Under the eighth national power development plan for 2021-2030 (Plan 8) which was approved in May 2023, Vietnam strives to have 6,000MW of offshore wind power capacity by 2030. However, to date, no offshore wind power project has been licensed.
Many investors have conducted research to seek opportunities to develop offshore wind power, but no headway has been made. Some of them have left as they felt discouraged.
At the recent 2024 Green Economy Forum and Exhibition, EuroCham’s chair Bruno Jaspaert noted that nothing has changed except Plan 8 approval and the first steps taken to establish an offshore wind power market.
“European enterprises face difficulties deploying their first offshore wind power projects in Vietnam. In fact, projects just remain on paper, while nothing has been made in reality,” he said.
Plan 8 shows Vietnam’s great ambitions in developing green energy, and the country needs to take prompt action to reach these ambitious goals.
“The licensing must be ready and all obstacles need to be solved within the next six months to be able to reach the goals,” he said.
The Ministry of Industry and Trade (MOIT), in its latest report, cited international practice as pointing out that in the first period of developing new types of energy, the investment rate and electricity production cost are always higher than that of traditional energy sources.
In order to ensure the feasibility of the new energy investment model, the draft law compiled by MOIT sets policies on preferences and support offered to every type of renewable energy to ensure reasonable power development that fits socio-economic conditions in each development period.
The ministry believes there should be investment incentives and groundbreaking mechanisms for offshore wind power development.
One of the preferences suggested by MOIT is to have the electricity buyer (Electricity of Vietnam, or EVN) and sellers negotiate an agreement on the minimum electricity output EVN will purchase from every project.
In addition, MOIT suggested the exemption of sea area rentals and land use fees from the time of the investment and construction period to the time that offshore wind power farms can generate electricity; a preferential corporate income tax rate; and policies on support for self-produced and self-consuming electricity systems using renewable energy.
MOIT emphasized that offshore wind power is a new field for Vietnam and there have been no projects in this field. The exploitation and use of offshore wind power are covered by many laws and put under the management of different ministries and branches.
The beginning
Mark Hutchinson from GWEC (the Global Wind Energy Council) complimented the draft law on electricity, saying that it was progressive.
He applauded the idea of Vietnam’s small and medium sized enterprises cooperating with experienced international partners to develop offshore wind power, which is similar to what is happening in Vietnam’s oil and gas sector.
He suggested that the government allow SOEs to cooperate with international developers, and that the National Assembly ratify the Law on Electricity at the ongoing session.
“International partners can provide professional knowledge, experience, technological capability, capital access capability and supply chains, while Vietnamese businesses have political and cultural understanding, as well as the capability of building a domestic supply chain,” he said.
EuroCham chair Jaspaert emphasized the importance of SOEs (state owned enterprises) in developing the first offshore wind power projects in Vietnam.
He went on to suggest that Vietnam can consider experiences from Europe. Denmark, for example, accelerated the development of offshore wind power, and the UK has lessened its reliance on fossil fuels.
“I believe there are many examples from Europe to which Vietnam can refer to realize that it needs to promptly build a clear and transparent legal framework, and policies to support offshore wind power,” he said.
He suggested that the participation of foreign developers in offshore wind power projects in Vietnam will not only bring technological support but also huge capital that will ensure implementation in accordance with international standards.
PetroVietnam Technical Services Corporation (PTSC) has suggested that Vietnam coukf consider the development model of Taiwan (China), under which offshore wind power would develop in three phases. The first phase is for pilot projects. The second phase is for development with the state’s support. The third phase is competitive market development.
