Changes needed for Development on Wind Energy in Vietnam

Changes needed for Development on Wind Energy in Vietnam

For economic sustainable development combined with environmental protection, the Government of Vietnam has made significant steps in the formulation of policies on renewable energy development, which take advantages of favorable conditions for the production of wind energy.

Many policies have been initiated to support wind power project, including power price assistance from central budget; assistance to grid and off-grid connected wind power projects… focusing on wind power electricity development target to achieve the total wind power capacity from the current negligible level to around 800 MW by 2020 and around 6,000 MW by 2030, raising the rate of electricity from wind power accounted for 0.8% in 2020 to 2.1% in 2030.

Some financial policies for investment projects under the Clean Development Mechanism (price supporting mechanism) are issued. Moreover, the Government published independent mechanisms to support wind power projects on electricity price for grid-connected wind power projects, power purchase agreements for wind power projects.

Nonetheless, there are difficulties in the development of wind power projects in Vietnam that should not be ignored. The first thing is difficulty of legal framework. The system of legislation, mechanisms and policies for wind power development are not synchronized. New project must be granted by the Ministry of Industry and Trade to establish the supplementary planning procedures prior to implementation. Power purchase agreement with EVN will be required as the initial condition to obtain investment permission.

Moving toward the future of clean energy in Vietnam, the Government should focus on implementation of preferential treatment to wind energy projects to increase the competitiveness of this renewable energy. In addition, the Government should also collaborate with investors, and industry experts to continue to research the wind power potential in Vietnam, further attract investment and assistance from domestic and international organizations for the wind power projects. Further, it is in the meantime required to have synchronized policies, legislations with the establishment of government authority to execute wind power planning and management to remove unreasonable barriers.

The increase in purchasing price from EVN will be attracting more investment. It has been discussed on the increase of buying price from 7,8 US cent/kWh however the timeline for the increase has not yet been finalized.