Vietnam wind power sector attractive to investors

With an increasing demand for electricity in Vietnam, the wind power construction sector has flourished, with local and foreign firms getting in on the action.

A top executive at Coteccons, one of the biggest realty firms in the country, told media the firm may invest in wind power construction due to the opportunities on offer.

Coteccons deputy director-general Phan Huu Duy Quoc said: “We are associated with a large consulting enterprise in the power industry to participate in the bidding as an EPC [engineering, procurement and construction] general contractor of wind power projects … In the future, we may consider investing in the field.”

Similar to Coteccons, realty firm Phat Dat is considering investing in wind power while construction firm Licogi 16 is awaiting government approval to implement four wind power projects in Gia Lai and Quang Tri provinces with its Japanese and German partners.

Licogi 16 said it was studying some offshore wind power projects for potential future investment.

The firm Power Construction 1 plans to finish three wind power projects of Lien Lap, Phong Huy and Phong Nguyen in Quang Tri province before October 31 as it continues to survey, research and develop new projects in other areas.

With its experience from the construction of large hydroelectric and irrigation projects, the firm Construction 47 also plans to expand its work into wind power in the near future while SCI E&C Co will execute the wind power projects Huong Phung 2&3, Gelex 1,2,3 and Huong Linh 7&8 in Quang Tri province.

Known as the leading foundation engineering and underground construction company in Vietnam, FECON Corp is also building six wind power plants across the country.

Quoc from Coteccons told local media: “The profit margin for civil construction is approximately five per cent, while infrastructure and wind power construction can make a higher profit.”

According to a report from Vietnam Electricity (EVN), as of March 22, there were about 4.4GW of wind power projects under construction while a remaining 6.2GW would be developed in 2022-2025, based on the draft Power Master Plan 8.

Lots of foreign investors have also been reported to be mulling an investment in Vietnamese wind power.

Less than a month after Trung Nam Group inaugurated the largest wind farm of Vietnam in Ninh Thuan, Hitachi SE’s renewable energy business expanded its market to Vietnam by signing a strategic cooperation agreement with the group, buying more than 35 per cent of the stake in the wind farm on May 14.

Seeing Trung Nam Group‘s 151.95 MW wind farm worth four trillion dong ($172.4 million) with an estimated output of 432,000,000 kWh per year, as a quality, long-term and effective project, the Japanese investor bought in as a way to further implement renewable energy projects in Vietnam.

This month, the Central Highlands province of Dak Lak granted in-principle investment approval to six foreign-funded wind power projects worth more than 10.08 trillion dong while the People’s Committee of Hau Giang province did the same thing for a 3.2 trillion dong wind power plant project from Hong Kong’s Envision Energy Co.

According to SSI Research, assuming electricity consumption growth of about 7.6-to-eight per cent in 2022-2025, there was still room to deploy a wind power project with a capacity of 6.2GW.

According to the World Bank’s assessment, Vietnam is the country with the largest wind power development potential among Laos, Thailand, Cambodia and Vietnam, with more than 39 per cent of Vietnam’s total area estimated to have an average annual wind speed per year greater than 6m/s at an altitude of 65m, equivalent to a capacity of 512GW.