Vietnam, which is already committed to sustainable energy growth as a solution to the nation’s growing energy demand, has decided to slow down the overly rapid development pace of the its wind power industry while a new national power plan for the next decade is being drafted.
The country’s Ministry of Industry and Trade, in its October 5 2020 instruction to provinces and cities nationwide, told them to temporarily stop accepting proposals for new wind power projects due to over-expansion fears for the sector. The move comes as the country seeks to boost the proportion of renewables and reduce the dependence on coal in its power mix.
The instruction, signed by Hoang Quoc Vuong, deputy minister of industry and trade, says from 2018 to the present, the ministry has received requests for the development of wind power projects, onshore and offshore, totalling 50,000 megawatts (MW).
Already, between this March and June, Vietnamese Prime Minister Nguyen Xuan Phuc approved three plans for an additional 7,000MW of wind power. The nation’s total planned wind power capacity until 2025 is predicted to be 11,800MW, with 4,800MW of that approved before January 1 2019 by authorities at different levels for investors eager to tap the preferential rates that feed-in tariffs (FITs) allow.
For wind power projects set to be in operation before November 1 2021, Vietnam’s current FITs are fixed at 8.5 US cents per kilowatt-hour for onshore and 9.8 US cents for offshore. It normally takes a wind power project two to three years from start to operation, however, the duration for the current FITs have only 13 months to go, much shorter than the time generally needed to bring a project online – another reason why the ministry put the brake on new project development.
Previously, the ministry had intended to propose that the government extend the FIT period until the end of 2023, to be followed by competition-based auctions. However, national state utility Vietnam Electricity feels it is better to not prolong the FIT period fearing the national power grid could be overloaded in terms of transmission capability.
Vietnam has so far seen power plants with a total capacity of nearly 80 gigawatts (GW) licensed to be built in the next decade, including 30GW generated from wind and solar power. Over the last two years, the country’s FITs have attracted a lot of investors, with the ministry getting proposals for up to 50GW of wind power since 2018.
On October 2, shortly before the ministry’s decision to put the brake on the power supply, the Vietnamese Kosy Urban Development and Renewable Energy Group started construction of its Kosy Bac Lieu wind farm in the southern coastal province of Bac Lieu.
The US$345 million project is building 45 wind turbines on a 14-hectare site with a capacity of more than 200MW. The first phase, with nine wind turbines, is set to join the national grid system by October 30 2021. The timeframes for the second and third phases have yet to be disclosed.
Just this week on October 12, Vietnam’s Trung Nam Group switched on its 450MW solar farm, the largest of its kind in the country, located in the central coastal province of Ninh Thuan. With the project’s completion, the private group’s total supply via the grid is 1.064MW from a combination of hydro, wind and solar power. In addition to the latest farm, the company also operates a large-scale wind and solar power plant in the province.
Ninh Thuan is also where Vietnam had earlier planned to build its first nuclear power plants. However, the plans were cancelled in 2016 because of safety concerns, leaving the country with no plans for nuclear power.
