Six miles and beyond: Vietnam draft law sets offshore boundary

By Tri Duc
Sat, May 4, 2024 | 3:35 pm GMT+7

Wind power plants with all turbines located six nautical miles beyond the nation’s sea area will be deemed offshore, per draft amendments to the Law on Electricity.

Prepared by the Ministry of Industry and Trade, the draft says the seabed depth of offshore wind power projects will be determined later in line with survey results.

Under the proposed amendments, offshore wind power investors cannot make transfers of more than 49% of their project investment or capital contributions. Authorities that have granted in-principle approval for projects will be responsible for approving project transfers, too.

A recent government notification has suggested that the Law on Investment should also carry amendments related to the approval of offshore wind power projects.

It says, in particular, that the Prime Minister should be tasked with approving offshore wind power projects in areas not belonging to a particular locality or belonging to two localities or more, as well as in areas that fall under jurisdiction of the Prime Minister.

Tran Viet Hoa, head of the Electricity Regulatory Authority of Vietnam under the Ministry of Industry and Trade, speaks at a conference on draft amendments to the Law on Electricity in Hanoi, May 3-4, 2024. Photo courtesy of the trade ministry.

Tran Viet Hoa, head of the Electricity Regulatory Authority of Vietnam under the Ministry of Industry and Trade, speaks at a conference on draft amendments to the Law on Electricity in Hanoi, May 3-4, 2024. Photo courtesy of the trade ministry.

Commenting on the draft at a Friday seminar hosted by state utility Vietnam Electricity (EVN) and the trade ministry, Denmark’s Copenhagen Infrastructure Partners (CIP) said the six-nautical-mile term was feasible and sufficient.

CIP representative Nguyen Thanh Tra said the draft provision on seabed depth was not necessary, given difficulties in calculating and costly investments made in offshore projects.

CIP has proposed to invest in a $10.5 billion offshore wind power project off the south-central province of Binh Thuan.

Tran Viet Hoa, head of the Electricity Regulatory Authority of Vietnam, under the trade ministry, also said the six nautical mile provision was feasible. But the one regarding seabed depth was necessary because Vietnam’s sea area has differences that will result in different investment costs, he added.

On the draft provision on project transfer, participants agreed that it would fortify investors’ commitment to the projects. However, they proposed that the restrictions should be applied during the project’s construction, not operational phases.

Project investors are normally committed during projects’ construction and investment phases, but they are not necessarily competent operators, they said.

“No real offshore wind projects are likely to be built in Vietnam until the end of 2024-2028 period,” the Global Wind Energy Council (GWEC) has said. In its Global Wind Report 2024, the council says that “a route-to-market strategy for offshore wind development is still to materialize.”

It points out that in 2023, new onshore wind energy installations in the country with a combined capacity of 823 MW raised the total to 3,924 MW. The figure for offshore wind power remains zero, it notes.

Under Vietnam's Power Development Plan VIII (PDP VIII) approved in May 2023, the country planned to increase offshore wind power capacity to 6 GW by 2030, envisaging this to increase to 70-91.5 GW by 2050, accounting for 4% and 14.3-16% of the total energy mix, respectively.

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