RENEWABLE ENERGY AND WIND ENERGY DEVELOPMENT IN VIETNAM MINISTRY OF INDUSTRY AND TRADE The General Directorate of Energy RENEWABLE ENERGY AND WIND ENERGY DEVELOPMENT IN VIETNAM Pham Trong Thuc Director, Department of New and Renewable Energy November 2015

Main contents Overview Wind power development: 1.1. Power sector development 1.2. RE development policies and targets Wind power development: 2.1 Potential and Supporting mechanism 2.2 Supporting mechanism 2.3 Current situation 2.4 Challenges Action plans for wind power development

1. Overview 1.1. Power sector development 2014 Others Imported CCGT Gas fired Oil fired Coal fired Hydro Total installed capacity by Dec. 2014: 34 GW (peak load 22. GW) 42% of installed generation capacity comes from renewable energy and hydro power projects

1.1. Power sector development 2014 P installed = 11.6 GW Generation Type 2005 Gas turbine: 45% Hydropwer: 38% DO-based thermal: 2% Coal based thermal: 13% Generation Type 2014 Hydropwer: 40% Gas turbine: 22% Coal based thermal: 28% Gas based thermal: 1% Imported: 2% Diesel + Wind: 5% P installed = 34 GW DO based thermal: 2%

1.2. RE development policy and targets Reasonable for RE development in Vietnam Sustainable development Challenges in Power generation Increasing coal import for 2015-2030 Increasing electricity import Exhausting of hydro power resource Greatly fluctuated price of fossil fuel High potential on RE resources in Vietnam Decreasing trend of production cost Local manufactures???

1.2. RE development policies and targets The National Strategy on Green Growth approved in 2012: ‘‘Development of a low carbon economy on sustainable basis, emission reduction and increase in greenhouse gases (GHGs) absorption” Reduce GHGs factor down to 266 million tones of CO2 Energy field decreases to 141,1 million tones CO2 (53%) by 2020.  Promote effective exploitation and increase the proportion of new and renewable energy sources in the nation’s energy production and consumption are of key solutions

Generation structure in 2025 Generation structure in 2030 1.2. RE development policies and targets (to be continued) Power development Plan – PDP VII RE in generation mix to 2030 (draft revised PDP VII) Generation structure in 2025 Coal based thermal: 58% Gas turbine + DO: 19% Small Hydro + renewable: 4% Nuclear Power Imported: 2% Hydro power: 25% P installed = 85 GW Generation structure in 2030 Coal based thermal: 60% Gas turbine + DO: 18% Small Hydro + renewable: 5% Nuclear Power: 4% Imported: 1% Hydro power: 12% P installed = 116 GW

1.2. RE development policies and targets (to be continued) RE share of electricity generation (In present PDP No7) For small hydro, wind, solar and biomass to 4.5 % of totalled installed generation capacity by 2020 and 6.0 % by 2030; Wind power generation: up to 1 GW by 2020, 6.2 GW by 2030; Biomass energy: up to 500 MW in 2020 and 2 GW by 2030; PV Power (draft): up to 2000 MW for large PV solar farm; up to 4000 MW for solar rooftop RE electricity supply for remote areas, islands by RE off-grid Projects 21,300 households; Investment capital 1,481 bill VND or 70.5 mill USD.

2. Wind energy development 2.1. Potential – Theoretical Theoretical Potential for Wind Power Mean speed at 80m height (m/s) Estimated Developable Land Area (km2) Theoretical Potential (MW) <4 95,916 959,161 4-5 70,868 708,678 5-6 40,473 404,732 6-7 2,435 24,351 7-8 220 2,202 8-9 20 200 >9 1 10 Tổng 209,933 2,099,333 Source: Wind Resource Atlas of Vietnam, WB report 2010 (assumed average density of 10MW/km2)

2. Wind energy development 2.1. Potential – Planning development 22 provinces with potential area of 116.670 km2 Source: Wind Atlas 2010

2. Wind energy development 2.2. Development Plan and Supporting mechanism for WPP Development Plan Draft Master Plan for potential development area of wind energy Provincial Development Plan for Wind Power Bình Thuận, July 2012: up to 700MW by 2020; Ninh Thuận, April 2013: up to 220 MW by 2020; Sóc Trăng, May 2014: up to 200MW by 2020; Bến Tre, March 2015: up to 150 MW by 2020; Quang Tri, June 2015: up to 110 MW by 2020

2. Wind energy development 2.2. Development Plan and Supporting mechanism for WPP Regulations and supporting mechanisms for WPP Decision No. 37/2011/QD-TTg issued by the Prime Minister dated 29/6/2011on mechanisms to support development of wind power projects. Power purchase responsibility: EVN must take and pay electricity generated from WPP FIT for grid-connected wind power project: 7.8 US$/kWh (VAT exclusive; subject to VND/USD fluctuation) Circular No. 32/2012/TT-BCT dated 12/11/2012 promulgating implementation of WPP development and standard PPAs for wind power projects. Procedures for development of wind power projects Application for price support from VEPF. Registration sequence for the development of off-grid wind power projects. SPPA for wind power projects Circular No. 06/2013/TT-BCT dated 8/3/2013 promulgating content, order, procedure for formulation, appraising and approving wind power planning

Supporting mechanism for WPP 2.2. Development Plan and Supporting mechanism for WPP Other supporting mechanisms for WPP Import tax: Import tax exemption for equipment which is not domestically manufactured. Corporate income tax: Tax rate: 10% for the first 15 years, possible extension up to 30 years Tax exemption for the first 4 years, 50% reduction for next 9 years Fast depreciation: 1.5 times faster than normal projects. Exempt land-use tax/charges. Exempt environmental protection fees.

Developers: about 50 sites 2. Wind energy development 2.3. Current situation Development of Atlas for RE/wind energy resource potential 2015 - 2016 Measurement situation MOIT/WB program 2010 MOIT/GIZ program 2012 - 2015 MOIT/KfW program 2016 - 2018 Developers: about 50 sites

Approved Capacity (MW) 2. Wind energy development 2.3. Current situation Wind power projects - current situation   Name Approved Capacity (MW) In operation (MW) COD Current situation BINH THUAN 700 1 Phong điện 1 - GĐ 1 30 2009 2 Phong điện 1 - GĐ 2 90 2016 A 3 Phú Lạc - GĐ 1 24 III/2016 U 4 Phú Lạc - GĐ 2 26 2018 5 Phú Quý 6 2012 Thuận Nhiên Phong 32 7 Phước Thể L NINH THUAN 220 8 Điện gió Công Hải 47 12/2015 9 Điện gió Trung Nam 11 Điện gió Mũi Dinh 6/2015 SOC TRANG 200 12 Điện gió Trasesco - EAB 65 IL 13 Điện gió Âu Mỹ 40 BEN TRE 150 14 Điện gió Thanh Phong 29.7 2017 F 15 Điện gió Hàn Quốc - Bến Tre 60 16 Điện gió Bình Đại-BT GĐ1 17 Điện gió Bình Đại-BT GĐ2

2. Wind energy development 2.3. Current situation Wind power projects - current situation QUANG TRI 110 18 DA Hướng Linh 30   2017 A BẠC LIÊU 17 DA Bạc Liêu- GĐ 1 16 2013 O DA Bạc Liêu- GĐ 2 83.2 1.6 2015 U LÂM ĐỒNG 19 DA Cầu Đất- GĐ 1 BÌNH ĐỊNH 20 DA Phương Mai 1 21 DA Phương Mai 3 22 DA Nhơn Hội 61.1 1,380 993 53.6 O: Under operation; U: Under construction; A: FA approved; F: FS Preparation; L: Land acquisition; IL: Investment license given

2. Wind energy development 2.4. Constraints and shortcoming National reliable, systematic and consistent database. Economic and financial aspects: Investment costs for RE projects are higher than those for conventional energy projects in Vietnam. Technical human resource: At present, no RE discipline can be found in universities TVET institutions, creating a big gap of human resources for this new “green” technology area. Technical infrastructure: Vietnam’s infrastructure (roads, bridges, power system, traffic equipment, etc.) is out of date. Goods transportation is of great difficulties. National grid connection Supply of auxiliary equipment and services: most main and auxiliary equipment for RE is not localized. For wind power, some manufacturers can be found in the domestic market, such as GE US, CS Wind Tower Korea, etc., but all their products are exported to the world market. Implementation arrangements

3. Action plan for development of WPP Developing the spatial map on Renewable energy including wind energy Review and assesment of prevailing mechanism and suggestion for new FIT: 2015 – 2016 Developing the national standard for wind energy technology equipment: 2016 - 2020 Building the mechanisms to support development of local equipment production filed and services in the solar energy field; Assessment of status: 2016 Research and proposal on supporting mechanisms: 2017 - 2018 Implementing capacity building programs for PBs, universities and vocational training units: 2016 - 2020

Thank you!