Price woes to set back wind power generation target in Vietnam

Bi Van Thnh, chairman of the Bnh Thun Wind Power Association, said the Ministry of Industry and Trade had sent a proposal to raise the regulated selling price of wind power to the government, but the decision, expected at the end of last year or beginning of this year, would be delayed.
Last year, the association asked the Ministry of Industry and Trade to raise the selling price of wind power to US$9.5-10 cents per kwh, up from $7.8 cents.
Vietnam has great potential for wind power, estimated at about 10,000 MW, according to research by the German International Cooperation Agency (GIZ).
Initially, the Government set a target of generating 1,000 MW of wind power by 2020, but later lowered it to 800 MW.
Only four wind power projects are operating in the country with a total capacity of 160 MW.
Meanwhile, total capacity of the proposed registered wind power projects has reached 5,700 MW.
Most of the investors postponed the projects because regulated prices were below production costs, Thnh said.
For example, Bn Tre Province licensed five wind-power projects with a total capacity of 150 MW, but investors have been waiting for the price to increase. 
Nineteen wind power projects were registered in the south-central province of Bnh Thun, but work on them has yet to begin, he said.
The regulated selling price of wind power in Vietnam is among the lowest in the world, only 7.8 cent per kWh (compared to Thailand with 20 cent per kWh, the Philippines with 29 cent per kWh, and Japan with 30 cent per kWh).
In addition, poor infrastructure such as seaports and roads are also a challenge for investors. 
Thnh said, however, that the wind power market was still attractive to foreign investors.
Bnh, who is also director of the Thun Bnh Wind Power Joint-Stock Company, said the company was upbeat about renewable energy as the industry was expected to flourish when the price increased.
After operating the first phase of the Ph Lc Wind Power plant with a capacity of 24 MW in Bnh Thun Province, the company now plans to increase the charter capital from 240 billion dongs ($10.54 million) to 450 billion dongs ($19.76 million) to develop new projects with an estimated total capacity of 510 MW of wind power and more than 570 MW of solar power.
“From now to 2030, we need more than $2 billion to develop wind power and solar power projects in Bnh Thun and Ninh Thun provinces and the Central Highlands region,” Thnh said. 
Moreover, to increase revenue for the company, the Ph Lc Wind Power Plant plans to develop |wind power and solar power in |combination with eco-tourism, Thnh said. 
The number of wind power projects in Vietnam remains low since only wind turbine towers, which account for 20 per cent of production costs, can be produced locally, while investors have to import the other components.
Vitnam plans to produce propellers valued at 10 per cent of the investment cost, turbines worth 7 per cent of the cost, and several other small components.
A South Korean firm in B Ra-Vung Tu province produces wind turbine towers, and a US company manufactures turbines in the northern port city of Hi Phng.
“If the wind power market achieves strong growth in the future and attracts foreign investors capable of producing complicated parts, we will be able to raise the localisation ratio |to more than 40 per cent,” Thnh said.