After the race for solar power, businesses started to switch to offshore wind, but the journey was not easy.

Suspend survey permission

Recently, the Ministry of Natural Resources and Environment proposed to the Prime Minister to suspend the appraisal and approval of offshore wind power surveys. According to the announcement, by August 31, 2022, this agency received 55 proposals, of which 1 proposal was approved.

The reason for temporarily stopping the offshore wind power survey license is that the State has not yet planned the sea areas with the potential and ability to develop wind power.

In addition, there are still many legal and technical problems, for example, there are no specific regulations on dossiers, documents, orders, procedures, and time to settle the approval of measurement and monitoring. the survey, survey, and assessment of marine resources; There is no regulation on the area of ​​the sea area approved for use for wind measurement, geological and topographic survey, and environmental impact assessment at sea, how many hectares per 1 MW of expected capacity for each sea area; There is no regulation on the maximum wind power capacity for a project, such as 0.5 GW, 1 GW or 2 GW... to ensure that investors are encouraged to participate in the project while ensuring a system balance. power transmission system… Therefore, the Ministry proposes to suspend the issuance of permits until the relevant regulations are established.

Before that, a series of businesses had plans to deploy offshore wind power projects. On June 22, 2022, Fecon Joint Stock Company (FCN code) signed a cooperation agreement for joint development with Corio Generation - an enterprise specializing in offshore wind power, specializing in exploiting renewable energy all over the world.

Accordingly, the two sides will cooperate in an offshore wind power project with a capacity of 500 MW in Ba Ria - Vung Tau province, located 25-30 km from the coast. The project is expected by Fecon to be one of the large-scale offshore wind power projects built in Vietnam, after being licensed and approved.

BCG Energy - a member of Bamboo Capital Group (code BCG) has 3 wind power projects with a total capacity of about 550 MW, including 2 offshore wind power projects in Ca Mau (with a capacity of 300 MW) and Tra Vinh. (capacity 200 MW). Currently, BCG is implementing phase 1 of 2 projects with a total capacity of 180 MW, constructing stations and transmission lines.

At Bamboo Capital's investor meeting in August, Mr. Pham Minh Tuan, Vice Chairman of the Board of Directors, said that projects are still focused on implementation by the Group and are waiting for Power Plan VIII to accelerate progress.

In October 2021, the US Agency for International Development announced a budget of 860,000 USD to fund 3 new renewable energy projects in Vietnam. In which, Bamboo Capital also received funding for the two projects mentioned above.

In early 2022, PetroVietnam Technical Services Joint Stock Corporation (code PVS) was approved by the Vietnam National Oil and Gas Group (PVN) to add offshore wind power investment to its main business. PVS considers this to be an important milestone in the Company's development strategy, in line with PVN's orientation in the context of the strong energy transition in the world and in Vietnam.

Recently, PVS has actively participated in providing services for most offshore wind power projects for domestic and foreign contractors. The enterprise also actively works with provinces with good wind potential in Vietnam such as Binh Thuan, Ninh Thuan, Khanh Hoa, Ba Ria - Vung Tau... to seek investment opportunities and develop energy projects. offshore renewables.

Hard journey

Although Vietnam is considered to have great potential for offshore wind power development thanks to its coastline of more than 3,000 km and the increasing proportion of renewable energy (wind power, solar power) being included in the development strategy, national energy, the development of offshore wind power is facing many difficulties and obstacles.

In a seminar on offshore wind power, Mr. Pham Nguyen Hung, Deputy Director of the Electricity and Renewable Energy Department (Ministry of Industry and Trade) also pointed out the importance of marine spatial planning. Because the development of offshore wind power is also related to industries such as oil and gas, maritime, fisheries, especially security and defense…

In addition to the reasons for legal and technical problems mentioned above, the biggest problem is that there is currently no new wind power price mechanism (the old FIT price mechanism has expired). While this is a factor to ensure the success of a large capital-intensive project, investors as well as credit institutions and financial institutions can rest assured to invest capital.

Pham Nguyen Ngoc Thuong, Deputy General Director and Chief Financial Officer of BCG Energy Joint Stock Company, shared that 2-3 years ago, when there was a FIT price mechanism, the situation of capital mobilization for single renewable energy. simpler than it is now. Because banks and credit institutions, when lending, look at the output story to evaluate the project, profitability, and future cash flow of the business.

“Foreign banks all look at the output story and assess the debt repayment ability of enterprises. Up to now, there is no new price mechanism, so it is very difficult to get foreign loans," Ms. Thuong said.

Many years ago, in order to encourage investment attraction in solar and wind power, the State had a preferential price mechanism (FIT price) for commercial operation (COD) projects before the stipulated time. This motivates many corporations and businesses to invest in renewable energy, and the ability to raise capital from domestic and foreign organizations also has many advantages.

However, after the FIT pricing period ends in 2021, price bottlenecks for solar and transitional wind power projects have not been satisfactorily resolved. On October 3, 2022, the Ministry of Industry and Trade signed and promulgated Circular No. 15/2022/TT-BCT stipulating the method of building a price frame for electricity generation of solar power plants, transitional wind power plants, and opening hope. New for businesses. Having a reasonable price bracket for offshore wind will be a different story.

In European countries, the price of offshore wind power depends on the depth of the seabed and the distance from the shore. The project is in the deeper sea area, the farther from the mainland, the higher the price will be. What businesses and investors are most interested in right now is when will there be an official pricing mechanism for offshore wind power, FIT pricing mechanism or bidding. If it is the FIT price, how much? If bidding, what is the transfer schedule to avoid a shock to the market?

Until the price mechanism has not been issued, businesses will still face many difficulties, if not "very difficult" in mobilizing capital from foreign investors and organizations.

The World Bank also pointed out that compliance with domestic standards for socio-environmental impact assessment can lead to offshore wind power projects not attracting international investment because they do not attract international investment. meet the requirements of investors.

Besides, offshore wind power projects often develop with larger scale and capacity than other renewable energy projects (equivalent to thermal power plants). Therefore, researchers calculate, to develop offshore wind power, it is necessary to prepare well for onshore connection and to have a national power transmission system at the voltage level of 220 kV or 500 kV. With the current domestic infrastructure conditions, this is not easy.

The story of power transmission infrastructure not keeping up with the growth rate of generating capacity of solar power projects is a very new lesson.

At times, solar power plants can only mobilize 50% of their capacity because of overloading the power transmission system. This causes damage to the investor. Although recently, investment in the development of transmission grid infrastructure has been focused, but still cannot keep up with the progress of renewable energy projects.

In addition, offshore wind power projects are also mostly concentrated in the Central and Southern regions, which already own most of the country's renewable energy plants, but demand for electricity growth is lower. north. So, when the power grid is overloaded, the possibility of production cuts can completely occur.