Vietnam PM urges faster approval of wind projects

This is urged for localities with potential for wind power development.

The prime minister of Vietnam issued a document requesting the Ministry of Industry and Trade (MOIT) to speed up its approval of wind energy projects into the master plan, in response to the possibility of power shortage as large coal plants won’t start operations until 2023.

This is particularly directed to localities with potential and advantage for wind power development and those that can implement it quickly to supplement the power supply for the country, but only have a few such projects by far.

According to a blog from Duane Morris Vietnam, this can help open up more rooms for investors looking to participate in this sector, and allow current investors ample time to get key licenses and start the construction and commissioning process required for their projects.

“The promotion of wind power sources is an effective solution to counter power shortage issues because it can take advantage of the free, limitless wind natural resource without relying on imported fuels from abroad and is eco-friendly,” said Duane Morris partner Oliver Massmann.

The document also urges to consider extending the fixed price mechanism for wind power projects until 31 December 2023. Currently, the FiT rate is at $0.085/kWh for onshore projects and $0.098/kWh for offshore projects.

Massman found this extension to be essential, as projects waiting to be included in the plan are unlikely to begin commercial operation before November 2021 due to the long time needed to prepare and construct these projects.

In particular, investors are required to carry out wind measurement for at least 12 months for feasibility study reports. Wind turbines are also mostly imported from abroad, which costs investors extra time, especially when there is an unexpected delay of equipment delivery.

Further, wind power projects included in the electricity development planning in the Southwestern provinces are mostly offshore or near-the-shore projects using technology and techniques different from those implemented for onshore turbines, hence requiring longer project preparation time.

“Not to mention, the regulations on determining sea borders, licensing for usage of the sea area are quite complicated, thus further increasing project schedule time and costs associated with offshore projects,” Massman added.

The document also requests MOIT to prepare the formulation of the National Electricity Development Planning in the 2021-2030 period, with a vision to 2045 to submit to the Prime Minister for approval before 31 October.