- A new report by the Global Wind Energy Council, in cooperation with The Renewables Consulting Group, finds that Vietnam is facing a crucial crossroads in its energy system planning, and has the opportunity to act now to accelerate deployment of offshore wind in this decade.
- The first large-scale offshore wind projects are not likely to be connected to the grid until 2026 or later. For these initial projects, policy clarity and transparency on procurement mechanisms are urgently needed as the current Feed-in Tariff mechanism for offshore wind is due to expire by November 2021.
- Vietnam’s draft PDP8 energy plan contains true offshore wind targets of 2 GW by 2030, however high industry and investor interest indicates that Vietnam could raise its ambition to 10 GW by 2030 to meet rapidly growing power demand and increase energy security. The report makes several recommendations on long-term growth and sustainability of the offshore wind sector to meet this higher goal.
22 July 2021 – A new report released today by the Global Wind Energy Council, in cooperation with The Renewables Consulting Group, finds that Vietnam is facing a crucial crossroads and has the opportunity to act now to accelerate deployment of offshore wind in this decade. The report, “Vietnam’s Future Transition to Offshore Wind Auctions – International Best Practices and Lessons Learned,” draws from global case studies and makes concrete recommendations to enhance the long-term growth and sustainability of offshore wind in Vietnam.
With world-class resource potential and rapidly growing power demand, Vietnam is poised to be South East Asia’s offshore wind leader over the next decade. But true large-scale offshore wind projects are not due to be connected until 2026 at least, and a number of policy and regulatory challenges need to be addressed to safeguard the pipeline of investment and project development.
Among these are the expiration of the current intertidal Feed-in Tariff by November 2021, and the current 2 GW by 2030 offshore wind target in the draft Power Development Plan 8 master energy strategy – which, the report finds, could be raised to 10 GW by 2030 to maximise social, economic and environmental gains from offshore wind. The PDP8 is due to be approved and finalised later this year.
GWEC is calling on the Vietnamese government to urgently adopt a transition stage for offshore wind, and incorporate a systematic and open consultation process on future procurement and auction design. With less than 10 years to meet PDP8 targets for 2030, the time is now to begin wider consultation and consider raising ambitions to 10 GW by 2030. We hope this report will support Vietnam in this vital period of making offshore wind a pillar of the future energy mix. Liming Qiao, GWEC Head of Asia Tweet
“GWEC is calling on the Vietnamese government to urgently adopt a transition stage for offshore wind, and incorporate a systematic and open consultation process on future procurement and auction design,” said Liming Qiao, GWEC Head of Asia. “With less than 10 years to meet PDP8 targets for 2030, the time is now to begin wider consultation and consider raising ambitions to 10 GW by 2030. We hope this report will support Vietnam in this vital period of making offshore wind a pillar of the future energy mix.”
We have seen countries learn how to integrate auctions into offshore wind policy in different ways and the key conclusions and case studies from our analysis are presented in this report. Overall, a more coordinated approach is critical, considering the interaction of auction policy with other factors such as investor confidence and supply chain maturity, as well as ensuring a suitable transition period is put in place to move to a new mechanism. Michael Stephenson, Associate Director, The Renewables Consulting Group Tweet
“The policy solution for Vietnam to accelerate offshore wind growth and maximise its benefits will require more than auctions on their own – but they could be a piece of the puzzle,” said Michael Stephenson, Associate Director at The Renewables Consulting Group. “We have seen countries learn how to integrate auctions into offshore wind policy in different ways and the key conclusions and case studies from our analysis are presented in this report. Overall, a more coordinated approach is critical, considering the interaction of auction policy with other factors such as investor confidence and supply chain maturity, as well as ensuring a suitable transition period is put in place to move to a new mechanism.”
The report draws on the experience of six geographies in transitioning from offshore wind support schemes to competitive mechanisms, including: Denmark, Germany, the UK, the Netherlands, France and Taiwan. Each case study outlines the policy frameworks in place to guide the transition, the timing of different procurement schemes and the effect on installed capacity in the offshore wind market.
Global experience yields valuable recommendations for Vietnam’s nascent offshore wind sector, especially at this crossroads where the country’s energy system decisions will make the difference between a clean energy future and locking in carbon-intensive generation. Joyce Lee, Head of Policy and Projects, GWEC Tweet
“Global experience yields valuable recommendations for Vietnam’s nascent offshore wind sector, especially at this crossroads where the country’s energy system decisions will make the difference between a clean energy future and locking in carbon-intensive generation,” said Joyce Lee, GWEC Head of Policy and Projects. “The new report puts forth several concrete recommendations around the timing and transition from an offshore wind Feed-in Tariff, planning frameworks, auction design and more. Proactive efforts and cooperation in each area could support a larger and more sustainable pipeline of projects to 2030.”
The report recommends a transition period over the next few years, wherein an offshore wind Feed-in Tariff is established to apply to the first 4-5 GW of projects in VIetnam, concurrent to the government undertaking technical studies on auction design. Auctions could be introduced as soon as 2024 under this transition model.
Annex
- The full report “Vietnam’s Future Transition to Offshore Wind Auctions – International Best Practices and Lessons Learned,” and Appendix can be downloaded here.
- In addition to global case studies and recommendations for Vietnam, the report also includes the results of stakeholder interviews across government, investors, industry and fishing communities. These interviews reflect strong consensus that policy clarity and multi-stakeholder consultation is needed to enhance offshore wind policy design in Vietnam.
- The transition scenario outlines the possibility for at least 4-5 GW of true offshore wind to be connected to the grid in Vietnam by 2030, with potentially more capacity depending on the auction scheme and targets set out in PDP8 and other policies.
Global Wind Energy Council (GWEC) is a member-based organisation that represents the entire wind energy sector. The members of GWEC represent over 1,500 companies, organisations and institutions in more than 80 countries, including manufacturers, developers, component suppliers, research institutes, national wind and renewables associations, electricity providers, finance and insurance companies. Find out more RCG, an ERM Group company, is a specialized expert services firm supporting the global renewable energy sector. From strategy to implementation, the company serves businesses, governments, and non-profits around the world with technical and management consulting services for both mainstream and emerging renewable energy technologies. RCG works with the public sector, private equity and financial services firms, utilities and project developers, equipment manufacturers, and engineering and construction companies for on- and off-shore wind, solar, and emerging technologies including wave and tidal and energy-storage projects. Find out more
