Vietnam risks “derailing” its booming wind power market with a cut to feed-in tariffs that’s among the most drastic seen globally, according to an industry body.
The Global Wind Energy Council (GWEC) said planned reduced rates of $0.0702/kWh for onshore wind and $0.0847/kWh for intertidal projects threaten the nation’s hard-won position as a regional wind power leader.
The rates would apply to projects commissioned from November 2021 to December 2023, according to a bulletin from government officials quoted by GWEC.
The wind body said the 17% onshore cut proposed is “one of the most dramatic reductions seen in any wind power market globally to date”.
Vietnam has been under pressure from developers to extend the FIT scheme beyond the end of 2021 amid a frenzied dash to complete projects that has been made more complex by disruption from the Covid pandemic.
The intertidal market for onshore turbines has proved particularly fruitful for OEMs such as Vestas and Siemens Gamesa.
GWEC said Vietnam is already likely to miss its 800MW target for cumulative installation by the end of this year, with only 472MW set to be in place.
Mark Hutchinson, chair of GWEC’s South East Asia TaskForce said: “We recognise Vietnam’s efforts in shifting the focus from coal to renewables in order to meet growing electricity needs, and wind power is more indispensable than ever to provide large-scale clean energy and balance the solar influx .
“Wind has longer project develop timelines than solar, and a milder FIT reduction will ensure there is sufficient time to develop a stable project pipeline and supply chain for the wind sector. But a steep reduction with no consideration for pandemic-related challenges will shrink Vietnam’s wind project pipeline and lead to a likely shortfall of wind targets again in 2025.”