Investors are waiting for a mechanism for offshore wind power

As part of the meeting between Prime Minister Pham Minh Chinh and foreign-invested enterprises and business associations on September 17, Sebastian Hald Buhl, country manager for Ørsted in Vietnam, mentioned the importance of developing offshore wind power.

According to Orsted, offshore wind power is an untapped natural resource, which like oil and gas, can deliver significant economic benefits and provide reliable and domestic power in quantities needed to fuel the country's booming economy.

To ensure a successful launch of Vietnam's offshore wind industry, it is necessary to issue site survey permits urgently so major project development can start. These should be granted exclusively using pre-qualification criteria to ensure efficient use of Vietnam's seabed.

“The government should use a competitive transitional mechanism to kickstart the industry and give the authorities time to design an efficient auction system to meet the greater targets in 2035 and beyond,” he said.

An improved PPA will also mobilise financing and lower the cost of offshore wind. In fact, a few key improvements, such as curtailment protection, would deliver significantly cheaper offshore wind for energy users in Vietnam.

“Finally, we really need speed if we wish to achieve the 2030 target since offshore wind farms take 6-8 years to develop and build,” he said.

In Vietnam's north, there are now 22 registered projects with a total capacity of 51.6GW. Meanwhile, in the centre and south, there are 74 offshore wind power projects registered with a total installed capacity of 104.6GW.

The total installed capacity of offshore wind power registered in the Power Development Plan VIII is more than 156GW, many times higher than the target of 7GW by 2030.