Offshore wind power pilot projects to facilitate policy, mechanisms finetuning: Deputy PM

Vietnam will perfect related mechanisms, policies and regulations while piloting offshore wind power development, Deputy Prime Minister Tran Hong Ha said Friday.

He said at a meeting of concerned agencies that proposals for pilot offshore wind power, made some time ago, had received serious attention from the Government and Prime Minister Pham Minh Chinh.

"The pilot scheme must select specific projects, point out legal problems as also carry out research and studies of policies, investment procedures, financial issues, and technology transfer during implementation,” he said.

Ha also pointed out that problems can arise from a lack of coordination between ministries and agencies and not legal hindrances, as was often assumed.

Elaborating on this point, he said the problem in choosing locations for offshore wind power projects was not rooted in law but in the lack of a consensus between the Ministry of Transport (in charge of issues related to international sea routes) and the Ministry of National Defense (in defining areas where national defense and security are not affected).

The Ministry of Industry and Trade (MoIT) needs to carefully look into problems regarding investor selection, electricity export and participation of foreign investors in order to identify workable solutions.

"We must implement the scheme immediately, aim to formulate mechanisms and policies for different types of projects that serve domestic needs, export or green hydrogen production," said Ha.

The Deputy PM also assigned the MoIT to urgently complete the plan for pilot wind power projects and submit it soon to the Prime Minister for approval.

Deputy Minister of Industry and Trade Nguyen Hoang Long spoke at the meeting about the main difficulties and obstacles in developing offshore wind power. These 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 construction investment and 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 state-owned Vietnam Electricity (EVN) and state-run Petrovietnam to speed up preparations for implementing two pilot projects.

Proposal with 3 options

The MoIT had proposed earlier that two state-owned energy majors - EVN and Petrovietnam – and military-run entities pilot offshore wind power development, citing national security implications and other factors.

The ministry stressed the great potential for offshore wind power development in the country, estimated at 512 GW, adding that this source needed to be tapped to fulfil the country’s carbon-neutral commitment by 2050.

Under the National Power Development Plan VIII (PDP VIII) approved by the government in May 2023, the country aims to develop 6,000 MW of offshore wind by 2030 and 70,000-91,500 MW by 2050.

However, citing potential conflicts among government agencies and sectors related to maritime spaces, legal hurdles, the lack of a national wind map and the lack of a survey of sea depth, the ministry suggested “thorough and cautious” development of this energy source.

It recommended that, in the initial phase, state-owned enterprises (SOEs) take the lead, arguing that this would facilitate the fine tuning of regulations.

Foreign and Vietnamese private sector investors can join the industry after the pilot scheme was comprehensively assessed and the legal corridor perfected, it said.

For the pilot scheme, the ministry listed three options in line with directions given by Deputy PM Ha.

Option 1 envisages oil and gas giant Petrovietnam implementing the pilot scheme, since it enjoys several advantages in deploying offshore wind projects. However, this SOE is not allowed by the Politburo, the Communist Party's premier decision-making body, to do so.

Option 2 has state utility Vietnam Electricity (EVN) utilizing certain advantages in developing offshore wind power. It would not have to negotiate power purchasing agreements.

However, the ministry pointed out that EVN had no experience in exploiting this resource; therefore, feasibility inputs were needed from government agencies, the Commission for the Management of State Capital at Enterprise and EVN itself.

In option 3, military-run entities would join the scheme, but further assessments were needed regarding Party guidelines and the entities’ capacities, it said.

The Ministry of National Defense has rejected the third option, citing limited capacities and expertise. Ministry-related agencies can join certain components of the scheme, local media quoted the defense ministry as saying.