Vietnam's Wind Development boom
President and CEO of Asia Pacific at Vestas
Published on 1st of September 2020
If you walk down the street in Ho Chi Minh or Hanoi at any time of day or night, the cities are teeming with people - young people. Half the population in Vietnam is under the age of 30. And these people are driving the massive economic growth that the country is experiencing.
The growing economy and modernising and industrialising economy is thirsty for energy, as all growth countries are. But unlike a lot of its neighbours, Vietnam is satisfying that thirst through new renewable sources, and not by importing more and more fossil fuel.
Just one year ago, Vietnam had just over 400 MW in installed wind generation capacity. Now, the country has over 2 GW of wind projects in operation or under construction, and Vietnam has quickly become a regional leader in renewable energy. What’s more, this growth is set to continue.
With a growing population of 96.7 million, Vietnam is at the forefront of power demand growth in the region. Its electricity consumption has increased by 13% annually since 2000. As investments in the country continue to accelerate, electricity peak demand is growing at 11% annually. Across the globe, industries are adjusting their supply chain to rely less on neighbouring China. With lower labour costs, a stable government and maturing infrastructure, Vietnam is proving an attractive destination.
To fuel this increasing demand, Vietnam is realizing its massive wind potential. In the top 10th percentile of windy areas, Vietnam’s average wind speeds are 7.2m/s at 100 m. According to an estimate from the Global Wind Energy Council, Vietnam’s estimated technical potential for onshore wind is around 24 GW.
In June, the Vietnamese government approved 7 GW in new wind projects for construction, putting it on track for a total wind power generation capacity of nearly 12 GW by 2025.
Technological advancement will help this transition. In Vietnam, costs for wind and solar dropped below those of coal in 2017, meaning renewables are now the cheapest form of new power generation on a Levelized Cost of Energy (LCOE) basis. While the average LCOE of coal is projected to remain at current levels through 2030, wind and solar LCOE will continue to decline as the technologies mature.
Renewable energy companies like Vestas are not only bringing the latest turbine technologies to the market, we are also venturing beyond traditional onshore turbines into near-shore and intertidal projects. Intertidal projects are located in shallow near-shore waters, using onshore wind technologies to harvest wind resources from the sea. Turbines are built on top of raised foundations, using the same foundation technology as onshore wind farms.
This technology does not require the same capital investment as full-scale offshore wind developments, and also minimizes disruption to farming and other near-shore land activities.
To date Vestas has captured over 1 GW of onshore wind and intertidal projects in operation, under service or under construction across 21 projects in the Southeast Asian country. Vestas is also venturing into EPC projects in Vietnam, and so far has supplied close to half of the country’s installed or under-construction wind capacity.
Owing to our excellent project execution record and service set up, we are already the dominant wind solution provider in the market, and it is our goal to maintain our leadership position in both Vietnam and the whole Asia Pacific region
Wind and other renewable energy can play a bigger role in helping Vietnam meet its increasing energy demand. A number of policies could help Vietnam move away from its reliance on coal, attract more foreign investment, as well as bring jobs and cheaper/cleaner energy to its communities. These include more ambitious wind development targets, clearer future procurement framework post 2021 FiT expiry, and a fit-for-purpose PPA.
Vestas is proud to be part of this journey to unlock Vietnam’s wind potential. Our goal for Vietnam and Southeast Asia is the same as our goal for every market where we operate around the world. That goal is to reduce reliance on polluting fuels, bring abundant clean, affordable renewable to the market, and to benefit consumers, industry, and ultimately the whole planet.