Wind Power in Vietnam Attracts the Attention of Foreign Investors

Tra Vinh People’s Committee has approved the policy for three investors to implement the Hiep Thanh wind power plant project in the province with a total investment of nearly 3,370 billion VND; of which 20% is contributed by investors, the rest is loan from bank Landesbank Baden-Wurttembrg-LBBW, Germany. It shows that Vietnam wind power sector is attracting attention of foreign investors.

The Hiep Thanh wind power plant project will be built on a total area of 2,747 ha in the coastal alluvial land of Hiep Thanh commune, Duyen Hai town (Tra Vinh province) with the design capacity of 78MW, with 18 – 19 wind turbine columns.

Investors implementing the project include Ecotech Vietnam Renewable Energy Joint Stock Company (based in Hai Ba Trung District, Hanoi); Janakuasa Pte LTD (Singapore) and Mr Lam Minh (Ba Dinh District, Hanoi). Investors have established Ecotech Tra Vinh Renewable Energy JSC to carry out the project. The duration of the project is 49 years.

According to General Director of Tra Vinh Ecotech Renewable Energy Joint Stock Company, the project was included in the Power Development Plan for Tra Vinh province in the period 2016 – 2025, with a view to 2035, which was approved by the Ministry of Industry and Trade on May 19th 2016. Currently the project is implementing investment procedures with the aim of putting into operation in the first quarter of 2020.

Sharing about the wind power price, according to leader of Tra Vinh Ecotech Renewable Energy JSC, the price of wind power is currently approved by the Prime Minister under Decision 37/2011/QD-TTg on the mechanism to support the development of wind power projects in Vietnam and take effect from August 20th 2011 is 7.8 cents/kWh.

According to leader of Tra Vinh Ecotech Renewable Energy JSC, Vietnam is the most potential country in ASEAN in recent years and coming years.

However, with the electricity price of 7.8 cents/kWh in this project, it is difficult to arrange capital, but the company is willing to bet on the project because they believe in the development of the Vietnam economy and want to contribute to the development of power plants in Vietnam. Investors also believe that the Government of Vietnam will study and reconsider bring the price of wind power to a more harmonious level, ensuring equality between renewable energy sources.

Hiep Thanh wind power plant is the fourth wind power project which was granted investment policy in Tra Vinh province. Previously, Tra Vinh province has granted investment certificates for 3 wind power projects, with a total designed capacity of 192 MW, in Truong Long Hoa commune (Duyen Hai town) and Dong Hai commune (Duyen Hai district).

These projects are in the stage of implementing appraisal procedures, approving the basic design… to start the construction. These projects are also in the list of projects calling for investment of Tra Vinh province in the period 2016 – 2020.

According to Tra Vinh wind power development plan up to 2020, with a view to 2030, which was approved by the Ministry of Industry and Trade on December 4th 2015, Tra Vinh province has planned 6 wind power projects at 6 coastal mudflats of Duyen Hai district and Duyen Hai town; in which there are 3 plants in Truong Long Hoa commune, 2 plants in Hiep Thanh commune and 1 plant in Dong Hai commune.

By 2020, the total installed capacity is about 270MW, the corresponding wind power is 634 million kWh. By 2030, the installed capacity will be about 1,338 MW. Total investment for wind power grid connected projects by 2020 is about 14,313 billion VND.

The wind power development projects will bring many benefits to the socio-economic development of Tra Vinh province such as increasing the local budget from taxes, increasing the electricity supply to create jobs for local workers; create landscapes to attract tourists.

In order to implement Vietnam’s national energy development strategy up to 2020 with a vision to 2050 (promulgated together with Decision No. 1855/QD-TTg, December 27th 2007), Vietnam strives to increase the ratio of new and renewable energy sources to around 5% of primary commercial energy by 2020 and about 11% by 2050.

According to Decision No 1208/QD-TTg dated July 21st 2011 of the Prime Minister on the approval of the Power Plan VII will bring the total wind power capacity from current level to about 1,000 MW in 2020 and around 6,200 MW by 2030. Electricity produced from wind power accounts for 0.7% in 2020 to 2.4% in 2030.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

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Finland Poured 33 Million USD into Clean Energy Projects in Vietnam

Watrec Company has just started to invest in Vietnam with a clean energy project, investment capital of 30 million euros (over 33 million dollars) in Hanoi.

Specifically, the project is converting energy from waste with the processing capacity of the plant about 600 tons of waste per day. The project is a comprehensive solution for collecting urban solid waste, classifying and converting it into biogas, as well as other combustible materials to produce electricity. At present, Watrec is in the process of negotiating with partners to finalize the allocation of funds for the project.

Watrec is the leading biogas technology company in Finland, handling 315,000 tonnes of organic waste each year at its plant-building chain. The project in Hanoi aims to manage the mixed waste that has not been classified and treat urban solid waste.

According to FinPro’s representative, Vietnam has the potential to develop clean energy projects from urban waste and agricultural and forestry waste.

FinPro focuses on converting waste into energy and bioenergy in Vietnam for about 2 years. Therefore, FinPro understands the potentials and challenges in converting waste into energy in Vietnam.

In fact, in recent years, many Finnish companies have invested and implemented projects in this field in Vietnam and have made positive progress.

For example, Doranova has one of the largest projects with a landfill disposal facility worth 6m euros under construction in the outskirts of Ho Chi Minh City, aiming to convert 35,000 tonnes of waste into energy.

Nearly a year ago, Doranova is one of the Finnish companies to undertake a project to convert waste into energy in Binh Duong. Accordingly, this project will recover the gas from the landfill and treat, supply the biogas to the power plant with a capacity of 1.6 MW.

Regarding the investment and construction of clean energy projects, according to representative of Valmet, the leading company in Finland, Vietnam is Valmet’s investment priority. From the investment realm, deploying projects in this area, Valmet’s representatives made 3 recommendations. First, it is necessary to determine the feasibility of the project by identifying the source of input waste from the plant. The second is about the fee collected from the garbage carrier to the processing plant. Third, it is necessary to consider electricity price lists when selling to EVN.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

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Vietnam Promotes the Development of Wind Power

The very first wind power plants, one in Binh Thuan and one in Bac Lieu, can be considered a breakthrough to pave the way for the construction of Vietnam’s wind power industry, which is expected to be pillar of the future power source in Vietnam.

In the field of renewable energy, hydropower and wind power are considered clean power sources

In fact, hydropower has hidden dangers for communities. On the other hand, wind power is friendly and gentle to humans. We can consider hydropower as an old power source and the wind power is the young one. While hydropower has been playing a vital role in the power industry of many countries, wind power has only been noticed and invested for about 5 – 10 years.

With the wind power plants in Bac Lieu, Binh Thuan and Ninh Thuan, recently, Vietnam Prime Minister has agreed to invest in a wind power plant in Khai Long resort – Ca Mau.

Under the direction of the Government, the investment objective of the above project is to build a wind power plant, connecting to the national electricity system and sell electricity through power purchasing agreement with the Electricity of Vietnam (EVN), contributing to ensure national energy security.

The plant will be built in Khai Long Village, Dat Mui Commune, Ngoc Hien District, Ca Mau. The total installed capacity is 100 MW on an area of land and sea of approximately 2,165 hectares.

The project will be implemented in the period from 2016 to 2018.

According to the Ministry of Industry and Trade, Vietnam currently has nearly 50 registered wind power projects but only about 10% of which are under construction, of which 3 projects are producing commercial electricity, which are Tuy Phong wind power project (Binh Thuan) with capacity of 30 MW; Phu Quy island wind power project with capacity of 6 MW in Binh Thuan; Bac Lieu wind power project with capacity of 16.5 MW.

Most recently, Phu Lac wind power project (Binh Thuan) with capacity of 20 MW and the total investment of nearly 1,100 billion USD has been started construction in July 2015.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

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Potential of Vietnam Wind Power

Wind Energy business consultant in Vietnam

Located in the monsoon subtropical area with long coastline, Vietnam has fundamental advantages to develop wind energy. When comparing the average wind speed in the East Sea of Vietnam and the surrounding sea areas, the result showed that wind in the East Sea of Vietnam is fairly strong and seasonally change.

The World Bank (WB) conducted a detailed survey about wind power in Southeast Asia, including Vietnam. According to this study, among the four surveyed countries, Vietnam has the largest potential for wind power and better than the neighboring countries like Thailand, Laos and Cambodia.

Vietnam has 8.6% of the territory is rated as “good” and “very good” for the construction of large wind stations, while in Cambodia, Laos and Thailand, the numbers are 0.2%, 2.9% and 0.2% respectively. The total wind power potential of Vietnam is estimated to reach 513,360 MW, more than 200 times the capacity of Son La Hydropower Plant, and more than 10 times the total forecasting capacity of the power sector in 2020.

Vietnam has up to 41% rural areas that can develop small wind powers. Comparing this figure with the neighboring countries, the rural areas that can develop wind power in Cambodia, Laos and Thailand are 6%, 13% and 9% respectively. It is indeed a privilege for Vietnam.

In Vietnam, the areas that can develop wind power do not spread across the entire territory. With the influence of monsoon, the wind regime is also different in each area. If the northern of Hai Van Pass, the strong wind season coincides with the northeast wind season, in which the most potential areas are Quang Ninh, Quang Binh and Quang Tri. In the southern part of Hai Van Pass, the strong wind season coincides with the southwest wind season, in which the most potential areas are the Tay Nguyen area, the coastal provinces of the Mekong Delta and especially the coastal areas of Binh Thuan, Ninh Thuan.

According to research conducted by the World Bank, in the territory of Vietnam, the two most potential areas for wind energy development is Son Hai (Ninh Thuan) and sand hills at the height of 60 – 100 meters from the west of Ham Tien to Mui Ne (Binh Thuan). The advantages of these areas are high average velocity wind, less storm and stable wind trend. They are the favorable conditions for wind energy development. During the monsoon months, the proportion of south and southeast winds are up to 98% with an average speed of 6 – 7m/s. It means that we are able to build the wind stations with capacity of 3 to 3.5 MW.

In fact, people in Ninh Thuan have also created a number of homemade small wind generators for the purpose of lighting. Both these areas are sparsely populated with hot and dry weather. Moreover, this is the ethnic areas with special difficulties of Vietnam.

Although there are many advantages as mentioned above, but when mentioning wind energy, we need to note a number of unique features to be able to develop it in the most effective way.

The biggest disadvantage of wind energy is the dependence on weather condition and wind regime. Therefore, at the design stage, the wind regime, terrain and type of wind without turbulence flows which badly affect the transmitter should seriously be studied. Moreover, although wind power is becoming more popular but it cannot be used as the main energy. However, the possibility of the combination between wind power and storage hydropower will open up opportunities for Vietnam to develop energy in areas such as Tay Nguyen, which has advantages in both of these kind.

Another noted point is that the wind power stations will cause noise pollution during operation as well as disrupt the natural landscape and could affect the signal of the radio waves. Therefore, when constructing wind power stations, it is needed to calculate reasonable distance to residential areas and tourist resorts in order not to cause negative impacts.

In order to meet the goal of ambitious growth, in the medium term, Vietnam should continue to exploit the traditional energy sources. In the long term, Vietnam needs to develop strategy and roadmap for the development of new energy sources. In this strategy, the economic costs (including internal and external expenses on the environment and society) need to be analyzed carefully, taking into account new developments in technology, as well as reserves and price movements of alternative energy sources. In these new energy sources, wind power has emerged as a worthy choice and therefore need to be fully assessed.

Vietnam has many advantages for the development of wind energy. If Vietnam does not invest in research and development of wind power will be a huge waste because the risk of power shortage is always permanent, affecting economic growth and national competitiveness. Meanwhile, the current national strategy for power seems only interested in hydropower and nuclear power – the energy sources with huge initial investment and many hidden risks on both environment and society.

In the world, the development of wind power is a major trend, showing the highest growth rate compared with other energy sources. Unlike nuclear power which needs a complicated technical process and strict supervision, the construction and installation of wind power does not require such rigorous processes. With the experiences of successful development of wind power in India, China, Philippines and the geographical advantages of Vietnam, Vietnam can completely develop wind power and contributing to the overall development of the economy.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

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