to attract investors despite a 1 US cent subsidy from the Vietnam Environment Protection Fund, environment protection free, land free, and emission reduction credit taken into account.

“If the power tariff increases to 10.2-12 US cent for 1 kilowatt per hour, dozens of projects would come online,” he said.

The MoIT recently proposed to the prime minister that the domestically-owned Cong Ly Company’s Bac Lieu wind power project should have its sales price raised to 11.5 US cents for 1 kilowatt per hour during the first ten years and 9.8 US cents during the four following years.