South Korean conglomerates seek investment framework for wind and gas energy

According to local media platforms Vnexpress and VOV, 50 top executives from major South Korean corporations participated in a dialogue with Vietnamese Prime Minister Pham Minh Chinh on July 1. They demonstrated significant interest in energy projects, particularly in wind and gas power in Vietnam.

Former South Korean Prime Minister Han Seung-soo, currently a senior advisor at the law firm Kim & Chang, highlighted the significant expansion of South Korean companies' investments in various sectors in Vietnam.

"The Vietnamese government has consistently shown exceptional attention and support to South Korean businesses, " he said. "The trade and investment relationship between our countries is underpinned by a robust foundation of excellent political and diplomatic relations, active exchanges, and close-knit ties."

Jung Yeonin, vice president of Doosan Enerbility said, "We are ready to participate in renewable energy projects to help Vietnam achieve its goal of carbon neutrality by 2050. We hope PM Chinh and relevant agencies will support our efforts to integrate turbine products into these projects. We are also willing to transfer technology and collaborate with Vietnam to train specialised personnel."

GS Energy has invested in a $3 billion liquefied natural gas (LNG) power plant in Long An. In 2021, the conglomerate received an investment certificate and completed the pre-feasibility study report by September 2023.

GS Energy chairman Huh Yongsoo expressed hope that the project could be completed and start selling electricity by the end of this year.

"We hope the Prime Minister and Vietnamese agencies will allow us to implement global financial mechanisms and provide legal support," he said.

Vietnam’s Power Development Plan VIII aims to develop over 30,420MW of new gas-fired power capacity by 2030, with LNG accounting for 75 per cent (22,824MW) of this capacity. The plan includes 13 LNG projects to be developed by 2030. Additionally, Vietnam plans to develop approximately 27,880MW of wind power by 2030, with offshore wind accounting for 6,000MW.

The installed power capacity is projected to reach about 150,000MW by 2030 and increase to 510,000MW by 2050, which is eight times the current capacity. With an annual economic growth rate of 6-6.5 per cent, Vietnam’s electricity demand for production and consumption is very high.

"The need for investment in the energy sector is immense," said Minister of Industry and Trade Nguyen Hong Dien.

Minister Dien also added that the Ministry was researching special mechanisms for developing LNG power and offshore wind power, including minimum electricity output purchase guarantees and a mechanism for converting gas prices to electricity prices.

At the end of May, the MoIT issued a price framework for LNG power generation, with a maximum ceiling price of nearly VND2,600 per kWh for investors to reference.

Beyond approved energy plans, the ministry is also finalising mechanisms related to direct power purchase agreements (DPPA). "Today marks the first day of implementing the DPPA mechanism, laying the foundation for business cooperation," Minister Dien said.

Furthermore, the government is directing the development of rooftop solar energy for self-consumption and revising the electricity pricing mechanism to market-based pricing.

PM Chinh also encouraged leading South Korean conglomerates to expand their investments and cooperation with Vietnam to promote "new horizons of cooperation" based on a "global, comprehensive, and a people-centric" approach.

This aims to achieve a bilateral trade target of $100 billion by 2025 and $150 billion by 2030. In 2023, bilateral trade reached $76 billion. South Korea is currently Vietnam’s third-largest trading partner after China and the United States, the largest foreign investor with the cumulative registered capital of $87 billion, and the second-largest official development assistance partner.

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