Vietnam will stick to its plan to end its offer of a fixed wind power feed-in tariff (FiT) in November, the government said on Thursday, despite calls from developers to extend it due to coronavirus-induced delays on their projects.
Vietnam was looking to more than double its power generation capacity over the next decade with a focus on renewable energy. In 2018 it set the FiT at 8.5 cents/kWh for wind energy projects that could become operational before Nov. 1 this year.
The Global Wind Energy Council (GWEC), which represents developers, in a statement earlier this month asked the government to postpone the FiT deadline by six months to April next year due to pandemic-related delays.
The Ministry of Industry and Trade will switch to a new mechanism to set the wind power prices through bidding processes.
“Shifting from a mechanism of a fixed price to a bidding mechanism is the global trend and is in line with Vietnam’s legal system,”
Hoang Tien Dung, head of the ministry’s Department of Electricity and Renewable Energy, said in the statement.
In an email interview with Reuters earlier this month, William Gaillard, Asia Pacific sales vice-president of wind turbine provider Vestas, said that without the FiT, projects face huge uncertainty over their future revenue, if not a risk of default under their project finance terms.
“Facing sizable risk on investment and renewable jobs, future investors will shy away from the market and Vietnam will not have the booming wind energy sector we have seen in recent years,” Gaillard said in the interview.