The Global Wind Energy Council (GWEC) and the global wind industry is calling on the Vietnamese government to postpone the feed-in tariff (FiT) deadline for wind projects by at least six months as a Covid-19 relief measure.
Due to pandemic-related obstacles and delays, most onshore wind projects currently in the pipeline will not complete construction in time to meet the 1 November 2021 deadline for tariff access.
GWEC said without a deadline postponement, these projects will be unable to progress, adversely impacting local economic growth and the wider renewable energy investment environment in Vietnam.
The ambitious targets proposed in the draft PDP8 master energy plan have reflected the Vietnamese government’s commitment to long-term decarbonisation of the energy system and strengthening Vietnam’s regional competitiveness.
“It is vital that policymakers act to prevent pandemic-related difficulties from reversing this progress”, stated GWEC.
The Covid-19 situation in Vietnam has created many hardships for the industry.
This extends to supply chain bottlenecks for wind project components, workers prevented from reaching project sites for crucial inspections and activities, travel restrictions for foreign personnel, and other issues.
As of August 2021, an industry survey conducted by GWEC estimates that 4000MW of mainly onshore wind projects in Vietnam are severely challenged by these “extenuating circumstances” and are now at risk of missing the November deadline for the wind FiT.
Using standard industry calculations based on global and Vietnam averages, 4000MW of wind projects translates to around $6.7bn in investment.
Approximately 21,000 jobs could be created from these wind projects, sustaining coastal populations and supporting a blue economy in Vietnam, said GWEC.
Much of this investment and workforce expansion would be locally focused at province level, including in transport, installation and operations and maintenance activities.
GWEC is calling on the Government of Vietnam to implement a six-month postponement of the FiT deadline to April 2022, to allow wind projects to complete construction safely and within the current procurement scheme.
The wind FiT was introduced by Decision 39/2018 and set at 8.5 US cents/kWh for all projects achieving commercial operations before 1 November 2021.
This policy provided a clear route to market for onshore wind projects and resulted in an investment pipeline of more than 140 wind projects signing power purchase agreements with the state-owned grid operator, Electivity Vietnam, as of August 2021.
However, due to the massive challenges posed by the ongoing pandemic, most of these projects face “uncontrollable delays” to construction.
GWEC’s survey found that more than 70% of wind projects which had submitted grid connection requests by 3 August 2021 will not achieve commercial operation by the deadline.
Missing this deadline would leave these projects outside the FiT scheme, deteriorating their economics and raising the risk of becoming stranded assets.