The low selling prices that the government set for wind power cannot encourage the investment in the renewable power sector.

Wind energy lacks momentum in Vietnam

Despite the Government’s push to develop wind power, Vietnam has only three wind farms that use this alternative source of energy, as the country lacks experts in the field and prices remain low.

“With a 3,000 km-long coastline, Viet Nam has an overwhelming advantage for the development of wind power compared with other countries in Southeast Asia,” said Bui Van Thinh.

“The current wind power buying price (set by the Government) of US$7.8 cents, which includes 1 cent subsidised by the Government, is the lowest price for this source of energy in the world,” said Bui Van Thinh, vice chairman of the Binh Thuan Wind Energy Association in the central province of Binh Thuan.

Thinh spoke on April 17 at a workshop on wind power development held in HCM City.

The low prices paid by Electricity of Viet Nam, the sole buyer of electrical power sources in the country, is the biggest challenge for the industry, besides high production costs, lack of financial resources, a shortage of skilled engineers and an underdeveloped support industry, Thinh said.

“With a 3,000 km-long coastline, Viet Nam has an overwhelming advantage for the development of wind power compared with other countries in Southeast Asia,” he said.

To meet its economic development, the country is in dire need of more energy sources as it seeks to depend less on fossil fuels. In addition, there are fewer sites for new hydropower plants, Thinh said.

The Government’s renewable-energy development plan targets wind power capacity of 1,000MW in 2020 and 6,200MW in 2030, he said.

Policies on price subsidies, taxes and lending incentives for wind power projects have been created, but some investors remain skeptical.

A director of a Ha Noi-based company, who has an investment license to build a wind power project in Binh Thuan Province, said he had not even begun the project because Government support policies had not met investors’ expectations.

“Investors would bravely carry out their projects if the buying price for wind power was more than 10 cents,” he said.

Dr Pushkala Lakshmi Ratan, regional vice president of renewable energy and industry services for TUV SUD Asia Pacific, said that global prices for renewable energy were almost always higher than conventional power because the starting capital for wind farms was expensive.

The governments of many countries have provided incentives to encourage the development of this kind of green energy, she said.

Sathish Kumar Somuraj, general director of TUV SUD Viet Nam, said, “Many governments around the world are reducing carbon emissions by turning to wind power as a key component of their clean energy mix. Viet Nam is doing the same.”

At the workshop, TUV SUD signed a Memorandum of Understanding with the association in which it will offer technical support for the association and its members’ wind power projects in Viet Nam.

The two parties have also agreed to organise public workshops for Vietnamese wind-power related businesses.

The objectives of this partnership are to develop Viet Nam’s nascent wind power industry and further reduce the country’s dependency on conventional energy sources, he said.

With its experience, TUV SUD can support the wind power industry in Viet Nam to achieve sustainable growth and minimize risks for the industry to ensure that the project is gaining maximum returns with minimum risks.

Binh Thuan, the national wind power leader, has set a target to generate about 700 MW of wind power by 2020, and 2,500 MW by 2030, Thinh said.

Companies have registered to invest in 15 wind power projects, with a total capacity of 1,182 MW in the province, he said.