Prerequisites for perfecting the legal framework.

Việt Nam•21/02/2024

Wind turbines of the Bac Lieu Wind Power Plant (Bac Lieu province). Photo: Xuan Tu

Shortcomings arising from a lack of regulations.

In early 2024, the Government and relevant ministries and agencies continued to study the removal of difficulties and obstacles for offshore gas and wind power projects under the National Power Development Plan VIII. Deputy Prime Minister Tran Hong Ha affirmed that resolving the obstacles of gas and wind power projects is related to achieving the goal of ensuring energy security, serving socio-economic development, and attracting investment.

According to the plan, from now until 2030, the total additional capacity from gas-fired power projects (30,424 MW) and offshore wind power projects (6,000 MW) will account for approximately 50% of the total additional capacity needed, playing a crucial role in supplying electricity to the national grid. Gas-fired power projects are flexible and stable base-line power sources that will support wind and solar power projects to ensure electricity supply security. Furthermore, the development of gas-fired and offshore wind power will help Vietnam fulfill its commitment to carbon neutrality by 2050.

However, based on practical experience in negotiating and implementing gas-fired power projects, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan stated that there are still three obstacles that need to be overcome but are not clearly stipulated in the law, including the guarantee of minimum gas production, the mechanism for transferring gas prices to electricity prices, and the mechanism for purchasing gas in line with global trends.

With offshore wind power projects, many shortcomings are emerging due to a lack of synchronization and uniformity in legal regulations regarding the allocation of sea areas to organizations and individuals using non-state budget funds for investigation, surveying, exploration, and measurement; the allocation of sea areas to foreign investors; bidding and investor selection; overlap and conflict with marine exploitation and utilization activities; access to credit, transmission systems, and electricity price negotiations; and ensuring national security and defense…

In mid-2023, the Ministry of Industry and Trade held a meeting with provinces that have liquefied natural gas (LNG) power plant projects under the Power Development Plan VIII to identify and assign relevant units to resolve obstacles and shortcomings. However, to date, these projects still face many barriers related to mechanisms and policies, requiring consideration and resolution through established procedures as quickly as possible.

Early implementation of the pilot program

To address the above issue, Vice Chairman of the State Capital Management Committee at Enterprises, Ho Sy Hung, proposed piloting offshore gas and wind power projects to gain practical experience and propose amendments and additions to improve the legal framework.

Leaders of the Ministry of Industry and Trade also stated that investing in offshore gas and wind power projects is a new field; current regulations are either absent or unclear, therefore, a policy mechanism needs to be developed through pilot projects. Many ministries and sectors have suggested that, in the short term, it is necessary to research and consider assigning state-owned corporations and companies, such as Vietnam Electricity Group (EVN) and Vietnam National Oil and Gas Group (PVN), to investigate, survey, measure, and determine the potential of offshore wind power.

Deputy Prime Minister Tran Hong Ha stated that the Power Development Plan VIII serves as the basis for investing in power generation, transmission, and load projects, ensuring energy security and safety to serve socio-economic development. Based on this, the State will "commission" and select the best and most efficient investors. Responding to feedback from ministries and agencies, the Government directed the early piloting of several offshore wind power projects. "In the pilot project, the principle is to assign a state agency to use budget funds for surveys; thereby piloting the authority to grant licenses, manage survey data, select investors, and the mechanism for budget reimbursement," Deputy Prime Minister Tran Hong Ha emphasized.

In the coming period, the Ministry of Industry and Trade, the Ministry of Planning and Investment, and energy corporations will review and examine the entire investment procedure for gas-fired power projects, including the long-term, principled commitments of the Government to investors; and propose methods to reduce the time required for investment procedures.

Regarding the direction for resolving difficulties and shortcomings in offshore wind power projects, based on initial assessments of potential, the Ministry of Industry and Trade will also coordinate with other ministries and agencies to develop a pilot project using state budget funds for exploration, investigation, and surveying. After obtaining complete data, several state-owned corporations will be assigned the task of leading and may select foreign investors to implement some projects, including piloting measures to address current obstacles…

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