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Such a price is a difficult choice for investors to make as the level in Thailand is 18 cents, Smith told the event, co-hosted by the European Chamber of Commerce in Vietnam (EuroCham) and the Vietnam Trade Promotion Agency (Vietrade) just two weeks after Decision 37/2011/QD-TTg signed by Prime Minister Nguyen Tan Dung.
Effective from August 20, the decision sets the delivery wind power price at VND1,614/kWh, excluding value-added tax and the rate is adjustable in line with Vietnam dong/U.S. dollar exchange rate movements.
Khanh acknowledged EVN was unable to decide the buying price, which remains one of the major barriers to having more investment in renewable and even traditional energy projects. This is also the reason behind power shortages in Vietnam, particularly in the dry season.
Erdal Elver, president and CEO of Siemens Vietnam, said the price remained a question but the decision was good news. “You may know that we have been waiting for a long time for such a decision and I think that this is very positive.”
Energy experts estimated one MW required average investment capital of US$2.2 million. So, they called for the Government to provide many incentives to fuel fast wind power development in Vietnam.
The incentives in the decision include tariff exemptions for goods including raw materials and semi-finished products that are not yet produced in Vietnam and imported for wind power projects as well as corporate income tax and land rent reductions and breaks.
Elver, who is also EuroCham vice chairman, and Robert Bosch Vietnam managing director Vo Quang Hue queried plans to balance the country’s energy mix and invest in new supplies to reduce the country’s reliance on non-renewable energy.
Khanh underlined that the Government had paid special attention to solar and wind power generation given the facts that the potential of hydropower generation in Vietnam was forecast to be fully exploited in 10 years’ time, offshore natural gas was limited and the country began to import coal.
Khanh said Vietnam had invested in a number of solar and wind projects for households and family-run enterprises since 2000. But development of these new energy sources has been met with a host of obstacles, including high production costs and a lack of back-up equipment.
Khanh said investors now had more favorable conditions and support from the Government, and the decision was part of this. He encouraged investors to look for the components produced in Vietnam for their renewable energy generation.
The Government web portal quoted the Ministry of Trade as saying that there were 21 wind power projects with each having capacity of 30 MW in research and development in Binh Thuan, Ninh Thuan, Binh Dinh and Lam Dong. These central and Central Highlands provinces are expected to bring about potential design capacity of more than 2,000 MW.
As wind and solar power investments are still underdeveloped, the country still has to rely heavily on hydropower, and coal- and gas-fueled plants. Khanh said hydropower plants made up nearly 40% of the national output and this was why hydropower supply fell short in the dry season from January to June, around three billion kWh in 2010.
Khanh said 38 projects would be commissioned in 2011-2015, with 26 invested by EVN and 12 by other domestic investors. He noted 15 of the EVN projects would go online in 2011, contributing 5,000 MW to the national grid.
Last year’s electricity supply rose 14.82% year-on-year to 97,335 GWh, with 42.3% of which produced by EVN, 51.93% purchased from other sources including build-operate-transfer (BOT) plants and 5.77% imported. EVN put the total supply this year at 110,820 GWh.
Source: SGT
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