In the past roughly 6 months, an unusually high number of turbine orders have been announced for wind farms in Vietnam, not least for the so-called intertidal projects, placed on the edge of beaches. The fact that all these orders are set for execution before the end of next year indicates that the heavy activity is due to the expiry of the current feed-in tariffs of VND 2,223 (EUR 0.087) per kWh in November 2021.
However, that doesn't necessarily mean that the market will come to a halt afterwards. Going from close to nothing, Vietnam has ambitions to expand its wind capacity by 6 GW in 2030, the potential of which is highlighted by many as coming from offshore wind. Most recently, the Danish Energy Agency (DEA) issued an update on the Danish-Vietnamese collaboration on offshore wind development, saying it points to a technical potential of 160 GW along the nation's 3,000-kilometer coastline.
However, the DEA is not the only Danish actor with its eye on the potential of the Southeast Asian country. The same applies to infrastructure fund Copenhagen Infrastructure Partners (CIP), which, by way of subsidiary Copenhagen Offshore Partners (COP), has now opened an office in the capital, Hanoi.
"I’m very excited to be working with one of the most experienced global offshore wind developers, and pioneering large-scale offshore wind projects in Vietnam. The market presents good opportunities for renewable energy developers," says Development & Commercial Manager Khanh Duong.
With the establishment of its latest growth market fund, CIP has already declared its interest in offshore wind in Vietnam, in line with countries like India and China. But that the infrastructure fund's plans for the Vietnamese market has a slightly shorter lead time wasn't kept a secret by the developer, as both CIP Managing Director Robert Helms and COP Founding Partner Henrik Scheinemann paid a visit to the Binh Thuan province in February.
At a meeting, the developer said that there were plans to establish a project of 4 GW, according to a statement by regional authorities. The first phase will consist of a 1,000 MW wind farm expected operational in 2024, while new 600 MW wind farms will be added over the following five years. The project, which authorities say goes by the name Lagan, is to be established in collaboration with a Vietnamese oil firm.
Moreover, according to both local sources and the Global Wind Energy Council, the government is getting close to an extension on wind subsidies. Meanwhile, the country's business ministry has merely recommended an extension by two years until the end of 2023.
Law firm Mayer Brown says it isn't the Vietnamese state subsidies that lure developers and potential investors. Rather, it is very much the framework conditions of the investments as well as favorable conditions surrounding things like taxes.
English Edit: Jonas Sahl Jørgensen