Nov 24, 2012

Vietnam - VN "wind power capital" unattractive to investors

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Considered the country’s “capital of wind power” with as many as 20 wind power projects planned for development until 2020, yet the south central province of Binh Thuan is not likely to meet capacity targets as investors are discouraged by the long time to recoup their investments.

Under the development master plan for the 2011 – 2020 period, the wind farms in Binh Thuan are expected to reach the installed capacity of 700MW, with nearly 1,500 kWh of total equivalent wind power output.

“But the target seems unfeasible,” said Duong Tan Phong, head of power and energy management of the provincial Department of Industry and Trade.

“The best we can do is to make it to only 500MW,” he admitted.

The largest obstacle at the moment is the lack of capital from the investors, he analyzed.

“A turbine for wind power costs millions of US dollars, but it takes quite a long time to recoup investments.

“So it’s difficult to attract investors,” he concluded.

In 2010 the PV Power RE Co Ltd broke ground on the Phu Quy wind power project with three turbines.

The VND335-billion project with a total capacity of 6MW officially became operational last August with the first two turbines beginning supplying power for the area. (VND1 billion = US$48,000)

But the company will have to earmark some VND10 billion on an annual basis in order to offset losses from the project, company director Pham Cuong said.

“The power produced by the wind farm is bought by the local power sector at 6.8 cent, plus 1 cent subsidized by the government,” he said.

“But we will only be able to break even at 10.36 cent a kWh, although it will also take as long as 12 years.”

Meanwhile in Tuy Phong District, the wind power produced by the project of the Renewable Energy Vietnam Co (REV) has been connected to the national electricity system.

The VND1-trillion project consists of 20 turbines with total capacity of 30MW, and it will also take it a long time to recoup investment given the current power buying price, a company representative said.

TUOITRENEWS


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