Putting wind in the sails of power producers

Wind energy is expected to play an important part in the Government’s plan to increase the share of renewable energy from 2.5 per cent in 2008 to 5 per cent in 2020.

Work is going on on 42 wind energy projects in 12 central, Central Highlands, and southern provinces with participation by investors from Germany, Canada, Switzerland and Argentina, but at a very slow pace.

“The high investment required for wind energy means electricity prices are double that of other sources,” Viet Nam Economic Times quoted Pham Manh Thang, head of the Energy Department, as saying.

“That is why wind energy is developing slowly.”

It is now sold by producers at VND1,300 per kilowatt-hour compared to VND450–700 from other sources.

Besides, there is no master plan or incentives at either the central or local level to develop wind power, while awareness of its advantages is low.

To encourage generation of wind energy, the Government has issued a decision taking effect next month that waives import tax on all materials and equipment required for it.

Wind-power projects will also benefit from exemption and reduction of land-use charges.

Projects that link up with the national power grid will also get price subsidies, with electricity companies paying VND1,614/kWh.

The Government will pay buyers 1 cent per kWh through the Viet Nam Environmental Protection Fund.

The support will be gradually reduced and finally stopped when wind-energy prices drop to the same levels as those of hydro and thermal power.

The decision augurs well for the industry, experts believed, but also warned that the investments required for generating wind power should be worked out carefully to avoid pressure on electricity prices. — VNS

Tags: Vietnam energy, Vietnam wind power project