Vietnam's southern province to get $4 bln investment in clean energy

Vietnam's southern province to get $4 bln investment in clean energy

Vietnam's southern province of Binh Thuan is set to receive a new wave of
investment worth over VND90 trillion ($4 billion) in renewable energy,
reinforcing it as the focal point in the country's push for clean energy to
keep up with increased energy consumption.

The investment is part of pledges announced at a conference Wednesday by
nearly 30 domestic and foreign enterprises in various fields, which also
include tourism, agriculture and high tech industry, with the total value of
over VND126 trillion.

The renewable energy projects, mainly in two districts about 200 kilometers
(120 miles) east of Ho Chi Minh City, include a solar power plant invested
by Vietnam Electricity group and the $2.2 billion Son My 1 gas-fired power
project by a French-Japanese venture.

A new array of electricity projects is expected to propel Binh Thuan to
become Vietnam's major energy center, with capacity totaling more than
12,000 megawatt, or nearly a quarter of the country's total power generation
by 2020, said Chairman Nguyen Ngoc Hai of the provincial People's Committee.

He said Binh Thuan has favorable natural conditions suitable for electricity
generation, such as low rainfall, many sunshine hours and an impressive
system of lakes and major rivers. It has built coal-fired and liquefied
gas-fired plants along with hydropower, wind power and solar power.

Ba Ria-Vung Tau Province, Binh Thuan's southern neighbor, has already become
the country's power hub, mainly in thermal power generation and offshore oil
and gas production

Under Vietnam's latest power development master plan, the country's total
wind power capacity would increase to 800MW by 2020, 2,000MW by 2025 and
6,000MW by 2030, much of which would be contributed by Binh Thuan.

But skepticism remains in the Binh Thuan Wind Power Association.

Chairman Bui Van Thinh of the association said it often takes a long time to
obtain investment licenses for wind power projects while investors have been
facing problems with access to credit and investment returns.

He said the current low electricity price would prompt Vietnam to miss its
power capacity target in the next three years.

High installation costs and relatively low power prices have been
discouraging investors to join Vietnam's wind energy market. The current
buying price at 7.8 U.S. cents/kWh is well below that in other Asian
countries, such as 20 cents in Thailand, 29 cents in the Philippines and 30
cents in Japan.

Prime Minister Nguyen Xuan Phuc said Wednesday he has signed a directive to
increase the solar power price to 9.35 cents, which will take effect between
June 1, 2017 and June 30, 2019.

The directive also mentions other incentives relating to capital, land,
import tax and corporate income tax. For instance, solar power projects are
exempt from duties on goods imported to create fixed assets.

While some investors have previously said the solar power price should be
set at 10 cents per kWh or higher to ensure profits, they could still make
some profit at the new price, partly because solar power generation costs
have been on decline in recent years.

Vietnam is trying to generate enough energy for growth and for millions of
people who still lack access to electricity while gradually shifting towards
clean and low-carbon energy.

Last year the government revised down the output target of coal-fired power
plants to 53.2 percent of the total power generation by 2030, from 56.4
percent previously projected.

Vietnam now aims for 10.7 percent of the total electricity output by 2030
generated from renewable energy, mainly solar and wind energy, up from 6
percent previously planned.

--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---

Link to Original Article:
http://e.vnexpress.net/news/business/vietnam-s-southern-province-to-get-4-bl
n-investment-in-clean-energy-3573221.html

--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---

John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com