Norwegian giant Equinor cancels Vietnam offshore wind plans

Norway's energy heavyweight Equinor has halted plans to develop offshore wind energy in Vietnam, according to Reuters, following Danish giant Orsted pausing market development activities in the country.

"We have decided to discontinue our business development in Vietnam and to close our office in Hanoi," Reuters quoted Equinor spokesperson Magnus Frantzen Eidsvold as saying.

It is the first time Equinor has closed an international office focused on offshore wind development. The company has previously exited more than a dozen countries where it had oil and gas activities over the last few years to focus on renewables and low-carbon systems, according to the newswire service.

"The offshore wind sector has been facing significant headwinds lately and we need to be disciplined in our approach," Eidsvold added.

Equinor opened a representative office in Hanoi in May 2022.

Vietnam possesses one of the best wind resources in Asia as described by Equinor's website, but delays in the introduction of complete legal frameworks and planning have disheartened some big investors.

Previously, in June last year, Orsted's senior vice president and Asia-Pacific president Per Mejnert Kristensen had stated that this Danish wind power giant "paused market development activities in Vietnam".

Kristensen told a Capital Market Day event of the company: "Orsted will bid selectively and deselect opportunities without sufficient values, as it had already deselected auctions in Massachusetts, Taiwan, and markets in France, Vietnam."

At a meeting in late July, Deputy Minister of Industry and Trade Nguyen Hoang Long highlighted that the main difficulties and obstacles in developing offshore wind power in Vietnam were related to planning, investment policy and investor selection; market access conditions for foreign investors; and investment in the form of public-private partnership (PPP).

He said other challenges included granting of construction permits; maritime law; identifying wind resources as public property; issues related to security, national defense and national sovereignty; electricity prices; credit; standards for equipment, construction and fire safety.

Long also said his ministry was working with Vietnam's state-owned giants Vietnam Electricity (EVN) and Petrovietnam to speed up preparations for implementing two pilot projects.

The Global Wind Energy Council (GWEC) says in its latest report released in mid this month that Vietnam has not initiated any true offshore wind projects and has only developed intertidal wind projects situated in close proximity to the shore; thus the target of installing 6 GW of offshore wind capacity by 2030 under its latest power development plan (PDP VIII) presents considerable challenges.

Considering that the regulatory framework to support offshore wind development under PDP VIII is still underdeveloped, as well as the six-eight-year project development lead time, GWEC Market Intelligence believes that no real offshore wind development will take place until route-to-market policies and potentially new law(s) are in place. GWEC expects Vietnam to miss its 2030 offshore wind target.

Vietnam’s Ministry of Industry and Trade in early August expressed support to a $4.6 billion offshore wind power project in the central province of Binh Dinh, proposed by Germany-based wind energy developer PNE AG.

Meanwhile, Yoshiaki Yokota, managing executive officer and CEO for Energy & Infrastructure Solution Group at Marubeni, said at a mid August meeting with Deputy Minister Nguyen Hoang Long that this Japanese giant plans to invest more in Vietnam, including solar energy and offshore wind power.

The industry ministry is drafting a pilot scheme that allows the participation of state-owned Vietnamese enterprises in offshore wind power development.