Foreign investors have started showing more interest in Vietnam’s wind power generation market in recent months, however, they suggested the government to raise the power price to make it more reasonable.

Tra Vinh Province People’s Committee has recently given the go-ahead to Singapore-based Janakuasa Pte Ltd and Ecotech Vietnam to build the Hiep Thanh Wind Power Plant with a total investment of VND3.37 trillion (US$146 million). The 2,700ha plant has a designed capacity of 78MW from 18-19 turbines.

Earlier, Tra Vinh province also licensed South Korea’s Unison eTech Co Ltd and HCM City-based Asia Energy Petroleum Corporation to develop the first phase of the Duyen Hai wind power project, which will see an investment of VND2.8 trillion (US$125 million) in its first phase with a designed capacity of 48.3MW from 21 turbines. Once operational in December 2019, the project is expected to generate over 135,200MWh per year.

Foreign investors have also planned to pour cash into wind power projects in other coastal provinces of Vietnam where there is untapped huge potential for wind power development. Siemens Gamesa Renewable Energy (SGRE) in April announced that it will install and commission the Dam Nai wind farm with 39MW in the southern province of Ninh Thuan.

SGRE said that it expects significant growth in Vietnam in the coming years as the country begins to utilize some of the best wind resources in South East Asia, the target being to install 1 GW by 2020.

South Korea’s Doosan Heavy Industries and Construction Co in March also announced a plan to shake hands with Electricity of Vietnam (EVN) to develop an offshore wind farm project, in which Doosan will supply wind power equipment, including energy storage systems in the form of engineering, procurement, and construction for a 3MW wind farm.

Meanwhile, Thailand’s largest solar energy company Superblock Pcl. also planned to invest US$1.76 billion to install 700 MW of wind farms in Vietnam. The first phase of the investment will cost about US$650 million and consist of three near-shore farms with 142MW of capacity in Bac Lieu, 98MW in Soc Trang, and 100MW in Ca Mau province, all in southern Vietnam.

The second phase (360MW) will also be carried out in these three provinces and construction will begin when the first phase concludes. Chairman of Superblock Pcl. Jormsup Lochaya expected the projects will be operational by 2020.

Huge potential, but new policy needed

Vietnam has great potential to develop wind power as the country possesses around 3,000 km of coastline with excellent wind conditions. The highest potential areas are on the south central coast, central highlands and the Mekong Delta region with about 24GW.  

Vietnam also stands out among Southeast Asian peers in the transition to clean fuel sourcing. Under the national energy development strategy, the country targets to have an output of 800 MW of wind power by 2020, 2,000 MW by 2025 and 6,000 MW by 2030.

However, to meet the target, experts and investors said that the government needs to change the price policy as the current feed-in tarrif of 7.8 US cents per kWh applied for wind energy is too low to attract private investment in the industry. The selling price of wind power in Vietnam is among the lowest in the world as it is at 20 cents per kWh in Thailand, 29 cents per kWh in the Philippines and 30 cents per kWh in Japan.

President and CEO of Malaysian energy firm Janakuasa said that he expected the Vietnamese government to study and recalculate the price of wind power at a more reasonable level to ensure fairness between renewable energy resources. Vietnam currently applies the price of 9.35 US cents per kWh for solar power.

According to Nguyen The Mich, a wind power expert from German GIZ’s project, Vietnam has some 60-70 wind power projects, but most of them are in the planning phase or in the first phase of construction as investors are still waiting for more suitable policies from the government.

Nguyen Van Thanh, deputy head of the Electricity and Renewable Energy Department under the Ministry of Industry and Trade, admitted that the low price policy is a major cause hindering investors from pouring in the wind power industry.

Only seven wind power projects are put into operation in the country with a total output of some 190 MW, Thanh said, adding that the Ministry of Industry and Trade is studying to issue new price policies for wind power development.

Hanoitimes