In the recently held investment promotion conference, the People’s Committee of Binh Thuan province had awarded decisions to and received investment commitments from nearly 30 domestic and foreign enterprises in potential areas such as clean energy, tourism and high – tech agriculture. The initial investment capital is estimated at more than VND 126,000 billion.
Of which, renewable energy projects represent a dominant proportion and attract an investment capital of around VND 94,150 billion, locating mainly in Tuy Phong and Ham Tan districts. Outstanding projects among these projects are solar photovoltaic project to be invested by Vietnam Electricity, and Son My 1 gas fired power project of a joint – venture between French and Japanese investors, with the total investment capital of VND 49,500 billion (equivalent to USD 2.2 billion).
Binh Thuan province has a large potential for clean energy development – Photo: Huyen Thuong
Mr. Nguyễn Ngọc Hai, Chairman of People’s Committee of Binh Thuan province stated that the investment attraction structure of the province has experienced an noticeable shift to energy development towards the goal that the province would become a great energy centre of the country by the year 2020 with the total capacity of more than 12,000 MW. The capacity of wind power projects merely by the year 2030 will achieve 2,500 MW.
In Mr. Hai’s opinion, because the annual precipitation level is low, the number of sunshine hours in a year is ideal and most of the surface has average thermal radiation intensity of about 5 kWh per square meter, this province has an advantage for solar energy development. Hydropower potential is abundant thanks to the average annual water volume of approximately 5.4 billion m3 which is created by 7 main river basins and 30 large lakes.
However, according to the assessment of Binh Thuan Wind Power Association, despite such a very large potential, the target that wind and solar power plants will contribute 800 MW in total by the year 2020 will be infeasible.
Mr. Bui Van Thinh, Chairman of the Association considers that granting investment licenses for wind power projects is normally time consuming. After licenses are granted, wind power investors will cope with challenges in access to financing resources (loans), especially concessional credits of the Government. Among three officially operating projects, one is under distraint, one undergoes project owner change and the latest operating project has to economize to pay for its operation costs, without re-investment costs the project’s capital recovery will be very difficult.
Speaking at the Conference, Prime Minister Nguyen Xuan Phuc stated that an increase in wind power feed in tariff will be considered in the coming time in order to support enterprises and attract investors to pour more funds in clean energy development in Binh Thuan province in conformity with the policy of the Central Committee.
The head of the Government shared that since the decision on incentive mechanisms for solar energy project development in Vietnam was signed, the feed in tariff at the connection point increases to US cent 9.35 per kWh, tens of investors have come to Binh Thuan province to explore solar energy development opportunities. This seems to be an optimistic signal for the power sector, however enterprises should set up long term and sustainable business strategies, “to practice what one preaches”, to avoid the situation of noisily signing but not executing.