Vietnam ministry proposes state-owned enterprises pilot offshore wind development

Vietnam’s Ministry of Industry and Trade (MoIT) has proposed that two state-owned energy majors and military-run entities pilot offshore wind power development, citing national security implications and other factors.

In a report sent to the government last week, the ministry stresses the great potential for offshore wind power development in the country, estimated at 512 GW, adding that this source needs to be tapped to fulfill 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 has suggested “thorough and cautious” development of this energy source.

It has recommended that, in the initial phase, state-owned enterprises (SOEs) should take the lead, allowing the fine tuning of regulations.

Foreign and Vietnamese private sector investors can join the industry after the pilot scheme is comprehensively assessed and the legal corridor perfected.

For the pilot scheme, the ministry has listed three options in line with directions given by Deputy Prime Minister Tran Hong 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 has pointed out that EVN has no experience in exploiting this resource; therefore, feasibility inputs are needed from government agencies, the Commission for the Management of State Capital at Enterprise and EVN itself.

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

The Ministry of National Defense has rejected the third option, citing limited capacities and expertise. They can only join certain components of the scheme, local media reported.