According to a report made by the Ministry of Industry and Trade, Vietnam has a big potential for wind energy development as a result of more than a 3,000 km long coastline. As planned, Vietnam will develop 800 MW of wind power as of the year 2020, which then will account for 0.8% of the total power generation output. It is targeted that 2000 MW and 6000 MW of wind power capacity will be added to the national power system until 2025 and 2030, respectively.
Mr. Chris Beaufait, Group President of Vestas Asia Pacific and China views that the electricity consumption demand in Vietnam has been currently growing at a relatively high rate at 10% per year. Wind power will be an energy resource that can assist Vietnam in undertaking energy security thanks to less reliance on imported fossil fuels and volatile characteristics of coal, gas markets, etc. Besides, wind power can help overcome some challenges that hydropower has been facing, relating to season driven climate changes, or environmental pollution problems caused by thermal power generation.
In accordance with Associate Professor and Doctor Bui Huy Phung, Institute of Energy Science of Vietnam, wind power and solar power prices in Vietnam are dramatically declining and no longer expensive as in the previous years and activities to develop these energy resources starts to be flourished. The Government has created favorable conditions for promoting development of these clean energy resources.
It is envisaged that until 2020-2025, the investment cost of wind power will be reduced to USD 1,500 per kW and the electricity price will drop off to US 7 cents per kWh.
Nevertheless, Associate Professor and Doctor Bui Huy Phung considers that the wind power price in the coming 5 – 10 years will certainly remain higher than other conventional power resources, therefore incentive policies to motivate development of this energy source are needed.
In line with the statistics of Vietnam Energy Association, it is estimated that about 1,300 family size wind power generators (with capacity ranging from 150 W to 200 W) have been installed and in operation in Vietnam currently, mainly in the coastal regions in the Centre and Da Nang southward. At the same time, wind power stations with quite big capacity sizes such as Phong Dien 1 in Binh Thuan province (30 MW), Bac Lieu (99.2 MW), Phu Lac (24 MW), Phu Quy (6 MW) will be put into operation, totaling approximately 160 MW.
Assessments of international organizations show that Vietnam possesses a large potential for wind power development, projected up to more than 500,000 MW, six times as much as the total installed capacity of the whole power system until 2020. However, despite the potential is promising, to turn the potential into concrete economic effectiveness will be a challenging and long journey.
The main obvious challenge is the feed in tariff of wind power which is yet to be satisfactory for securing investors’ benefits, the local supply chain of equipment, components and services is inadequate, etc. Consequently, attraction of investments in wind power development has met substantial impediments.
Mr. Chris Beaufait considers that Vietnam needs to continue establishing their legal regulation frameworks, streamlining and improving the effectiveness of organization schemes and management approaches in wind power area. In parallel, there should be further studies and revisions of incentive policies to support wind power development and feed in tariffs for wind power which should be regulated at different rates for in land and offshore projects so that these tariffs can be uniformly applied in all wind power projects in Vietnam, etc.
In addition, the Government should introduce motivation policies to encourage and support production and utilization of small size wind power generators for family uses. Small and medium enterprises should be able to manufacture small size wind power generators for family uses. These generators are not technologically complicated, so domestic enterprises can reach a localization rate of these products up to 80% in order to reduce production and installation costs. Small size wind power generators, “every little helps”, will contribute to the national energy security and a higher proportion of renewable energy utilization in the power generation mix in the coming time.