Press release: Virtual Dialogue on Supporting mechanism for Wind Power Development in Vietnam

On 18/4/2020, the Vietnam Initiative for Energy Transition (VIET), Vietnam Clean Energy Association Ho Chi Minh City representative office (VCEA HCM) and Binh Thuan Wind Power Association successfully organized the Virtual Dialogue on Wind Power Development in Vietnam. This event provides a platform for participants to discuss the role of Feed-in Tariff (FIT) for wind power development in the long-term, analyze and discuss limitations of grid capacity for wind power integration and privatize grid investment and propose solutions to boost the sustainable development of wind power sector in the future.

The Dialogue took place with the participation of 180 delegates from enterprises, wind power developers, investors, international and national researchers/experts in the field of energy and sustainable development, research institutes, associations, universities, and media.

The Dialogue’s panelists include:

  • Representatives of VCEA HCM – Dr. Hoàng Giang, Mr. Đặng Quốc Toản
  • Representative of Binh Thuan Wind Power Association – Mr. Bùi Văn Thịnh
  • Representative of investors – Mr. Lê Anh Tùng
  • Representative of World Bank – Mr. Trần Hồng Kỳ
  • Representatives of researchers and experts:
    • Dr. Nguyễn Anh Tuấn – Director of Renewable Energy Centre, Institute of Energy
    • Dr. Nguyễn Hồng Phương – Expert in Modelling and Grid Simulation, VIET – TU/e University, Netherlands
    • Dr. Đinh Văn Nguyên – Expert in Wind power assessment and zonation, VIET – University of Cork, Ireland.
    • Dr. Vũ Văn Tuyên – Intelligent NGR Solution, Clarkson University, NY, USA.

To open the Dialogue, Ms. Ngo Thi To Nhien – Executive Director of VIET – presented the overview of wind power development in Vietnam, which emphasize the excellent wind potential in Vietnam for both onshore and offshore wind power and the issues on long-term policies of the government orienting the sustainable development of wind power market.

During the section on FIT and FIT extension, the participants have provided comments and recommendations focusing on the impact of COVID-19 pandemic on the development of wind power sector. The pandemic is affecting the production of turbines, inverters, blades manufacturers, causing the equipment shortage in the market. Investors in Vietnam are under pressure of buying wind turbines at high prices with high advanced payment while deliverables come a year later. International EPC and domestic subcontractors continuously press the investors due to the lack of construction and installation equipment, which then rented from abroad in a narrow timeframe during 2020-2021. This leads to overbudget for many projects by millions of dollars, which makes it difficult to meet the operation deadline of 1 November 2021 as promulgated by Decision 39/2018/QD-TTg. In the context of force majeure caused by the pandemic, most participants support the Letter no.1931 of Ministry of Industry and Trade submitted to the Prime Minister proposing to extend the application of FIT mechanism to December 2023. However, the participants also recommend the Government keep the FIT as the current level for at least one more year (until 1 November 2022). Representatives of commercial banks, investment funds and Development banks all agreed that the Government should timely issue decisions to maintain the development of the wind power market in Vietnam.

The section on planning, power grid and capacity release for wind power projects in Vietnam resulted in fruitful discussions. The participants provided their arguments on the hot topics in planning and capacity release. Most participants agreed that concrete and long-term planning and strategy are essential to developing the wind power sector in a sustainable way. Following the plan strictly is a way to avoid the project booming not inline with the grid development which leads to capacity release curtailment and competition to inject power to the grid. In addition, grid expansion is needed for the projects already approved in the plan to avoid waste from curtailment during operation. Implementing the power development plan with power supply and grid expansion in parallel is an important factor to ensure the efficiency of investments is optimized. Publishing the list of wind power projects added to power development plan is a way to show the willingness of the Government, orient the market and accelerate the transition of logistic chains and facilities, wind turbine manufacturing plants and supporting industries for wind power to Vietnam after the COVID-19 pandemic.

During the discussion on medium and long-term policies to accelerate the growth of wind power in Vietnam, the participants raised a unified opinion on the importance of establishing the domestic supply chain for wind power, especially for offshore wind to the sector’s development, which will bring high economic value. Domestic enterprises should collaborate on building the supply chain for wind power. A representative of universities stressed the role of building capacity for human resources in the energy sector. There are issues related to the auction mechanism. Hence, the pilot for auctioning solar power project is needed to yield practical experiences and lessons learned to complete the legal framework and to find out the mechanisms to attract and create conditions for international finance with low-interest rates to invest in offshore wind power in Vietnam. Master plans such as Marine Space Plan, Energy Ports Plan… need to be implemented synchronously.

 

ABOUT THE VIETNAM ENERGY ASSOCIATION – HO CHI MINH CITY REPRESENTATIVE OFFICE (VCEA HCM)

Established on 23 January 2020, VCEA HCM is effectively operated with the moderation of 28 Member Companies. VCEA HCM has organized many successful workshops with the moderation of Dr. Hoàng Giang – Chief Representative of VCEA HCM and Deputy Representatives: Mr. Du Dương – Head of Solar Power Department, Mr. Bùi Văn Thịnh – Head of Wind Power Department, Mr. Đặng Quốc Toản – Head of International Cooperation Department, Mr. Nguyễn Xuân Huy in charge of Legal and Communication and Ms. Ngô Tố Nhiên – Head of Policy and Technology Department. The activities of VCEA HCM are organized with the advices from Mr. Lê Anh Tùng – Chairman of Ecotech and the immense supports from Mr. Mai Duy Thiện – President of VCEA.

 

ABOUT THE VIETNAM INITIATIVE FOR ENERGY TRANSITION (VIET)

Established in 2018, VIET is an independent think tank, acting as a bridge between research and policy, with a mission to accelerate the transition of Vietnamese energy system in a sustainable and reliable manner. VIET’s institutional independence is rooted in the individual independence of its scholars. As a Social Enterprise, VIET commits to conduct the activities for social and environmental goals. The overall objective of the Vietnam Initiative for Energy Transition (VIET) is to work towards effective and efficient international support to the energy transition in Viet Nam, in line with national law and international agreements of which Viet Nam is a member. Please visit https://vietse.vn/ for more details.

For all information related to the Virtual Dialogue please contact Ms. Ngô Thị Tố Nhiên – email: nhien.ngo@vietse.vn