The Ministry of Industry and Trade will pass the draft of a long-awaited incentive policy for wind power to the Government this month, according to the ministry’s Department of Energy. Le Tan Phong, vice director of the department, told that the ministry had already completed consultations with relevant ministries and agencies over the draft policy.
Statistics from the ministry show there are a total of 21 wind farm projects in several provinces such as Lam Dong, Binh Thuan and Ninh Thuan. Wind turbines is an alternative source of energy that is renewable and environmentally friendly but the Government has yet to issue any incentives for this sector.
The development of wind energy has been facing difficulties such as unattractive pricing of electricity from wind farms, high startup investment cost and long recovery of investment capital. The draft incentive policy for wind farm plants focuses on matters like power purchase, infrastructure support and wind power price subsidies.
An another official of the energy department, Do Duc Quan, said the Ministry of Industry and Trade would seek Government approval for a wind power selling price of around eight U.S. cents per kilowatt-hour. Seven cents will be paid by Electricity of Vietnam Group (EVN) and the remaining one cent subsidized by the State budget, Quan said.
Nguyen Boi Khue, chairman of the Binh Thuan Wind Power Association, told that Binh Thuan Province had approved a total of 12 wind farm projects. But many investors have found it hard to move forward with their wind power projects due to the unattractive price offered by the country’s sole electricity distributor, EVN.
Khue said Fuhrlaender Vietnam Wind Power Joint Stock Company in the province was operating 10 wind turbines with a combined capacity of 30 MW and that their electricity output was being supplied to the national grid. However, EVN is buying electricity from the company at a lifetime price of a mere six cents per kilowatt hour.
With an average investment cost of US$2.2 million per megawatt, Khue said wind power projects could be profitable only if the price was at least eight cents. In China and some other countries, the price of wind energy is hovering around eight cents, he noted.