Wind power in Vietnam: three problems may shrink investors back

Published: 08/06/2013 10:17



The Bac Lieu wind power project has succeeded. However, this does not mean that the problems have all been settled. And they would still be the hindrance to the other wind power projects in the future.

The three biggest problems

Wind power projects always require big investment rates, while the electricity production costs are always high. Therefore, the biggest problem is to find out the price level which can be affordable to consumers and can bring reasonable profits to investors.

The overly high prices would make people refuse to use wind power, even though it is a kind of clean energy. Meanwhile, the low electricity selling price would discourage investors to pour money into wind power projects.

Therefore, the state should act as the intermediate party which harmonizes the benefits of the manufacturers and users. And in order to be powerful enough to fulfill that role, it needs to have three main factors – the capital resources, the reasonable management policies, and the high capability to manage the system.

Meanwhile, all of these remain the big challenges for Vietnam.

Regarding the capital arrangement, in the context of the economic recession, it’s difficult for everyone to access capital resources, which also means that the green energy would not be a priority subject for bank loan access.

When commenting about the policies, Preben Hjortlund, Chair of Eurocham said the government is still reluctant to follow the market rules in pricing goods. In the energy sector, the price adjustments still need the approval from the State.

Under the mechanism, the electricity wholesale buyers, the Electricity of Vietnam or authorized units, have to buy the whole output churned out by wind power projects for 20 years at least, at VND1,614 per kwh, or UScent7.8, not including the VAT. The price is higher than the current average electricity price at VND1,437 per kwh.

Though the government agrees to buy wind power at high prices, investors still dare not pour their money into the sector for the fear of the policy risks, since the policies are changeable. Besides, they still keep worrying about the transparency during the energy transfer.

And finally, it remains a big challenge for Vietnam to manage wind power projects due to the problems in the educational sector. To date, Vietnam still has not run any official curriculums to train the workers for the wind power industry.

PPP would be the solution

Experts believe that in such circumstances, the private public partnership PPP is the most reasonable solution to the problems.

The PPP model can help ease the burden on the capital arrangement, share and minimize risks, take full advantage of the resources for the management and strengthen the policies’ transparency, thus allowing bringing the highest possible effectiveness of the projects.

Because of its great advantages, PPP has been applied in many countries in the world.

According to AFP, in 2010, Denmark became the No 1 wind power country when the wind power capacity of the country accounted for 24 percent of the world’s total wind power capacity. 86 percent Danish consider wind power as the top priority among the recycled energies. The wind power output not only provides electricity for the country’s domestic consumption, but for the export as well.

In the latest news, a 37.5 MW wind power project in Ninh Thuan province has been licensed. The project has the investment capital of VND900 billion.


Provide by Vietnam Travel

Wind power in Vietnam: three problems may shrink investors back - Sci-tech |  vietnam travel company

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