As the COVID-19 pandemic widens overseas, many Asian countries now going through a second wave of outbreak and massive lockdowns continue to be in effect across South East Asia (SEA). Amid the dark clouds, GWEC Asia has not slowed down our policy efforts and have taken massive steps forwards in one of our priority markets: Vietnam.
Vietnam’s thriving wind energy market is living up to its potential, with clear policy support and targets that aim to include 800 MW of wind energy capacity in the country’s energy system by 2020, 2,000 MW by 2025 and at 6,000 MW by 2030. However, the current Feed-in-Tariff (FiT) is set to expire in November 2021, which means that April 2020 would be the cut-off date for financial closure in order to meet COD by the deadline.
Given the global supply chain disruptions and investors uncertainty due to COVID-19, it has narrowed the window within which developers could finish construction before the tight deadline. Uncertainty over what will happen post-November 2021 is drying up new business opportunities and leaving project developers and investors without a way forward to get their projects off the ground. What is certain as of now is that the more visibility the government provides, the more investment appetite there will be.
Vietnam’s MOIT submits proposal to extend wind power tariff policy to the central government
On 9 April, we were delighted to hear that Vietnam’s Ministry of Industry and Trade (MOIT) proposed to the Prime Minister’s office to extend the deadline for its wind FiT by two years, from the original cut-off date in November 2021 to the end of 2023. After 2023, the ministry proposed that wind power enter into a competitive bidding auction scheme.
Although it is now at the discretion of the country’s central government, we would like to take this opportunity to applaud MOIT for their openness and willingness to work with the private sector that offered the industry confidence. If approved, the extension will provide a clear roadmap for the Vietnam wind sector, allowing the industry to grow experience and establish a stronger local supply chain before moving into the auction to drive down the price of wind.
The transition to an auction scheme is a global trend that provides downward pressure on costs and also has added transparency benefits for better planning purposes. This move coincides with the Vietnamese government’s more ambitious target of a possible additional 5-9GW of their wind target between 2025-2030, to be introduced in the new PDP 8.
GWEC’s South East Asia Task Force has been in active dialogue with the MOIT over the past few weeks on extending the FiT extension, and are thrilled to see this result and greatly appreciate the MOIT’s openness to industry’s concerns. In our interactions, we also prepared a COVID-19 impact analysis to show the impact on the wind industry, which is undoubtedly a very significant reason for a FiT extension.
GWEC has set up a COVID-19 response hub with information and responses to the current pandemic
GWEC has set up the Wind Industry & COVID-19 Response Hub to provide the most comprehensive information on the pandemic’s impacts in the global wind sector. We are in close communication with national associations and industry to assess the extent of the impact and pave a way forward to ensure that the energy transition does not slow down during this crisis.
Including the wind industry in economic recovery plans will be hugely important to shift the energy transition into high gear, while also creating thousands of local jobs and stimulating investment to build a sustainable future for our society.
Much uncertainty and anxiety linger over the impact of the virus, but GWEC remains optimistic about the future of wind energy and its prominent role in transforming the global energy landscape. There is no turning back on the clean energy transition, and we are working hard to make sure that this crisis does not slow it down. Vietnam’s further ambition on wind developments in the new PDP 8 is a perfect showcase of the unstoppable and undeniable trend of global energy transition.
Vietnam Wind Power (5-6 November 2020) – New Dates but Same Ambition
The pandemic is also bringing changes to our daily work in GWEC Asia, as we must postpone our second event in Asia, Vietnam Wind Power, to 5-6 November 2020 at the same venue Pan Pacific Hanoi, Vietnam. However, we are happy to announce that we will hold Vietnam Wind Power Virtual on the original dates of 9-10June 2020 so you don’t miss out on all the huge potential that Vietnam’s wind market has to offer. Please find more details of VWP Virtual here.
At GWEC Asia, we are a strong believer that this crisis can be a catalyst for the change of wind power in the region to the global energy transition. In the meanwhile, stay safe and we look forward to having you with us at VWP Virtual on 9-10 June and VWP Conference on 5-6 November 2020!
Liming Qiao, Asia Director, GWEC