Wind power investors claim bankruptcy looms without incentive tariffs

By Anh Minh January 6, 2022 | 01:30 am PT

A wind power plant in the southern province of Soc Trang that could not meet the October 31, 2021 deadline for incentive tariffs. Photo by VnExpress/Phung Anh

Wind power companies said if the government does not extend the October 31, 2021 deadline for the incentive feed-in-tariff for electricity they face the threat of bankcruptcy.

In a letter they sent recently to various government and National Assembly agencies, wind power developers sought to explain why they many were unable to meet the deadline.

The Gia Lai Wind Power Company for instance was delayed by nearly half a year since its equipment was stranded at a port for four months due to the prolonged restrictions on the movement of goods and people in southern provinces amid Covid-19 lockdowns.

Besides, foreign technical experts could not come to Vietnam because international commercial flights had been halted and quarantine for people arriving by special flights was lengthy.

Mai Nguyen, deputy director of Hanbram Wind Power Joint Stock Company, said the pandemic delayed his firm’s plant in the central province of Ninh Thuan by five months and only a third could be completed before the dealine.

"Covid-19 outbreaks [also] led to difficulty in arranging financing because banks were slow or stopped disbursing".

According to investors, the average cost is VND45 billion ($1.9 million) per megawatt and plants with a total capacity of 4,100 MW did not meet the October 31, 2021 deadline.

Bui Van Thinh, president of the Binh Thuan Wind Power Association, said around half the planned projects did not meet the deadline.

Many countries like Germany and the U.S. have declared force majeure due to the global pandemic and have policies to bail out wind power businesses and investors facing difficulties.

In Vietnam, businesses, local administrations and others bodies in the energy industry have called on the government and National Assembly to extend the deadline for the FIT price by three to six months.

The FITs, the price producers get for their power, for offshore and onshore wind power are 9.8 cents and 8.5 cents per kilowatt-hour for 20 years. But these rates are only paid to producers who began commercial generation before Nov. 1.

The tariffs for plants built subsequently have not been announced yet.

Wind and solar power started to boom since 2017 thanks to the FIT incentives.

The country now has a capacity of over 16,000 MW of solar power and 4,100 MW of wind power. Renewables (solar, wind, biomass...) account for 22,000 MW or 25 percent of total power supply.