Vietnam’s proposed reduction of FITs damaging to wind power sector – GWEC
The Global Wind Energy Council (GWEC) said that it welcomes the Vietnamese government’s recent decision to extend the feed-in-tariff (FIT) scheme for wind power, but considers the proposed FIT reduction too steep.
The proposed rates of USD 0.0702 (EUR 0.0578) per kWh for onshore wind and USD 0.0847/kWh for intertidal/nearshore wind will start applying to projects commissioned between November 2021 and December 2023, GWEC said. These prices will represent a decrease of 17.4% for onshore wind and a 13.6% intertidal/nearshore compared to current rates.
If this FIT reduction becomes a reality, it would damage the growth of the Vietnamese wind power sector, kill jobs opportunities, deter investment and leave the country without the much needed capacity to meet its targets and booming energy demand, according to GWEC.
The organisation said it has recommended a six-month extension of current FIT levels to enable ongoing projects in the pipeline to come online, followed by a milder rate reduction for onshore and intertidal/nearshore projects commissioned from May 2022.
According to GWEC, Vietnam is already looking at cumulative wind power capacity of only 472 MW by the end of 2020, well below its target of 800 MW, due to delays related to implementation of the law on planning and disruptions caused by the COVID-19 pandemic. Lower FITs would only further jeopardise long-term development and increase energy prices, something that GWEC noted happening in other wind markets in the past, the organisation said.