The report entitled "Vietnam Offshore Wind Competitive Investor Selection Study" aims to share the industry's view on a potential comprehensive regulatory framework that could help to push offshore wind projects forward.
The proposed framework includes exclusive site survey licensing, a bankable power purchase agreement (PPA), and clear permitting processes, among other things, that provide a clear route to market for offshore wind in Vietnam.
The government of Vietnam has committed to an offshore wind development target of 6 GW by 2030 and between 70 to 91.5 GW by 2050. According to the report, Vietnam can procure renewable energy more cost-effectively if it adopts the proposed two-stage competitive model for offshore wind development in the market.
Stage 1 of the proposed model recommends the award of exclusive survey rights, allowing offshore wind investors to freely define site boundaries within larger areas outlined in Vietnam’s national marine spatial plan (NMSP). Large capacity awarded to multiple projects in the first rounds can help create a diverse and competitive pipeline. With exclusive survey rights granted for at least 10 years, this caters for attrition in project commitments. In addition, the award criteria for projects would focus on the understanding of context, project feasibility, risk identification, and the developer’s capability to build the projects instead of merely looking at price assessment. Capped and balanced bid and performance bonds will also be adopted to ensure bid commitments.
Stage 2 involves the award of a PPA with Vietnam Electricity (EVN) and a price-only competitive selection. To ensure competition, each investor would bid their own site on a pay-as-bid basis. A 20-year PPA with EVN would be awarded without any changes in the price and, to enhance bankability, a total or partial indexation to inflation and foreign exchange are recommended if denominated and paid in Vietnamese dong.
The proposed investor selection model also includes a balanced risk allocation among the Vietnamese government, electricity ratepayers, and investors. If implemented, this well-structured, competitive investor selection regime would attract substantial investor interest and accelerate the development of offshore wind projects in Vietnam.
Vietnam could also take this opportunity to strengthen its supply chain and ensure continuity of offshore wind projects with survey licences. With a competitive labour market, extensive fabrication capabilities, and a robust local offshore oil and gas sector, stimulating domestic offshore wind demand would enhance export potential, drive economic development, and further reduce costs.
This report, developed GWEC with widespread industry consultation, also including case studies from Japan, Taiwan and elsewhere, provides a roadmap to successful future competitive procurement of offshore wind.
