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GWEC calls on the Government of Vietnam to extend the FiT for wind power projects

GWEC calls on the Government of Vietnam to extend the FiT for wind power projects - 

On September 23, 2020, a coalition of the wind power industry led by the Global Wind Power Council (GWEC) sent a letter to call on the Government of Vietnam to extend FiT for the wind power projects.

According to GWEC's assessment, Vietnam is a fastest growing wind energy market in Southeast Asia, with a capacity of existing 500 MW and 4 GW expected to be developed from now to year 2025.

In two recent years, the Incentive FiT of Vietnam promoted the growth of the wind power industry and needs to be urgently extended to maintain interest of the investors and avoid a "regression" cycle for wind power sector facing a decline in investment status in 2020 and uncertainty about investment framework with a delay to extend FIT that obstructs cost decrease in the newly formed wind power market and repulses goal of Vietnam on a future with the clean, confident energy sources with the reasonable prices in the period of 2022-2023.

The interest of the investors in developing wind power projects in Vietnam is considerably slowed down in 2020 due to that an onshore wind power project needs two years for completing the construction, while FIT is only applicable to projects. Due to no clear plan about FIT from 2022 up, the investors have to face a lot of indefinites for committing investment in the new wind power projects

Mr. Ben Backwell, the Executive Director of the Global Wind Power Association said: “Vietnam has been recognized as a regional leader in clean energy in Southeast Asia and attracted commitments for investment from a number of world-class business in the field, so the Vietnamese government should avoid the slowing down investments in this field by extending FIT application to ensure the long term investments to be carried out for creating dozens of thousands of jobs with high skill and providing clean, competitive energy for the Vietnamese economy ”

In June 2020, the Prime Minister approved additionally wind power projects with a total capacity of 7 GW to the Power Development Planning VII (adjustment), but the most number among these projects could not be implemented due to no definition on FiT extension.

According to Mr. Mark Hutchinson, Chairman of the Southeast Asia Regional Working Group of the GWEC, Vietnam is enjoying advantage in scale and cost decrease in wind power field and must sustain this impetus if it likes to avoid “boom and regression” development cycle.

Due to slow down FiT extension, very few wind power projects could be connected to power system in 2022-2023 years”

A forecast that a number of wind power projects with a total capacity of 1.65 GW could be developed before current FiT expiration in November 2021”

Due to bottlenecks in the global wind power supply chain and less favorable CAPEX rate in areas for the new wind power projects, especially around the Mekong Delta, the issues investment issues for wind power projects in Vietnam will face a significant challenge if a transparent and satisfactory FiT plan will be not announced as soon as possible.

Up to now, the wind power market in Vietnam has been enjoyed benefits from more and more increasing domestic and foreign capital flows. The wind power projects with a total capacity of 4 GW expect to be installed by 2025 could provide up to 65,000 jobs and about $ 4 billion of the investment capital.

In order to realize this potential, the Government of Vietnam must act immediately to extend FiT application for wind power projects and avoid to prolong delay in investment and installation of clean energy projects in the coming years.

VER.

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