Vietnam has less than 10 years to reach the target of 7 GW of offshore wind power set by Draft Power Master Plan 8. Meanwhile, referring to international experience, an offshore wind power project needs an average of 6-8 years of deployment for commercial operation. Many experts believe that what needs to be done now is to find pioneering businesses and implement pioneering pilot projects to create a springboard, opening a leap for a completely new energy industry.
The knot in the mechanism
According to the roadmap, after the Power Master Plan 8 is approved by the Government, the Ministry of Industry and Trade will develop a legal framework, mechanism and specific guiding documents for implementation. This includes determining the capacity scale of projects by locality; criteria for selecting investors through bidding; electricity purchase price. At present, the definition of what is an offshore wind power project is not clear.
Many experts believe that the process of forming a legal framework will take a long time because offshore wind power is a completely new industry in Vietnam. Therefore, the process of developing regulations is mainly based on international experience. Meanwhile, an offshore wind power project, even a small one, needs an investment of tens of billions of dollars within 6-8 years to come into commercial operation. Lack of specific legal instructions will make many businesses wary when investing, making the target of Power Plan 8 difficult to achieve.
Currently, Vietnam has the only offshore wind power project La Gan in Binh Thuan, with a capacity of 3500 MW, which is preparing for geological research.
Another bottleneck these projects face is the grid and electricity prices. Vietnam is a country with an independent power grid, not connected to the region like the EU or North America. The hot growth of renewable energy in general in the period 2019-2020 has clearly revealed this weakness when many projects have to reduce capacity to ensure the stability of the transmission system.
When offshore wind power develops, the problem is not just building connectors for the cable to bring electricity to shore; It is also a matter of improving the transmission capacity of the power grid. If the status of projects operating below the designed capacity, the risk of businesses losing money and bankruptcy is predictable.
The difficulty of Vietnam at the moment is that there are 45/96 offshore wind power projects being registered located in the North Central and South Central regions. While the major load centers are located in the North and the South, the capital required to build a new power grid is very large.
If you want to invest in the electricity grid, you need to go with the price of electricity. However, EVN's purchase price of electricity from renewable energy has always been higher than the selling price, making it difficult for businesses to rotate capital. On the other hand, the most recent FIT electricity tariff for renewable energy has now expired from October 2021. The Ministry of Industry and Trade is consulting on a bidding mechanism for renewable energy, including offshore wind power.
Offshore wind power is a completely new industry in Vietnam. If successful, it can open up opportunities to accumulate science and technology, potentially developing many other economic activities.
The fact that many investors have registered for projects in the past time is also a problem. The number of enterprises applying for a license to survey the sea for offshore wind power is increasing, but some provinces have many projects on one sea, some provinces have only one project in the whole sea.
On the other hand, Vietnam has not yet completed and approved the development strategy and marine planning. Therefore, many other economic activities, such as the planning of a 15km wide North-South sea route, do not create conditions for offshore wind power to be deployed in potential sea areas. In addition, the survey and construction at sea also need to pay special attention to national security and sovereignty, especially projects with foreign elements.
Need a pioneering business to take the lead
According to many experts, offshore wind power is a completely new industry; Therefore, the current urgent issue is that Vietnam needs to have key projects at the forefront, enjoy specific mechanisms and be carefully monitored to create a practical premise for the process of drafting regulations.
In the near future, Vietnam will accelerate research and offer a bidding plan for offshore wind power projects. However, it is necessary to have a transition mechanism before bidding because it not only saves time waiting for the mechanism, but the experience of other countries shows that this is a reasonable solution.
This mechanism will apply a fixed electricity tariff (FIT price) suitable to Vietnam's conditions, for the first 7 GW in the period up to 2030. At the same time, the Government can choose investors (no more than tender), on the basis of which strict criteria are set
An offshore wind power project in Vietnam must be licensed by more than 10 ministries and sectors. Therefore, it is necessary to immediately implement key projects for Vietnam to achieve the target of 7 GW on time
In terms of capital, at least 10 billion USD must be mobilized between now and 2030, while domestic banks have restrictions on the amount of loan for a business and credit limit. This requires businesses to be familiar with working with major banks in the world. In addition, professional staff, proficiency in science and technology and experience in international cooperation also need to be focused.
In Vietnam, RT Energy is one of the businesses that can meet the above criteria and is ready to contribute resources to the process of realizing the first 7 GW of offshore wind power.
RT Energy determines the group's strategic development direction in the coming years is to invest in the construction and operation of renewable energy projects; research and application of new technologies such as storage batteries, green hydrogen production, etc., which are associated with the development of offshore wind power projects.
One of RT Energy's strategic partners is Vestas Wind System, the world's largest wind turbine manufacturer, with a 28% share of the global market. Vestas has a line of offshore wind turbines with capacities up to 15MW.
In 2021, RT Energy has successfully implemented an onshore wind power project in Ninh Thuan province in cooperation with many corporations in this field in the world, such as General Electrics (USA), PowerChina (China), Henste Engineering (Singapore), Rina (Italy). These "big guys", with strategic partners such as Envision, Goldwind from China; Siemens Gamesa; Vestas Wind System from Europe,... helps RT Energy have a great advantage in receiving the world's leading offshore wind power technologies; source of consulting experience in implementing quality projects; components and input materials are guaranteed;...
It can be seen that in less than 10 years, Vietnam still has a lot of urgent work to do right now to achieve the first 7 GW of offshore wind power. The road to that goal will be a long road that requires the mobilization of resources, companionship and strong commitment of private enterprises such as RT Energy.
