The Ministry of Industry and Trade will lead a multi-agency task force to develop a state funded pilot project for surveying and selecting investors for offshore wind power projects, aiming to accelerate exploitation of this abundant energy.
Deputy Prime Minister Tran Hong Ha instructed the task force’s establishment at a Thursday meeting held to discuss removal of bottlenecks for offshore wind power and gas-powered plant projects.
The task force will comprise representatives of the Ministries of Natural Resources and Environment, National Defense, Public Security, Planning and Investment, Agriculture and Rural Development, and Transport.
Under the National Power Development Plan VIII (PDP8) approved last May, Vietnam aims to generate 6,000 megawatts (MW) of offshore wind power by 2030, or more if technology allows and electricity prices and transmission costs become reasonable.
However, no project has been approved or assigned to an investor so far despite strong interest shown by several foreign firms.
Explaining some of the roadblocks, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan said there was a lack of official regulations on allowing organizations and individuals to use non-budget funds to survey maritime areas.
Offshore wind power projects also face bottlenecks in assigning maritime areas to foreign investors; bidding and investor selection; and resolving potential conflicts between marine activities and national security concerns.
Deputy Minister of Natural Resources and Environment Tran Quy Kien suggested allowing state-owned energy giants such as Vietnam Electricity (EVN) and Petrovietnam to study and quantify the nation’s offshore wind potential.
The task force will also work out measures to speed up gas-to-power projects, with particular focus on relevant legal issues.
Under PDP8, Vietnam will develop new gas-to-power capacity of 30,420 MW by 2030, two-thirds of which will come from liquified natural gas (LNG).
However, numerous obstacles exist in the development of gas-fired power, including a lack of legal basis to negotiate a power purchase agreement (PPA) that entails a commitment to long-term power purchases and a pricing mechanism for LNG-to-power projects.
It has been seen that it usually takes seven to eight years to develop an entire gas-to-power project; while the time needed for an offshore wind power project is six to eight years. Therefore, time is running out to meet the goals set in PDP8, the meeting heard.
Minister of Industry and Trade Nguyen Hong Dien stressed the need to build new mechanisms and policies, not just pilot schemes, given the lack of clear regulations for these two energy sources.
Deputy PM Ha backed the idea and asked relevant ministries to review overall investment procedures for gas and offshore wind power projects and propose a plan to expedite their development.
In an interview with The Investor, Jacques-Etienne Michel, country managing director and country representative Equinor Vietnam, suggested that Vietnam should implement PDP8 and scale up offshore wind power production as soon as possible. A green hydrogen value chain will require a large amount of renewable power production that offshore wind can provide, he said.
Equinor stands ready to support Vietnamese authorities through the latest memorandum of understanding it has signed with Petrovietnam, which includes corporate level cooperation on low carbon solutions, he said.