Illustrative image (Photo: VNA)Hanoi (VNA) - The Global Wind Energy Council (GWEC) said it hascalled on the Government of Vietnam to urgently extend the wind energyFeed-in-Tariff (FiT) scheme.
According to the council, Vietnam’s wind industry isalready facing a slowing of investment in 2020 because of uncertainty aroundthe investment framework, and further delays to the FiT extension will hindersupply chain development and cost reduction in the emerging wind market, andultimately undermine Vietnam’s goal of affordable, reliable and cleanelectricity.
Vietnam is the fastest-growing wind market in theregion, with 500 MW of onshore and offshore capacity currently installed and atleast 4 GW forecast to be commissioned by 2025.
However, investor interest in wind project developmentin Vietnam has slowed significantly in 2020, as onshore wind projects typicallyrequire 2 years for development but the current FiT only applies to projectscompleted by November 2021.
Without clarity on the FiT scheme from 2022 onward,investors are facing too much uncertainty to commit to new wind projects,jeopardising the future pipeline and leading to job cuts in the sector.
“Vietnam has been widely recognised for quicklybecoming a regional leader of clean energy in South East Asia and attractinginvestment commitments from a number of worldclass companies in the sector,”says Ben Backwell, GWEC’s CEO. “The government must now avoid slowing downbadly needed investment in wind energy by extending the FiT scheme, therebyensuring that long-term investments can materialise to create tens of thousandsof skilled jobs and provide clean, competitive power for Vietnam’s economy.”
In June this year, the Prime Minister approved anadditional 7 GW of new wind projects to be added to Vietnam’s master plan forthe power sector (PDP 7). However, the reality is that the vast majority of the7 GW may not materialize, due to lack of certainty on the FiT extension.
“Vietnam is on the cusp of achieving economies ofscale and cost reduction in the wind industry, and this momentum must bemaintained if it is to avoid a boom-bust cycle of development,” says MarkHutchinson, Chair of GWEC’s South East Asia Taskforce. “Due to projecttimescales, 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 thelong run, this will jeopardise the cost reduction made possible by consistent,large-scale supply chain development, and ultimately result in less renewableenergy at higher prices for Vietnam.”
At least 1.65 GW of wind projects is forecast to beinstalled before the current FiT expires in November 2021. Wind energy, as aclean, indigenous energy source, plays an important role in bolsteringVietnam’s energy security and meeting its soaring electricity demand.
Moreover,the growing renewables sector could generate billions of dollars in investmentcapital and hundreds of thousands of jobs in the long term.
The Government of Vietnam is currently considering theFiT extension and the introduction of a new FiT scheme. The situation for thewind sector has now become critical, as the slowdown in investor interest in2020 has been compounded by disruptions from the COVID-19 pandemic.
To date, Vietnam’s wind market has benefited fromincreasingly strong flows of foreign and domestic capital. The 4 GW due to beinstalled by 2025 could generate up to 65,000 jobs and about 4 billion USD ininvestment.
To realise this potential, the Government of Vietnammust act now to extend the wind energy FiT scheme and avoid a prolongedslowdown of clean energy investment and installation in the years ahead, thecouncil said.
GWEC is a member-based organisation that representsthe entire wind sector. The members of GWEC represent over 1,500 companies,organisations and institutions in more than 80 countries, includingmanufacturers, developers, component suppliers, research institutes, nationaland regional wind and renewables associations, electricity providers, financeand insurance companies./.
VNA
