Lack of policies blows foreign wind power investors out of Vietnam: PTSC executive

By Tri Duc
Thu, June 15, 2023 | 3:17 pm GMT+7

A lack of detailed policies and guidelines for wind energy investment in Vietnam is making foreign investors turn to other markets, said Le Manh Cuong, CEO of Petrovietnam Technical Services Corp (PTSC).

Le Manh Cuong, CEO of PTSC - a subsidiary of state-owned Petrovietnam, speaks at the Industry 4.0 Summit 2023 in Hanoi on June 14, 2023. Photo courtesy of VietnamBiz news website.

Le Manh Cuong, CEO of PTSC - a subsidiary of state-owned Petrovietnam, speaks at the Industry 4.0 Summit 2023 in Hanoi on June 14, 2023. Photo courtesy of VietnamBiz news website.

Cuong told the Industry 4.0 Summit 2023 in Hanoi on Wednesday that Vietnam has a massive source of wind power but its investment capacity and capital sources are limited.

The executive gave an example that Denmark’s wind power giant Orsted has left the Vietnamese market after finding it less attractive than other markets. He added that Orsted still sees the potential in Vietnam for wind energy and as a Southeast Asian hub for wind energy supply chains.

He highlighted global wind power investors had established offices in Vietnam as soon as the country announced its initial related policy. However, as detailed guidelines have not been issued and clear, many projects were paused during the survey phases. Another challenge was the long wait for the approval of the National Power Development Plan for 2021-2030, with a vision to 2050 (PDP VIII), which caused hesitation among foreign investors.

PTSC is a top-tier contractor for oil-gas and offshore projects in Vietnam. In May, it signed a contract to build offshore wind farm foundations for Orsted, becoming the first Vietnamese business to receive a mass order for offshore wind power equipment.

In November 2022, PTSC M&C, the mechanical and construction arm of PTSC, kicked off the construction of the offshore substations Hai Long 2 and Hai Long 3 at the 1,044-MW Hai Long Offshore Wind Project in the Taiwan Strait.

Vietnam boasts strong potential in offshore wind power and could add 2.2 GW of offshore wind power, mostly intertidal projects, by 2027, according to the Global Wind Energy Council's (GWEC) Global Wind Report 2023.

Vietnam’s PDP VIII, which was approved last month, features 6,000 MW of offshore wind power, accounting for 4% of the country's total power generation capacity. The figure is expected to increase to 70,000-91,500 megawatts by 2050, or 14-16% of the total.

Denmark’s Orsted has "paused market development activities in Vietnam", Per Mejnert Kristensen, its senior vice president and Asia-Pacific president, said at the wind power giant’s Capital Market Day event last Thursday. The executive disclosed the information while reviewing Orsted’s strategy in Asia-Pacific, noting that Vietnam is still "an important supplier market".

Orsted will bid selectively and deselect opportunities without sufficient values, as it had already deselected auctions in Massachusetts, Taiwan, and markets in France, Vietnam, he added.

In August 2022, Orsted and Vietnam’s T&T Group proposed two offshore wind projects of 5 GW in capacity off the coast of Ninh Thuan province. Development of the 3-GW Ninh Thuan 1 project was expected to commence between 2029 and 2033 in three stages, with 1 GW for each. The 2-GW Ninh Thuan 2 project would be developed between 2030 and 2037 in two stages, also with 1 GW each.

Sebastian Hald Buhl, Orsted’s country manager in Vietnam, said at a business dialog in September 2022 that the company expected to generate 2 GW from offshore wind power in Vietnam before 2030, spending $5.5 billion and creating 25,000 jobs. He added that a competitive mechanism for projects was needed in the market, so the government should come up with an effective bidding mechanism to support major offshore wind goals set for 2035.

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