German firm eyes $4.5B wind power project in Vietnam

The company, with 25 years of experience developing onshore and offshore wind power projects, wants to build a 2,000-megawatt plant in three phases, its executives told authorities of Binh Dinh Province Tuesday morning.

The project is set to contribute 7.1 billion kilowatt-hours to the national grid annually.

It will add the state coffers VND1.6 trillion (US$63 million) in taxes each year.

Binh Dinh, with a 134-kilometer coastal line, is considered an ideal place for wind power development.

However, the absence of a comprehensive legal framework for this type of energy in Vietnam has prevented any wind power project from receiving official investment licenses.

Nguyen Tuan, head of commerce at PetroVietnam Technical, a service provider under state-owned PetroVietnam, said that without a legal framework and breakthrough policies, the country will not achieve its target to have 6,000 megawatts of wind power.

"It costs billions of dollars to develop one gigawatt of offshore wind power. Without incentives, investors will walk away," he told a recent forum.

He proposed incentives in land and water surface fees, corporate income tax, and loans.

Apart from PNE, other investors have previously expressed interest in offshore wind power projects in Vietnam.

Denmark’s CIP proposed the La Gan offshore wind project with a capacity of 3.5 gigwatts in Binh Thuan.

More than two years ago, 36 domestic investors sought permits for offshore wind surveys.

But the Ministry of Natural Resources and Environment halted approvals due to legal issues.

The World Bank estimates that Vietnam’s offshore wind power potential is around 600 gigawatts. This energy source could supply 12% of the country’s total electricity output by 2035.