Urgent action needed to expand Vietnam’s wind energy market

renewable energy
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An industry alliance led by the Global Wind Energy Council (GWEC) has issued recommendations to help the government of Vietnam expand its wind energy market.

The alliance has called on the government of Vietnam to urgently extend the wind energy Feed-in-Tariff (FiT) scheme.

Extending the scheme will help Vietnam to maintain regional leadership in clean energy investment.

The country’s wind energy sector is facing a slowing of investment in 2020 because of uncertainty around the investment framework.

Onshore wind projects typically require two years for development but the current FiT only applies to projects completed by November 2021.

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Further delays to the FiT extension will hinder supply chain development and cost reduction in the emerging wind market, and ultimately undermine Vietnam’s goal of affordable, reliable and clean electricity.

Today, Vietnam is the fastest-growing wind energy market in South East Asia, with 500MW of onshore and offshore installed capacity, and an additional 4GW due to be connected by 2025.

At least 1.65GW of wind projects is forecast to be installed before the current FiT expires in November 2021. 

In June this year, the Vietnamese Prime Minister approved an additional 7GW of new wind projects to be added to the country’s master plan for the power sector (PDP 7). However, the reality is that the vast majority of the 7GW may not materialize, due to lack of certainty on the FiT extension.

The wind sector is expected to bring 65,000 jobs and around $4 billion of investment into Vietnam by 2025, according to the GWEC.

Ben Backwell, GWEC’s CEO, said: “Vietnam has been widely recognized for quickly becoming a regional leader of clean energy in South East Asia and attracting investment commitments from a number of worldclass companies in the sector.

“The government must now avoid slowing down badly needed investment in wind energy by extending the FiT scheme, thereby ensuring that long-term investments can materialise to create tens of thousands of skilled jobs and provide clean, competitive power for Vietnam’s economy.”

Mark Hutchinson, chair of GWEC’s South East Asia Taskforce, adds: “Due to project timescales, a delayed FiT extension risks a “bust” period for the wind sector, wherein very few projects will be connected to the grid from 2022-2023. In the long run, this will jeopardize the cost reduction made possible by consistent, large-scale supply chain development, and ultimately result in less renewable energy at higher prices for Vietnam.”

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