Project Description
Background
Due to the high economic growth rate of Vietnam, there is a high increasing power demand. Between 1998 and 2009, installed capacity of power increased from 5,000 MW to 18,480 MW. According to the draft of national power development master plan number VII, electricity demand is expected to continue to increase by 14-16%/year in the period 2011 – 2015, about 11.5%/year in period 2016-2020 and about 7.4%-8.4%/year in period 2021-2030.
This situation has caused serious electricity shortages in recent years. Regarding to the average annual growth rate, it needs at least 1,700 MW of new capacity to come on stream every year to meet demand.
In order to be able to maintain the country's impressive economic growth rate, the Vietnamese government has decided to use renewable energy sources for electricity generation. According to the Decision No. 1208/QĐ-TTg was issued on July 21, 2011 by the Government, on development plan of national electricity in the period 2011-2020 and outlook 2030, the Government has set the target of increasing the renewable energy rate at about 3.5% of the total electricity production by 2010, about 4.5% by 2020, and about 6.0% by 2030.
With a long coastal line of more than 3,000km, Vietnam has been evaluated to have relatively good conditions for wind energy. There are different statistical wind data from different sources stating the wind potential of Vietnam from 1,785 MW (study of Electricity of Vietnam Corporation) to 10,000 – 20,000 MW (study of other Vietnamese Institutes) and 521 GW (Study of World Bank, 2000). A thorough assessment of wind potential of Vietnam is extremely essential.
Recently Vietnam Renewable Energy Joint Stock Company (REVN) finished the first part of a wind park with the total capacity of 120MW in Binh Thuan Province. So far, 20 wind turbines of REVN with capacity of 1.5MW per turbine have been installed and connected to the national power grid. Additionally, there are currently 42 wind power projects with total capacity of 3,906 MW being developed at various stages.
Objective
To establish a legal framework and improve technical capacities for grid-connected wind power development in Vietnam.
Implementation
In order to address the different barriers to the development of the wind energy market, the project focuses on four areas:
1. Establishing the legal framework for grid-connected wind power
The project has been supporting the Ministry of Industry and Trade (MoIT)- Energy Department in developing regulations for various aspects of wind power development in Vietnam.
The project has involved a pool of consultants such as Duanne Morris and Fichtner as international consultants and the Institute of Energy from Vietnam as national consultant to work together to develop a study on the Regulatory Framework for wind energy development in Vietnam. In June 29th, 2011, the Prime Minister of Vietnam approved the decision number 37/2011/QD-TTg on wind power project management in Vietnam which will take into effect from August 2011.
The decision has set a feed-in tariff equivalent to 7.8 UScent/kWh for electricity generated from wind. Furthermore, wind private developers can benefit from land use and tax incentives.
2. Wind power planning
The project's second component is designed to help introduce and implement ecologically oriented planning processes for wind power projects.
With involvement of Bosch & Partner from Germany as international consultant and PECC3 as national consultant, the project has supported Binh Thuan Province on developing Wind Power Planning, providing MapInfo training course for wind power planning and digitalizing the provincial administration and planning map.
Based on the wind power planning case of Binh Thuan province, the project has developed the Wind Power Planning Guidelines with support from Bosch & Partner and PECC3. It is particularly made to guide other provinces and their authorities through the planning process of wind energy projects. It contains methodologies for identifying suitable sites for wind power projects as well as procedures of wind power development planning, management, and the technical supervision of implementation.
In addition, with the increasing request from international organizations, institutes and private developers concerning wind power development in Vietnam, the handbook of “Information on Wind Energy in Vietnam” has been developed and released. This is the result of collaboration between GIZ and MoIT. It contains information for investors and others who are interested in wind energy in Vietnam. Among others the handbook provides details about the current policy frame work, wind energy potential, investment procedures for wind projects, analysis of opportunities for developing wind energy as CDM project, and financing possibilities.
The two handbooks “Wind Power Planning Guidelines” and “Information on Wind Energy in Vietnam” have been made available at www.windenergy.org.vn
3. Capacity development and consulting services for selected wind power projects
Insufficient knowledge about grid-connected wind power is impeding the further development of projects at all levels. There is a lack of technical and economical know-how and qualified personnel. This component will thus center on training workshops that deal with specific issues such as awareness-raising about wind power among political decision-makers, equipment maintenance and wind measurement in accordance with international standards.
In the past two years, three training courses on fundamentals of on-shore wind energy, wind measurement, and GIS Map info (geographical information software) were organized by the project with 46 participants. Additionally, 7 government officials have been sent to Germany in the purpose of training on grid connection for renewable energy.
Furthermore, two study tours have been organized to Germany in 2008 and to China in 2010 for Vietnamese delegations including officials from various Ministries to study wind energy development in Germany and China, two leading countries in terms of wind energy development.
The project also co-organized the International forum on Wind Energy Development in Vietnam at the VE-Expo 2009 as well as the Binh Thuan Wind Power Planning Workshop in 2010. The project participated in GreenBiz 2009 and in EnerExpo 2010.
4. Wind measurement
With a long coastal line of more than 3,000km, Vietnam has been estimated to have good wind condition. However, until now, a reliable wind atlas of Vietnam has not yet been completed. Accurate and reliable wind data is critical not only to wind private developers to ensure return on investment but also to the government to develop wind power planning.
The project will erect 10 masts with the height of 80m at 10 sites to collect wind measurement data for one year. With other three masts sponsored by World Bank Project, Vietnam will have 13 wind masts in compliance with international standard scattering from the North to Center to the South aiming at developing a complete wind atlas for Vietnam.
Intended Impacts
The project is expected not only to have a positive impact on social and economic development, but also to produce environmental benefits.
- Expected ecological impacts
Increased power generation can contribute to climate protection by preventing greenhouse gas emissions. A 15 MW wind park avoids the 45,000 tons of CO2 emitted annually by a comparable new-build coal-fired power plant. In addition, it can prevent local environmental damage, such as the leaching of diesel and lubricants into soil.
- Expected socio-economic impacts
Vietnam's energy production capacity increases with the construction of each new wind power plant. Energy shortages can be reduced while existing and prospective energy demands for consumption or production purposes can be met. Furthermore, wind energy as a new industrial sector can contribute to the creation of jobs and economic growth. Incomes can be stabilized and additional income generated. Greater use of the economic potential of renewable energy is an important, future-oriented element of sustainable energy production.