A wide array of foreign-invested wind-to-power projects have remained on paper or even had their licenses revoked due to prolonged delay, mostly due to low power buying prices, the Ministry of Planning and Investment-run Investment newspaper reported.
The government of the central coastal province of Ninh Thuan has removed the wind power plant project, proposed by IMPSA Singapore Pte, from its zoning plan as the investor has not completed investment procedures since 2011.
Back in 2011, Argentina-based Industrias Pescarmona S.A.I.C.y F (IMPSA) won in-principle approval from the local authority to carry out projects to build a wind power farm and a wind turbine manufacturing facility that would cost a total of $3 billion. However, the firm has yet to file its application.
In 2009, IMPSA and PetroVietnam Power Corp (PV Power) signed an agreement under which the Argentine renewable energy group planned to invest $3 billion in Vietnam to develop wind power and hydropower projects.
IMPSA also drew up a plan to develop a wind power project at an estimated cost of $1.2 billion and a $171-million plant to manufacture wind power components in Binh Thuan province. Similarly, the firm has made no further moves since then.
Ninh Thuan province has up to 12 wind power projects, but most of them, including an $800-million wind power project by a Malaysian firm, have moved at a snail’s pace.
The sluggishness of the projects stems from unattractive power buying prices. The current price of 7.8 U.S. cents/kWh is not enough to help the investors cover costs, according to the newspaper.
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH last year said in a report that developers of wind power projects would incur heavy losses with the current buying price, albeit higher than the selling price for end users.
GIZ experts asked for more specific procedures for small wind power projects, longer validity for investment and generation licenses, and a stricter Standard Power Purchase Agreement from Electricity of Vietnam (EVN).
According to the newspaper, the Ministry of Industry and Trade has proposed raising the buying price of wind power to 10 U.S. cents per kWh, to broaden the path for the wind power industry. However, the proposal has not been approved.