Vietnam aims to increase its installed wind power capacity 30-fold to reach 6 gigawatts (GW) by 2030, Global Wind Energy Association (GWEC) said in a recent report.
By the end of 2018, the country had 228 megawatts (MW) of installed wind capacity.
According to the report, South East Asia Market Update June 2019 Insights on Vietnam, the rising population and greater energy demand forced Asian countries to use their own energy sources, including wind and solar.
"The first offshore wind farm in the Mekong Delta region [in southern Vietnam], the 99-megawatt (MW) Bac Lieu wind power project, first came online in 2013," the report said and added that since then, a growing industry appetite has arisen to develop offshore wind power in the country.
It is estimated that the technical potential for fixed and floating offshore wind in Vietnam is 309 GW.
According to the report, macroeconomic constraints and energy security have made the Vietnamese government reconsider the country’s reliance on imported coal.
"The Vietnamese government has committed to diversify the energy mix with 10% coming from renewables by 2030," the report underlined.
It also highlighted that current key challenges involve the permit process, obtaining financing, the ability to reach bankable Power Purchase Agreement (PPAs) and Engineering Procurement and Construction (EPC) capabilities to execute projects.
The report showed that developers and investors are leveraging current opportunities within the existing support system to quickly deploy wind energy to meet the growing energy demand in this region.
- Market conditions in Vietnam
According to the GWEC, the government is generally supportive of renewables, while developers and investors are active in the markets.
The country offers a feed-in tariff of up to $8.50 per kilowatt-hour (KWh) for onshore and $9.80 KWh for nearshore based on a 20-year PPA.
In addition, the country also puts no foreign ownership restrictions on renewable energy projects, and offers tax exemptions for the first four years for clean energy projects.
By Gokce Kucuk and Gulsen Cagatay