New power development plan offers opportunity for offshore wind power
Vietnam's freshly approved power development plan for 2030 with a vision to 2050, known as PDP VIII, is expected to open up a new opportunity for offshore wind power development.
Under the new plan, approved by the Prime Minister on Monday, offshore wind power will be strongly developed together with other renewable energy sources like solar and onshore wind power to produce new output serving domestic consumption and exports.
Vietnam will accelerate the development of renewable energy sources such as wind power and solar power to produce new energy like hydrogen and blue ammonia for domestic consumption and export. Renewables, new energy must ensure high economic efficiency, becoming a new economic sector of the country, according to the plan.
By 2030, the country will maximize the technical potential of offshore wind power, about 600,000 megawatts, to produce electricity and new energies.
Offshore wind power serving domestic demand will reach about 6,000 megawatts by 2030, 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.
Offshore wind power capacity for new energy production is estimated at 15,000 megawatts by 2035 and about 240,000 megawatts by 2050.

A wind farm in the Mekong Delta province of Tra Vinh, southern Vietnam. Photo courtesy of Vietnam News Agency.
At the annual Vietnam Business Forum (VBF) in March, Gabor Fluit, chairman of the European Chamber of Commerce in Vietnam (Eurocham), stressed the need to have a clear roadmap for offshore wind development.
Fluit argued that marine spatial planning and environmental regulations for offshore wind need to be developed to allow favorable conditions for seabed leasing, however these can take time, therefore a hybrid approach should be considered to allow the first offshore wind projects to be initiated to meet 2030 PDP VIII targets.
Commercial feed-in-tariffs/alternative policy framework for offshore wind needs to be developed. Despite its crucial role in kickstarting the offshore wind industry, as demonstrated by substantial experience, no offshore wind project in Vietnam has received investment incentives from the FiT mechanism.
"The power purchase agreement (PPA) mechanisms historically in place in Vietnam are not fit for purpose in relation to offshore wind, as they are not functional in relation to curtailment, termination, and arbitration risks. To ensure investors can make financial close and project financing, this needs to be addressed," he said.
The government should seek to instigate the first 2-3 gigawatts (GW) of the 2030 target as pilot projects (or between 500MW-1GW) to provide a stable start for the offshore wind industry with appropriate legal processes to be implemented, according to the EuroCham chairman.
"The Marine Spatial Planning (MSP) needs to emphasize the possibility for co-existence of offshore wind and oil & gas projects, as well as the fisheries, tourism, and transportation industries.
"FiT with a capacity cap (approximately the first 5GW-7GW), instead of a time-based structure, is an important policy mechanism to balance kickstarting the industry and ensuring affordability," he noted.
EuroCham recommend that the government expeditiously finalizes regulations for offshore survey consenting, as well as reviewing and approving developers’ applications for offshore survey licenses to meet the goal of offshore wind power by 2030.
“We recommend a full revision of the PPA to consider the different requirements of the high capital intensive offshore wind industry to manage the issues that will likely prevent the high level of project financing requirements,” Fluit added.
The PDP VIII will ensure energy security for the fast-expanding country based on forecast annual GDP growth of 7% until 2030, the ministry said.
The plan says Vietnam needs $134.7 billion of funding to develop new power plants and grids between 2021 and 2030. The 2031-2050 period will require $399.2-523.1 billion of funding, with $364.4-511.2 billion for generation and $34.8-38.6 billion for transmission.
Among power generation sources, coal will account for 20.5% by 2030, down from almost 29% in 2020. Gas will make up 21.8% by 2030, up from 10.2% in 2020.
Renewable sources (including hydroelectricity, solar and wind power, and biomass) will account for 50.3% by 2030, but contributions from hydroelectricity alone will drop to 20% from 30% in 2020. PDP VIII also includes generating green energy for export, with a target of 5-10GW by 2030.
The ministry said that by 2030, half of office buildings and homes in the country will be powered by rooftop solar panels. However, this source will not be connected to the national grid.
Vietnam is seeking to reach carbon neutrality by 2050. The new plan says there will be no coal-fired plant construction after 2030, step by step mixing biomass, ammonia; prioritizing gas and gradually shifting to mixed fuel combustion towards complete combustion of hydrogen and ammonia in the long term.
Notably, there will not be new LNG-to-power projects after 2035.
Coal-fueled power will only account for 4.5% of the total capacity generated by 2050. And then coal will no longer be used for electricity production. Gas-fired power sources will increase to 40.3 GW by 2035 with no further developments after that. Gas power will be cut to 7% by 2050.
The PDP VIII expects renewable energy sources to generate up to 400 GW by 2050, equal to about 70% of total power generation capacity.
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