Wind power from Laos competes to enjoy good prices

Information that the price of wind power purchased from Laos to Vietnam may decrease sharply, down to the equivalent of 5.51 US cents/kWh, instead of the ceiling of 6.95 Scents/kWh before January 1, 2026, is of great interest to many investors.

Electricity purchase price will decrease sharply

The Electricity Trading Company (EPTC) has just sent a document to Vietnam Electricity Group (EVN) regarding the calculation of the price frame for electricity imported from Laos.

According to the EPTC proposal, the new price for wind power after 2025 will be 5.51 US cents/kWh. This figure is a sharp decrease compared to the ceiling price of 6.95 US cents/kWh currently applied to some projects selling electricity before 2026.

The basis for calculating this electricity price of EPTC is based on a report by the International Renewable Energy Agency (IRENA) in 2022. This report states that the investment rate for wind power plants decreases by 3.46%/year.

It should also be recalled that in early 2023, the Ministry of Industry and Trade issued Decision No. 21/QD-BCT, stipulating the ceiling price of the electricity generation price frame applicable to onshore wind power projects at VND 1,587.12/kWh (equivalent to 6.42 UScents/kWh - according to the exchange rate of VND 24,730/USD at the end of October 2023).

Accordingly, it is understandable that EPTC has provided grounds for the ceiling price for purchasing wind power from Laos after 2025 to decrease sharply compared to before, especially in the context that the review of conditions for wind power projects in particular and renewable energy in general to enjoy good prices has not yet come to an end.

Of course, the proposal to reduce the price of wind power purchased from Laos after 2025 immediately attracted great attention from investors, because many projects have planned to be deployed to sell electricity to Vietnam in the near future.

To import wind power from Laos, EVN proposed that the Ministry of Industry and Trade report to the Prime Minister to add to the Power Plan VIII and the Power Plan VIII implementation plan the grid connection projects serving the connection to import electricity in the Quang Tri area.   Specifically, adding a 220 kV double-circuit line from the border to the 220 kV Lao Bao Transformer Station, the progress is expected to be completed by 2025 and will be transferred to the 500 kV Lao Bao Transformer Station (Huong Hoa) after the 500 kV Transformer Station is put into operation. Deploying a 500 kV double-circuit line from the border to the 500 kV Lao Bao Transformer Station (Huong Hoa), the progress is expected to be 2026 - 2030 (replacing the Xebanghieng - 500 kV Lao Bao Power Plant cluster approved in the Power Plan VIII).

According to EVN statistics, by the end of October 2023, EVN had received proposals to sell electricity from wind power projects invested in Laos to Quang Tri province alone with a total capacity of 4,149 MW. Many wind power projects in Laos are even proposing to proactively invest in transmission lines to the connection point of the Vietnamese side.

For example, the Truong Son Wind Power Plant Project, with a capacity of 250 MW in Bolikhamxay province, planned to operate in the fourth quarter of 2025, is ready to invest with the Project's own capital to build a 220 kV double-circuit line, with a length of 75 km connecting to the 220 kV feeder at the 220 kV Do Luong Substation ( Nghe An ).

Or the Savan 1&2 Wind Power Plant cluster located in Savannakhet, with a capacity of 2 x 495 MW, invested by Vinacom Invest and Trading Company, also proposed that the Ministry of Industry and Trade invest in the entire power grid project connecting the Savan Wind Power Plant cluster to the Vietnamese power system, including the 220 kV line from the Laos - Vietnam border to the 500 kV Huong Hoa transformer station and the 220 kV bays serving the connection.

At the AMI Savannakhet Wind Power Project with a scale of 187.2 MW of Ami Renewable Company, the investor proposed to self-invest in the entire power grid project to connect to the Vietnamese power system, including the line from the Laos - Vietnam border to the 500 kV Huong Hoa station.

For the RT Savannakhet V1 Wind Power Project (880 MW) of RT Energy Pte.Ltd and the Saravane ARL1 Wind Power Project (380 MW) of Adani Renewable, to meet the deadline (quarter IV/2025), the investor also proposed to self-invest in the construction of the entire 500 kV line from Xebahieng to the 500 kV Huong Hoa transformer station, including the part in Vietnam (about 20 km)...

Is the wind calm?

In response to the news that wind power purchase prices will decrease from 2026, according to energy expert Phan Xuan Duong, if the project cannot reach the target by January 1, 2026 to have the opportunity to enjoy the electricity price with a ceiling of 6.95 US cents/kWh, "it will be a challenge for investors when the electricity price decreases as recently proposed by EPTC".

Speaking to reporters from Dau Tu Newspaper, Mr. D.L., who is investing in a number of wind power projects in Laos, said that investors are willing to invest in transmission lines to Vietnam's connection stations because they see an opportunity to make money if the ceiling price is 6.95 US cents/kWh and the electricity is guaranteed for 20 years.

“In wind power areas, wind speeds above 7.5 m/s are good. The Savan area is quite good, with speeds above 8 m/s and steady, so the efficiency is up to 40-48%. Thus, each year, wind power projects here can operate for 3,800-4,200 hours, which is very good,” Mr. D.L. shared.

In addition, the cost of investing in wind power is no longer as "sky-high" as before, especially with equipment from China.

According to some wind power investors, in the period of 2019-2020, the highest price of wind power equipment from European countries was offered at about 1 million USD/MW, and when it was cheap, it was also about 870,000 USD/MW. Even the equipment of some Chinese companies at the peak stage to reach the FIT price target before November 1, 2021 was also 600,000 USD/MW.

But since the end of 2023, many wind power projects in Laos have received offers from wind power equipment suppliers from China at only about 380,000 USD/MW. Not only that, the equipment suppliers also offer very attractive conditions such as: only need to deposit 15%, pay another 10% when receiving the goods and are willing to pay in 2 years with very low interest rates.

Therefore, it is understandable that investors proactively apply to build transmission lines to quickly reach the finish line before 2026.

Regarding the recent proposal to reduce wind power prices by EPTC, Mr. D.L also said that there are still businesses that can do this level, but there must be conditions attached. That is, the equity/loan ratio must be at least 40/60. If the equity is higher, it is even better and the business must be methodical.

“Investors who intend to play the game of catching a thief with their bare hands, frying it with their own fat, or just spending money to run the project and then raising the EPC contract price to borrow more, then selling the project, regardless of the future buyers, will not easily participate,” said Mr. D.L.

According to the assessment of the Ministry of Industry and Trade, when importing wind power from Laos, Vietnam will reduce the initial investment capital required, as well as not having to have solutions to minimize environmental impacts on the project site, but on the other hand, increasing the purchase of electricity from renewable energy sources such as wind power is said to put pressure on the power system during operation./.

baodautu.vn

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