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Wind power: investors wait for PM’s decision on Feed-in-Tariff price

The Feed in Tariff (FIT) price of VND2,000 per kwh will expire in seven months, but the price for the next period has not been fixed yet.

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Electricity of Vietnam (EVN) reported that it has signed contracts on purchasing electricity from 113 wind power projects with total capacity of 6,038 MW. Twelve projects with total capacity of 582 MW have been put into commercial operation.

Reports by investors show that 87 projects (4,432 MW) may become operational prior to October 31, 2021. Meanwhile, 14 projects (1,024 MW) are not likely to become operational prior to that day.

However, the figures reported by investors are described as "too optimistic". Analysts point out that some investors have not completed site clearance. But firms say their can complete construction prior to the deadline to be eligible for the FIT.

In Quang Tri alone, the total electricity capacity of all sources approved by the provincial authorities is 4,724 MW.

According to the provincial Industry and Trade Department, of 25 approved projects, only 16 can open before October 31.

However, experts believe the number of projects will be no more than eight to 10.

An investor implementing three wind power projects in Ninh Thuan and Dak Lak provinces said he is worried as the proposal to extend the FIT until the end of 2022 has not been approved, and there is no information about the new price.

He said it is more difficult to execute wind power projects than solar power. Covid-19 has made it harder to buy equipment and materials and to send specialists to Vietnam, slowing down project implementation.

Even when equipment docks at Vietnam’s ports, it is not easy to move oversized or overweight cargo.

Wind power projects also heavily depend on weather conditions. There are only three months in the year when the conditions are favorable enough to install equipment and meet standards and requirements on labor safety.

 

Electricity of Vietnam (EVN) reported that it has signed contracts on purchasing electricity from 113 wind power projects with total capacity of 6,038 MW. Twelve projects with total capacity of 582 MW have been put into commercial operation.

 

As a result, it is doubtful that 4,432 MW of wind power will be operational by October 31. About 2,000 MW is the more realistic figure.

Investors want transparency

With total capacity of 582 MW, wind power accounts for less than 1 percent of total capacity (70,000 MW). Solar power, however, is witnessing a boom.

Under the eighth national power development plan, Vietnam would have 11,320 MW of wind power. As for solar power, the total capacity of solar power by the end of 2020 had exceeded the designed capacity by 2025.

Experts believe that wind power should be promoted because it is more efficient and stable than solar power.

Once the Covid-19 pandemic is contained, the demand for electricity will increase. The ongoing electricity oversupply will exist only for a short time.

The development of different electricity generation sources is needed to avoid electricity shortages which occurred in 2018 and 2019.

At meetings with Quang Tri provincial People’s Committee and EVN, many investors proposed extending the FIT application. However, EVN said this is within the jurisdiction of the Ministry of Industry and Trade and the Government.

In late 2020, the Ministry of Industry and Investment (MOIT) sent a document to the Government, proposing to continue the FIT after October 31, but at lower prices.

It proposed prices of 7.02 cent per kwh for onshore projects that will be operational from November 2021 to December 2022, and 6.81 cent for projects to be operational in 2022.

As for offshore projects, the prices are 8.47 cent and 8.21 cent, respectively.

At a working session with wind power investors in Quang Tri province, an EVN leader asked if investors would develop projects with these tentative prices.

Huong Hoa has become the main wind power site of Quang Tri province. There are 22 communes and towns in the district, and half of the communes have wind power investors.

In reply, an investor did not answer, but said that under the pressure of time, the prices for equipment, construction and transportation all will be higher. And assessment of investment efficiency will be based on the FIT of VND2,000 per kwh as stipulated in Decision 39.

However, investors need to be informed about the new policies as soon as possible. 

Luong Bang

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