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Updated June 22, 2020

The Prime Minister of Vietnam issued Document No. 693 in June, mulling over extending the deadline for current Feed-in-tariff (FIT) for wind projects to allow more time for the construction of wind projects behind schedule or failed to secure finance, thereby boosting the sector. 

The Document also directs the Ministry of Industry and Trade (MOIT) to accelerate the process of approval for wind projects to avoid the risk of power shortage caused by delays in the construction of large-scale coal power plants.

The current FIT rate in Vietnam is US$0.085/kWh for onshore and US$0.098/kWh for offshore wind projects. The FIT is expected to be extended from November 2021 to December 2023. An auction system similar to that of solar power may be implemented in Vietnam after the proposed 2023 deadline.

Developing offshore wind power is one of the Vietnamese government’s main efforts toward a sustainable marine economy. The guideline released in March has listed Binh Thuan, Bac Lieu and Ca Mau provinces as potential areas for offshore wind development. 

In addition, a report conducted by the Danish Energy Agency (DEA) and the Vietnamese Electricity and Renewable Authority stated that Vietnam has potential for 160 GW of offshore wind. However, the lack of policy clarity and inadequate infrastructure are hindering the sector’s development.

Although the Vietnamese government has developed a 10-year power development plan that aims to boost the clean energy sector and increase renewables in its energy mix to 20%, thereby lessening the country dependence on fossil fuels, there is no practical approach regarding implementation.

Weak power grid capacity is another obstacle for Vietnam’s renewable growth. Liming Qiao, the Asia Director of the Global Wind Energy Council, said that  improvement in infrastructure systems supporting the grid is needed to accelerate renewables deployment. 

Vietnam currently has 54 GW of electricity generation capacity and the figure is expected to increase to 130 GW in the coming decade, according to the orientation of the National Energy Development Strategy of Vietnam issued in February. Offshore wind energy can help plug that gap if more clarity is provided for developers.

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