A proposal to extend the mechanism on supporting wind power development

Current situation of wind power development in Vietnam:

The first wind power project in Vietnam is Tuy Phong one (in Tuy Phong district, Binh Thuan province), having been put into operation in 2009.

It is not like the solar power development, after more than 10 years of the first project operation, the wind power development in Vietnam could not achieve the expected results as the targets planned in Power Development Planning VII (PDP VII). The concrete situations at present are:

By early 2020, there are only nine wind power projects with a total capacity of 370 MW having been put into operation, with a total capacity of 370 MW (compared to 800 MW as the target in PDP VII by 2020).

There are dozens of wind power projects in the Central Region, Central Highlands and Mekong Delta prepared for investment with the goal of being put into operation before November 01, 2021, in accordance with the regulations of the Decision 39/2018/QD-TTg.

However, due to many objective and subjective reasons, these projects are facing many risks of capital and progress increase, difficult to be put into operation before the November 01, 2021.

The reasons of this situation are:

Firstly, although the price of wind power has been raised to the equivalent of US $ 8.5/kWh, but at this price, investors can obtain interest in cases: (1) the project developed in location with the good wind, (2) the investor can assess an appropriate loan source and (3) the investor can select the appropriate equipment. But it takes much time to converge all three factors

Secondly: it is much more complicated to construct a wind power project than a solar power one due to the need of super-length, super-weight machines for installing wind turbine towers. Constructing a wind power project usually takes from 12 to 24 months with many implicit risks.

Thirdly: operation and maintenance (O&M) of wind turbines is always difficult and expensive.

Fourthly: At the present time, the wind industry in the world is in the hot development stage, the manufacturing plants in China and Spain are closed because of the Covid-19 epidemic. Therefore, many Vietnamese investors could receive the wind turbines for one year after signing contract with a large deposit amount of money that leads to long progress of projects.

The wind power has many preeminent features as follows:

In comparison with the solar power, wind power is more effective due to higher capacity factor of 30 – 35% (for the off-shore projects the capacity factor can reach more than 45%) while for solar power only 20%. Wind power project can generate electricity both in the daytime and at night, and especially, today, there is the software for the exact wind forecast within one week useful for dispatching power system. Land use of wind power project is about 0.35 ha/MW in comparison with 1.2 ha/MW for solar power project.

With the above-mentioned characteristics, in order to promote wind power industry to develop adequately, make use of available natural resources for the economic development of the country, and contribute to environmental protection, the investors in Vietnam would like to propose the Prime Minister and MOIT to more pay attention and encourage wind power development by an immediate specific activity as considering to extend mechanism on supporting wind power development in Decision No 39/2018/QD-TTg from November 1, 2021 to December 31, 2022.

PV.