Here’s why Vietnam is an investment hotspot in wind power

It is seen to bring over 400% capacity growth in wind power in the next decade.

Vietnam is amongst the markets to watch in the wind power sector, Fitch Solutions reported as it is projected to increase its capacity by over 400% in the next decade.

Fitch Solutions forecast the wind power capacity in Vietnam will increase from less than 3 gigawatts (GW) end 2021 to just under 13GW by 2030.

“This growth is supported by project momentum across 2021, despite our initial expectations for supply chain disruptions,” the report read in part.

Citing state-owned Vietnam Electricity (EVN), Fitch noted there are more than 106 wind power projects in the country with a combined capacity of over 5.6GW that have registered to start commercial operations before 1 November 2021.

“We note that this is as the Feed-in Tariffs for wind projects expired after this date, and as such developers rushed to complete the projects to attain more favourable power purchase rates.”

On top of this, Vietnam eyes setting a new goal of developing 3-5GW of offshore wind power by 2030 and 21GW of offshore wind by 2045. This will be backed by an offshore wind power purchase mechanism that will likely stimulate the market.

This also comes as wind energy developer Ørsted announced plans to develop a 3.9GW offshore wind capacity, estimated to cost the company some US$13b in investments. The project included the use of turbines with a 20-megawatt capacity.

Fitch added the offshore sector in Vietnam saw more activity after the provincial government of Soc Trang granted Mainstream Renewable Power a certificate to invest in the first phase of the 1.4GW Phu Cuong Soc Trang offshore wind project.

Mainstream (70%) and the Phu Cuong Group (30%) will co-develop the initial 200MW phase and the subsequent 1.2GW of capacity in later phases.

EVN, meanwhile, will purchase electricity from the facility under a power purchase agreement. Financial close on the project is expected in 2022, with commissioning due in 2023, Fitch noted.