The announcement underlines Vietnam’s ambitions to be a leading jurisdiction for wind energy development opportunities in Asia – joining Taiwan, Japan, and Korea.
The projects, set out in Dispatch No.795/TTg-CN (“Dispatch 795“), will form part of Vietnam’s broader Renewable Energy Development Strategy. The objectives of the strategy are targeted toward reducing Vietnam’s greenhouse emissions by eight percent by 2030 and incentivizing the development and use of renewable energy by the private sector. Dispatch 795 is another important step toward the adoption of large-scale wind energy in Vietnam.
Dispatch 795 demonstrates the clear commitment of the Vietnamese government to promote wind energy projects and renewable energy development more generally. Vietnam is reported to face power shortages in the future due to an increasing demand for energy and supply-side challenges. Power shortages are forecast by the Vietnamese Ministry of Industry and Trade (“MoIT“) to be most severe in southern Vietnam, which has benefited from approximately 3 GW of capacity allocation from the 91 projects.
Given the significant challenges facing Vietnam’s power system and the complexities of large-scale infrastructure development in the country, continued government commitment will be essential to the success of these proposed projects and the wind energy sector in Vietnam more generally. Jon Bowden, Head of the Vietnam Country Practice at White & Case, notes: “Substantial private sector development and investment will also be required in order to enable Vietnam to meet its renewable energy ambitions. If the projects set out in Dispatch 795 are successfully implemented, this will represent a very significant expansion of Vietnam’s renewable energy capacity.”
This announcement will also reaffirm the increasing optimism for the opportunities for offshore wind development in Vietnam, which was already well placed to benefit from the success of the surging offshore wind industry in Taiwan, Japan and Korea in particular.
The global offshore wind industry is firmly focused on Vietnam, with developers, institutional investors, financiers and export credit agencies eager to participate in ever-expanding project development and investment opportunities.
Andrew Clark, Head of Projects Asia-Pacific at White & Case, commented: “With appropriate government commitment, and an active solutions-focused approach to solving the challenges of large-scale infrastructure development in Vietnam, we foresee very significant opportunities for our international clients in the Vietnam wind energy sector.”