The Vietnamese wind energy market for Finnish companies

Vietnamese wind energy market for Finnish investors is seen very potential. In order to define the potential areas for wind energy exploitation in Vietnam, national level research works and studies have been done by experts and scientists from recognized institutes and organizations such as Institute for Meteorology and Hydrology, Ho Chi Minh Center for Sciences and Technology, World Bank, etc.

According to Pham Anh Tuan (2008), the survey result made by World Bank shows that 8.6% of the land area in Vietnam has the most potential for wind energy development, especially in high land, mountainous and remote areas, and islands. The traditional power resources including coal, oil and gas will only be enough for about 30 – 40 years, coal in more than 60 years. After that, those resources will become exhausted and Vietnam’s energy will become dependent on the external resources. For those reasons, Pham asserts that development of wind energy is the right choice.

Phan My Tien (1993) summarizes the situation of wind energy and wind resource data in Vietnam. Study on renewable energies has begun from 1981 starting from the fact that the green-house effect has resulted in global warming, which has caused climate change and rising of sea water level. Green energy development will help to reduce the CO2. The 10-year study shows that in Vietnam, wind energy can be exploited in islands, coastal and delta adjacent areas, high land and some special geological areas such as high mountainous areas or valleys. It is also recommended that the size and capacity of the wind turbines being installed should be carefully studied so that the wind resource can be fully made use of by using properly selected wind turbines. In addition, weather conditions such as storm, hard wind, etc. in Vietnam should be taken into consideration when designing turbines to ensure the longevity of the turbines. At present, wind is exploited to generate power mainly for water pumping, rice field works, etc.

Tran Huy Khang & Phan My Tien (1990) used international standard methods and recorded wind speed at different observation stations nationwide. The result shows that offshore wind energy has the most potentiality. For example, total wind energy in offshore islands is about 3,000 – 4,500 kWh/m2/year. Based on those calculated statistics, a look-up handbook has been done for available wind energy data in 31 locations in Vietnam, mostly delta, coastal areas, island and high land. This wind energy look-up handbook can show eight important characteristics to calculate wind energy monthly, yearly and periods during the year.

Nguyen Huu Hung & Duong Thi Thanh Luong (1998) concluded that wind energy in Vietnam can be exploited to generate power in mountainous and coastal areas. They suggested the possibility to develop small wind power turbines in combination with diesel generator in those areas and construction of wind farm for connecting with the national grid, which is economically effective.

Ta Van Da (2006), in the north, wind power is stronger in delta and coastal areas, especially in Quang Ninh, Thai Binh and Hai Phong, where the annually average wind speed recorded is above 3m/s. In the central and low areas, wind is weaker, the annually average wind speed is only 2m/s; however, in the border areas with Laos where there are many high mountains, the average wind speed ranges from 2m/s – 3 or 4m/s. The highland has the most potential wind resource with the average wind speed of above 2.5m/s – 4m/s. Even some places like An Khe, the wind speed is about 7 – 8m/s. In coastal areas such as Tuy Hoa, Phan Thiet, Ca Na, Mui Ne, etc. the wind speeds are also high. In the south of Vietnam, potential wind resource concentrates mainly in coastal areas such as Ha Tien, Ca Mau with average wind speed of 4m/s. Statistics show that in offshore areas such as Hon Dau, Hon Me, the wind speed is about 3.5 – 4m/s; Bach Long Vy island, 6.3m/s; Truong Sa, 5.8m/s; Phu Quy, 5.1m/s; Con Dao and Phu Quoc, 2.7m/s. The wind speeds have been recorded and calculated at heights of 10m, 20m, 40m, and 60m for 150 stations in Vietnam.

There have been discussions about the investment cost for wind energy. Phan My Tien (1993) evaluates that huge required investment for wind energy and low technology has made it impossible to exploit wind energy in Vietnam. However, if it is made in practice, remote, mountainous areas and islands, where the national grid cannot reach, can be provided with power. In addition, using wind energy contributes to making the environment clean and ecological balance. It is believed that with more and more advance technologies, the investment cost will be reduced. The study of Phan’s was done more than a decade ago. At that time, to install a wind turbine was only a dream. However, nowadays, it is not a dream anymore because wind turbines to generate power have been installed in several potential areas in Vietnam such as Bach Long Vi (Hai Phong), Binh Thuan, etc.

A recent study carried out by Dam Quang Minh & Vu Tu Anh shows that price/ investment is not as high as people often think if considering both internal and external costs. The external cost refers to the cost for environment protection, residential resettlement, etc. Besides, there are valuable benefits. Those benefits hold both social and environmental values. Surely, the cost will be reduced over time thanks to advanced technology.

In the 1980s, wind farms have been designed and constructed with the original price tenfold the coal generated power. Nowadays, the price has been tremendously reduced to six cent US dollar per kWh. (http://hoithao.viet-studies.info/2008_BuiVanDao.pdf). According to his analysis, the COE (cost of energy) = Installed cost/ Annual energy produced.

For example, for the 1.5 MW wind turbines in land-based wind farms,

Potentiality of Vietnam wind energy market brings opportunity for Finnish investors
Cost for wind power plant

COE = $1,300 per kW/ 2200 kWh/ year per kW = US$ 0.59. The energy price = energy cost + operation and maintenance costs + bank interest. Suppose the remaining costs are 10% of COE, we have the charge price/ kWh is six cents, which can be accepted by the users. In theory, the COE can be reduced by decreasing the installed cost and increasing the annual energy produced.

Cost for a wind power plant

Presently, lmost all investment in wind energy in Vietnam is supported by foreign investors. There have been several foreign investment big wind power projects which have been constructed and being constructed in Vietnam. The first wind turbine in Vietnam was installed in Bach Long Vi island with capacity of 800 kW. The project came into operation from 31 October 2004 after more than three years of construction and installation. Implementation companies include Made company (equipment supplier), Tucme company (the consultant) and Technologias Renovables S.A (construction); all are from Spain. The first wind farm in Vietnam is in Con Dao island. On 09 December 2008, in Vung Tau, AEROGIE.Plus Renewable Energy Co., Ltd. has obtained construction license for a wind power plant in Con Dao with total capacity of 7.5MW, and total investment capital of twenty million euro; and AEROGIE (Switzerland) is the project employer. Operation of the wind power plant is expected from mid 2010. There are also other completed and on-going wind energy projects in other areas in Vietnam. In Quang Ngai province, there is a wind project in Ly Son island with capacity of 7MW built by Ly Son wind energy Joint Stock. Binh Dinh province has the largest number of wind projects in the country. These projects are contracted by Tomen (Japan) in 1999, Vietnam Energy Investment and Development in 2000, European Provider Network Gimbh (Germany) in 2006, Power Installation Consultants Company No.3 (Ho Chi Minh city) in 2007, 30MW wind project in Khanh Hoa (Germany) in 1997, Grabowski (Germany) in 2004, Central Wind Energy Joint Stock in 2007, Phuong Mai wind farm No.1, 2 and 3 with capacity of 50MW, 200MW and 50.4MW respectively. There are also many wind projects in Binh  Thuan province. At the moment, there are nine investors (domestic and international) having registered wind energy projects with total capacity of more than 1,000MW. In Ninh Thuan, there are ten projects which have been granted investment licenses or project in-principle approval. The investors are domestic (Asia Clean Energy, REVN) and foreign from Germany (EATTRA), Canada (Greta), and Switzerland (Aerogie Plus).

List of current wind energy project in Vietnam:

  • 2 MW wind power installation in Ly Son island. The feasibility study has been completed by the Institute of Energy. EVN is the main project investor.
  • 15 MW wind farm in Binh Dinh Province. The feasibility study was prepared by Phuong Mai company.
  • Wind Power Project in Ninh Thuan Province funded by the Indian Government and Electricity of Vietnam. IE completed the feasibility study.
  • 84 MW Wind Power Project in Phuong Mai. The main investor is Grabowski Renewable Energy Company No. 1 Ltd.
  • 2.5 MW wind project in Phu Quoc island.
  • 15 MW wind farm in Phu Yen Province. The project is owned by VINACONEX. Institute for Energy (IE) prepared the feasibility study.

The Vietnamese wind market is very potential. Wind energy is seen as the most effective energy alternative. At the moment, Electricity Vietnam (EVN) is only concentrating on thermal, hydro, and gas generated power. A nuclear power plant will be realized in future. Renewable energies such as wind, solar energies have not been paid much attention. Prof. PhD Nguyen, senior expert of Research Center for Energy and Environment said that the potential exploitation of wind energy in Vietnam by 2030 is 400 MW.

Finland was one of the world’s leading nations in linking economic growth and clean technology, especially liquid waste treatment and renewable energy technologies. Finland wants to continue promoting cooperation with Vietnam in clean technology. The workshop held by the Finnish embasssy in Hanoi was a good opportunity for businesses from both countries to discuss impacts of urbanisation and industrialisation, and help map out detailed programmes to implement jointly.

Do you want to be the first Finnish investor to build wind energy farm in Vietnam? We will help you with market research and finding partners for your business. Send us your request, we will be happy to work with you.

By Hang Do

Source: An extract from my published book Power supply solution to Phu Quoc island, Vietnam

 

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