With Vietnam’s continued economic growth, demand for electricity is steadily rising, as is demand for renewable energy sources such as wind, solar, and biomass in the country’s electric mix. Vietnam’s current power generation capacity is about 54 GW and is predicted to grow to 130 GW by 2030. The Government of Vietnam announced its 10 year national energy growth plan in February 2021 to gradually scale up grid capacity to meet this increased. The energy development plan emphasises on the advancement of clean energy, with proposals to raise the proportion of renewable energy to 20 per cent and to minimise reliance on fossil fuels. One of the government’s top priorities for developing the marine economy is the production of offshore wind power.
However, several challenges still need to be addressed – one of them relates to the development of the corresponding transmission infrastructure, both offshore and onshore. This challenge, however, also presents the opportunity to deploy new and innovative technologies to develop a robust offshore transmission infrastructure with all stakeholders involved.
With this background, Global Transmission Report organised a one-day virtual conference on Offshore Wind Transmission in APAC on April 14, 2021. The mission of the conference was to present the plans, opportunities and technology solutions for the development of the offshore wind sector and the related transmission infrastructure in Asia. To this end, there were detailed discussions with policymakers, regulators, developers, financiers, transmission system operators, technology providers and industry experts to share their perspectives, learnings and issues. A session on Vietnam’s offshore wind capacity was organised with Mai Nguyen Phuong, Deputy Chief of the Office Electricity and Renewable Energy Authority, Ministry of Industry and Trade, Vietnam and Bernard Casey, Development Director, Vietnam Mainstream Renewable Power joining as speakers. Excerpts…
Mai Nguyen Phuong, Deputy Chief of the Office Electricity and Renewable Energy Authority, Ministry of Industry and Trade, Vietnam
Energy mix in Vietnam currently includes coal, oil, gas turbines, hydro, solar, wind and other RE projects. In the last three years, solar sector in Vietnam has seen substantial growth and now we are focusing on the development of onshore and offshore wind capacity in the country. Since 2018, the share of the renewable has increased from less than one per cent to up to about 8 per cent in 2019, and now it’s about 23.5 per cent of the total installed capacity in Vietnam.
Figure 1: Vietnam’s energy mix for the period 2008-2019
Vietnam’s onshore power potential is at 42 GW, while that of offshore lies between 214-261 GW. Offshore plants in Northern Vietnam have a higher capacity due to their location.
There were two major milestones in the development of wind power in the last decade. In the year 2011, the FIT1 tariff was introduced at the rate of 7.8 ($c/kWh). However, this first tariff wasn’t really attractive and that is why we didn’t see many developments in the wind power segment. In 2018, a new tariff was implemented called FIT2, with rates for onshore wind at 8.5 ($c/kWh) and that for offshore being 9.8 ($c/kWh). There was a drastic growth in projects after this move with the total number of cumulative installed wind capacity increasing from 223MW in 2018 to 537MW in 2021. As of March 2021, nine wind power projects are already operational in the country.
Figure 2: Cumulative capacity of installed wind plants in Vietnam
Regarding the wind project portfolio updated on March 1, 2021 nearly six wind power projects are proposed to be added to the power development plan (PDP), while nearly 12 have already been added till date. These projects are expected to be completed and be ready for operations by 2030. Most projects are concentrated in the Southern and central part of the country.
The new PDPs are named PDP8. According to this, expectations for the off and onshore wind power in the next 10 years is nearly 17 GW out of which 15 GW will be from onshore projects while the rest will be from offshore projects. Keeping in mind the infrastructural challenges of offshore projects, onshore and near-shore development is more convenient for Vietnam at this point of time.
Vietnam’s wind energy policy timeline:
- Finance Mechanism
- FIT1: Dated June 29, 2011 supporting the development of wind power projects in Vietnam
- FIT2: issued on September 10, 2018 and effective on November 1, 2018
- PPA : issued on January 15, 2019 on regulations on implementation of wind power projects development and standardised power purchase agreement for wind projects
Besides this, there are technical standards in place to regulate operations on the national grid systems. Additional guidelines are in place to ensure environmental protection.
FIT2 is set to expire in October 2021 and Vietnam is looking to either to expand the tariff system or use the option mechanism to call for investors. There are currently feasibility studies being held to see which option should be pursued.
Bernard Casey, Development Director, Vietnam Mainstream Renewable Power
Vietnam has kicked off the scaling of its wind industry with several small nearshore wind projects and is currently preparing for the first real utility scale off for a project. I’ll discuss transmission challenges and solutions for the country to realise the greater offshore wind potential along the coast of Vietnam.
The first near shore wind farm was commissioned in 2016. The project used walkways to the turbines and was set up in quite shallow waters. Array cables used onshore cable technology to be incorporated into concrete walkways that provided means for technicians to reach the turbines. A number of similar projects are now in construction in Tra Vinh, Ben Tre, Soc Trang, and Bac Lieu. It is expected that by the end of 2021, 400 MW of such projects will be in operation. Most of these projects have an onshore substation and connect to the grid at 110 K voltage.
Mainstream Renewable Power is currently in charge of the development of the 1,400 MW Phu Cuong Soc Trang offshore project. This is in partnership with the Vietnam-based Phu Cuong Group since 2017. This is a transition project from near shore to true offshore. The project is still relatively close to shore, but it does adopt offshore techniques such as the adoption of submarine cables rather than walkways and vessels for technicians to access the project for operations and maintenance (O&M). The project will oversee the construction of a 21-km 220kV double circuit transmission line for connection to the Vinh Chau 2 substation. The first 400 MW of the projects is in active development.
Figure 3: Project layout of the first 400MW of the Phu Cuong Soc Trang offshore project
Power development plan number 8 (PDP8) is the plan for the energy mix in Vietnam for the period between 2021 to 2030 with a vision to 2045. Most of the targeted offshore wind capacity development is concentrated in Southern Vietnam. As of now, the highest demand for power is in South, but by 2040, the PDP8 expects that the higher demand would be in the north of the country. The grid from Ho Chi Minh city to the South Central is relatively strong, however the grid from central to the North is not so strong. The maximum grid voltage in Vietnam is 500KV and the maximum capacity of a 500 KV line is about 1.7 GW. However, huge build out of 500KV lines and substations will be necessary to meet the 36 GW of offshore wind target and perhaps not practical.
There are two solutions that could be considered to meet the energy targets and one of them is to build ultra-high voltage lines from north to South. This is the term given to voltages in excess of 500KV. Consideration could be given to the construction of either a 1100kV DC or 800kV HVDC system. Each circuit can transport 8-10GW (1100kV) so double circuits could transport much of the planned offshore wind pre-2045. It would also facilitate exports to Cambodia which currently has a fairly small transmission line and prices are quite high as well. It will also facilitate import into Vietnam from Laos where electricity prices are low.
Another solution is a new generation technology, and that is to combine offshore wind with hydrogen production that’s achieved by electrolysis that uses wind power to split water into hydrogen and oxygen. Hydrogen can be stored and transported in various forms including fuel cells to power vehicles. This is really an energy storage solution that has the potential to reduce the demand for transmission capacity. This technology is its infancy and still under development, but there’s big investment research behind it.