Vietnam

Vietnam

Vietnam - Hunger for wind hampered by too many uncertainties

VIETNAM: Vietnam could be the motivated customer of wind turbine suppliers' dreams.

The economy has grown for more than a decade and power demand has soared so much that supply shortfalls are expected this year. Around 20% of the largely rural population is without electricity and Vietnam wants wind to help meet all this demand. But the prospects of arrays of turbines going up any time soon are, at best, mixed.

Vietnam has set a target of meeting 2% of its total primary commercial energy needs with renewables this year, rising to 3% by 2020 and 6% by 2050. Some of the legislative groundwork has been laid: The government made hydroelectric and wind power key pillars of its 2006 energy law, establishing the legal framework for foreign investment. Subsequent policy has created what the government calls one of Asia's most investment-friendly tax structures for renewable energy companies.

A handful of Western companies have shown interest in building wind farms and turbine factories. Germany's Fuhrlander last year installed five 1.5MW wind turbines - Vietnam's first wind farm - in the Binh Thuan region. Yet, in June, the state power utility had still not signed a power purchase agreement, even though it had already generated 11GWh, according to Vietnam Panorama News.

Reliable information is also in short supply. For example, many reports claim that a World Bank survey has estimated a potential 513GW of capacity in Vietnam. But Robert Spencer, the bank's energy sector co-ordinator for Vietnam, says the latest research, the 2001 Wind Energy Resource Atlas of Southeast Asia, put the figure at just 103GW. Spencer stresses that even this lower figure is strictly theoretical and greatly exceeds "what is technically feasible, never mind economically viable". The bank has provided a grant to Vietnam's Ministry of Industry and Trade to measure the resource at three of the most promising sites in the country - Ninh Thuan and Binh Thuan provinces on the southern coast, and Dak Lak province in the western highlands.

Initial conclusions are not encouraging. Spencer says the best site, at Phan Rang in Ninh Thuan, had estimated annual mean wind speeds of 6.5m/s, resulting in a cost of energy for a 50MW wind farm equivalent to $0.12-0.14/kWh - well above the $0.045/kWh cost of conventional power.

The government is drafting a renewable energy master plan that will set a target for wind - but this too has failed to dispel concerns. "If you are going to pay a wind energy producer rather a lot more than four-and-a-half cents an hour to get the electricity from them, who is going to pay that premium?" asks Spencer. "Is it going to be the tax payer or the electricity rate payer? That is a fundamental question which has not yet been asked in Vietnam."

Measurements at the three sites will continue until the end of the year. The World Bank is also financing a re-assessment of the Vietnam wind atlas, with results due around the same time. The contours of the map should help a country eager to adopt wind find the best way forward.

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