Vietnam capable of wind power windfall

Last week at Vietnam Wind Power 2022, hosted by the Global Wind Energy Council (GWEC), key members of government with both local and international industry were brought together to discuss key topics impacting the wind industry.

Vietnam capable of wind power windfall

Mark Hutchinson, head of Asia for GWEC, said that it is a critical time for the wind industry in Vietnam. The feed-in tariff (FiT) for wind power projects expired in 2021 and, while 4GW of onshore wind ventures was completed before it expired, there is another 4GW of projects that signed agreements but missed the deadline. Many of these projects have completed construction since the FiT expired but are still not producing electricity, Hutchison explained.

State-run Electricity of Vietnam recently published proposed tariffs for wind projects that missed the FiT deadline, but the process for implementing the proposed tariffs is not yet clear. One wind investor at the event described his concern on attraction in comparison with other countries.

“Wind power is a long-term investment, but uncertain tariffs mean renewable energy projects are just treading water right now,” he said.

It is an urgent challenge for offshore projects in Vietnam as there are still no precise restrictions on methods and timelines for the approval of marine resource measurement, observation, inquiry, survey, and assessment. “Furthermore, there is disagreement about whether organisations and individuals are entitled to conduct wind measurements as well as geological and topographical surveys at sea,” the investor added.

However, Bui Vinh Thang, Vietnam country manager at GWEC, said that all big wind players have representative offices in Vietnam, illustrating a strong commitment here. However, they need a clear and transparent policy in order to ensure a long-term project in Vietnam.

Adam Bruce, Global External Affairs director of Mainstream Renewable Power, acknowledged that Vietnam is fully capable of developing and attracting international investment in this new industry, thus making a significant contribution to the development of this new industry and development of the country, and at the same time contribute to achieving net-zero emissions by 2050.

He said that Mainstream became an early entrant to the Vietnam offshore wind market in 2016, and is actively developing two projects totalling 1.9GW. Mainstream has made significant progress with both projects and is committed to helping Vietnam achieve its installed capacity targets by 2045, as detailed in the latest draft Power Development Plan VIII (PDP8).

Meanwhile, Gero Tschierschke, head of New Markets for Asia-Pacific at Siemens Gamesa told VIR, “Vietnam has huge potential and ambitions with strong commitments to net-zero, but for me, it’s less about number, it is much more about visibility and realisation of the projects.”

He stressed that each country has its own problems, but clear and tranparent polices are the key guides for investors to meet higher targets in 2035 and beyond.

Despite pandemic disruptions bringing challenges to the local industry, Vietnam had a record year in commissioning 779MW of intertidal projects in 2021, making it the second-largest market in the region. Following the installation rush driven by the cut-off of FiTs, GWEC Market Intelligence predicted that new installations in Vietnam have fallen off in 2022 and will most likely stay at a low level until a clear offshore wind regulatory framework is in place.

However, taking into account the net-zero commitments as well as offshore wind capacity targets by 2030, as included in the most recent draft of the PDP8, Vietnam is poised to usher in an era of accelerated renewable energy growth and become the offshore wind market leader in Southeast Asia by the end of this decade, according to GWEC.

If instigated in a progressive way to allow the industry to mature naturally from some well-established preliminary projects, a phased approach of rounds of wind farms consists of differing tariffs and reductions of these into auctions over time can allow offshore wind to be more cost-effective than most other forms of energy generation, it said.

GWEC suggests that to enable this, there is an urgent need to establish a cross-ministerial coordinating committee, likely chaired by the Ministry of Industry and Trade. Offshore wind policies and regulations affect many different ministries and levels of government. This committee would work to accelerate the resolution of bottlenecks across different ministries.

Kees van Baar - Ambassador of the Netherlands to Vietnam With the substantial commitment to achieve net-zero carbon emissions by 2050, Vietnam has truly become one of the leaders in the region, and now is working hard to turn this ambitious commitment into reality. A transformative programme is required to green Vietnam’s economy. The further growth of the renewable energy sector and the phasing out of fossil energy will be pivotal in that process. A higher, both nearshore and offshore wind capacity target in the draft Power Development Plan VIII (PDP8) would be a clear marker for investors and lead to a quicker drop in the cost of capital, with major job opportunities in Vietnam. International partners like the Netherlands stand ready to support Vietnam on this journey to a cleaner and greener future. The Netherlands has many years of experience in the offshore sector due to oil and gas production in the North Sea. Dutch companies hold a market share of approximately 25 per cent of the total European offshore wind energy market value, in construction of wind farms as well as the transmission of electricity. Dutch financial institutions are also very active in the sector, accelerating the growth. I am excited to continue our close collaboration with Vietnam across the climate agenda and the energy transition through policy dialogue, technical capacity building and project commissioning. Hilde Solbakken - Ambassador of Norway to Vietnam This is an exciting time for the development of wind power in Vietnam, especially offshore wind. Norway welcomes the ambitions of net-zero emissions by 2050 by the Vietnamese government, which demonstrates the country’s strong political will and commitment to addressing climate change. Radical transformation in every sector of the economy is needed to meet the threat of climate change. A shift to clean and renewable energy, including wind power, is at the centre of this transition. Like Vietnam, Norway is in the process of developing the offshore wind industry. We have much to gain from sharing our experiences on developing enabling domestic policies that spur on new knowledge, technical advances, and investments in offshore wind. Bringing all relevant stakeholders into this work, across economic sectors and geographies, can help us find the best way forward. Ben Backwell - CEO Global Wind Energy Council Vietnam has reached its 4GW wind installation milestone. The draft PDP8 considers wind power as an important source of energy for the country, with the ambitious target of 21GW onshore wind and 7GW offshore wind by 2030. All over the world, the wind sector is expected to grow even more aggressively in the next decade, with an increasing global emphasis on the green transition and coal phase-outs. Wind energy is not just green and clean, it also helps ensure national energy security and fight climate change. It is important to keep the momentum going and find solutions to address the bottlenecks that are preventing the wind energy sector from reaching its potential. The Vietnam Wind Power event has established itself as the official wind event in Vietnam. Following its success since being launched in 2018, we have been delighted to welcome everyone to join us once again. This year, we have been happy to have the attendance of government representatives, embassies, CEOs, provincial leaders, and many senior level representatives from leading global and local players in the wind industry.

Proposals to promote Vietnam's energy transition The energy elasticity coefficient in Vietnam for the 2016-2020 period averaged 1.67, a relatively high figure compared to some other countries that could prompt the need for more drastic remedy measures.

Bespoke answers vital for offshore wind gains Offshore wind is one of the fastest-growing energy sectors in the world, and is set to be a transformative force for the global energy transition. Bui Vinh Thang, country manager in Vietnam at the Global Wind Energy Council (GWEC), told VIR’s Nguyen Thu how future policy for steady and sustainable growth can be ensured, providing sufficient time for the industry to take off and mature in Vietnam.

Newest draft of Power Development Plan VIII comes with several highlights Stakeholders expect the latest draft of the Power Development Plan VIII (PDP 8) to be soon approved, paving the way to kick-start fresh investment projects in the power sector.

Ministry of Industry and Trade may issue renewable energy price framework in late November The Ministry of Industry and Trade (MoIT) is expected to complete the appraisal of the new renewable energy price framework on November 25-30, which is a basis for Electricity of Vietnam (EVN) to negotiate the specific price with the investors.

European corporations take part in growing Vietnam's green economy Regional business executives of leading European corporations in various sectors met with Prime Minister Pham Minh Chinh at the Green Economy Forum and Exhibition (GEFE) 2022 on November 28 in Ho Chi Minh City.