Although wind power development is considered a great potential sector in Vietnam, investors have been hesitant to develop new or expand their existing projects due to the low regulated selling price of wind power lengthening the time to recover investment capital by a significant margin.
Vietnam FIT
The Vietnamese government has issued the long-expected FIT scheme for solar energy projects. The 20-year FIT was set at VND 2,086 ($0.091)/kWh. Furthermore, a net metering mechanism is expected to support residential PV across the country.
Electricity infrastructure capacity is limited, operation of certain power projects has been delayed, and private investors are reluctant to invest in the sector due to their concern of low rates of return on equity and low feed-in-tariff.
“There’s nothing that can make up for a feed-in tariff that’s in the single digits,” said Daniel Potash, chief of party at the Private Financing Advisory Network for Asia program, under the U.S. Agency for International Development.
Article 14 of the Decision provides a ground-breaking feed-in tariff for power suppliers of up to “VND 2,114/kWh (equivalent to 10.05 US cents/kWh)”. This is more than 25 percent higher than the 7.8 cent applicable to wind power projects in Article 14 of Decision 37/2011/QÐ-TTg from 2011. 10 cent per kWh was long considered the minimum threshold for investments into renewable energy projects.
Below is the Vietnamese feed-in tariff for wind energy that has been in effect since 2011. DECISION ON MECHANISMS FOR … Read more
Vietnam’s program is il-defined and limited, providing a tariff only for wind energy. Further, the tariff is supplemented by … Read more
