Despite abundant opportunities in renewable energy, Vietnam must address legal obstacles to facilitate the advancement of solar, wind power, and liquefied natural gas projects.
Numerous wind power initiatives are aiming to sell electricity by the end of 2025 to benefit from an attractive FiT of 6.95 US cents/kWh. This signals that substantial investment awaits entry into the renewable energy sector. However, investors are eagerly anticipating new developments in the direct power purchase agreement (DPPA) mechanism.
The Ministry of Industry and Trade (MoIT) highlighted that out of 95 wind power and solar power projects with a capacity of 30MW or more, 24 projects totaling 1,770MW have expressed interest in participating in a pilot DPPA scheme in Vietnam. An additional 17 projects, totaling 2,830MW, are evaluating their eligibility and capacity to secure contracts with large electricity consumers.
However, 26 projects have chosen not to participate in the DPPA pilot. The MoIT is expediting the development of the DPPA mechanism to attract investment in renewable energy.
Last month, Copenhagen Infrastructure Partners announced the launch of its Growth Markets Fund II, with a target size of $3 billion. This fund will enable the development of over 10GW of new renewable energy capacity.
Vietnam is a key focus market for the fund, featuring a pipeline of renewable energy projects such as the La Gan offshore wind project, scheduled for completion in 2030 off the coast of Binh Thuan province.
Additionally, Enterprize Energy has been actively present in Vietnam for the past 4-5 years, exploring opportunities to develop offshore wind power. Among them, the group is investing in the Thang Long offshore wind project, which includes Thang Long Wind with a capacity of 3,400MW and an investment of $11.9 billion, and Thang Long Wind 2 with 2,000MW capacity costing $5 billion.
Nevertheless, there are numerous barriers for offshore wind power projects like these to take off. According to Ernst & Young Vietnam, there are around 20 different risks for developers and lenders involved in offshore wind power project development in Vietnam. These include risks associated with legal permits and approvals, site selection, wind resources, technical design, financing, construction risk, and more.
The MoIT emphasizes the need to include offshore wind power projects in the list of important national projects with special policy mechanisms. Meanwhile, the ministry also advocates for a resolution to address legal obstacles for offshore wind power projects in line with Power Development Plan VIII.
