MoIT proposes investor selection for offshore wind power project

Renewable energy development is a trend

In the context of energy transition being an inevitable and irreversible trend, Vietnam has committed to achieve net-zero carbon emissions by 2050. While major domestic hydropower sources have been fully exploited, it is necessary to promote the development of renewable energy, especially offshore wind power projects.

Vietnam’s offshore wind power development is in line with the trend of energy development in the world

Specifically, the Power Development Planning (PDP) VIII sets the targets of offshore wind power capacity meeting domestic electricity demand to reach 6,000 MW by 2030, with a vision to reach from 70,000 MW to 91,500 MW by 2050.

To implement the planning synchronously and effectively, the Vietnamese Government has organized a number of meetings with relevant ministries and sectors to build a pilot project on developing offshore wind power, including assessments of difficulties and obstacles; proposals of policies and mechanisms; plans on selecting investors to pilot the project; authority and legal basis on implementing these projects effectively.

Thus, the MoIT said it is necessary to build a pilot project for offshore wind power development in Vietnam at this time.

PTSC’s underground cable installation for Tan Thuan wind power project - photo: PVN

Assignment to State economic corporations

As offshore wind power is a new field in Vietnam, there are still many difficulties and obstacles related to functions and tasks of many ministries and agencies; lack of mechanisms, policies and legal regulations, and database on the renewable energy. Therefore, MoIT believes that deploying offshore wind power projects requires careful research.

From these difficulties, the MoIT proposed three options for selecting investors. First, in case the Vietnam Oil and Gas Group (PVN) is selected, the MoIT believed that the PVN will have certain advantages to implement the project, such as items and works similar to those in offshore oil and gas projects, database availability, and human resources. However, the assignment of the project to PVN needs to be evaluated by the Party’s policy on PVN’s industry, profession, and business orientation.

Second, if the Vietnam Electricity (EVN) is chosen, the group will also have advantages based on its existing experience and capacity in managing and operating power plants and power transmission systems. However, this is a new field, so it has different requirements compared to traditional power projects.

In addition, the EVN as the project’s investor will not require negotiations on electricity prices because the group will then be electricity selling and buying units at the same time.

Third, regarding the plan to assign the project to the Ministry of National Defense, MoIT said it needs to be evaluated for compatibility with the Party’s policies, and also feasibility taking into account the capabilities of specific units under the ministry.

As for recommendations to assign the project to private investors, the MoIT said despite participation of the private sector in the electricity sector recently, most of their investments are in traditional wind and solar power projects which are not very large in scale. Due to the current legal barriers and the fact that offshore wind power is a new field, the MoIT supposes that it is not advisable to assign the project to private investors until all the assessments relating to defense, security, prices and legal issues are fully completed.