Due to the country being in a favourable geographical position for the development of wind power sources, with a monsoon climate, it’s weather is largely shaped by a coastline of more than 3,000 km.
Indeed, 39% of Vietnamese territory receives wind speed greater than 6m/s, equivalent to a consistent wind power output of 513 GW, of which roughly 10% is considered to boast huge wind power potential and is located in the nation’s central and southern provinces, in addition to the Central Highlands.
With traditional energy resources such as fossil energy being gradually exhausted and polluting the environment, falling reserves of crude oil, traditional oil, and gas fields such as Bach Ho, also known White Tiger, Su Tu, also known as Lion, Rong, also known as Dragon, and Ruby, the question of boosting electricity production from renewable energy sources has become an inevitable trend.
With the preferential feed in tariff price mechanism extended for an additional two years, it will serve to create a driving force for the local wind power market to develop following a period of slowdown caused by low prices.
According to economic experts, wind power has great potential and will be an important source of electricity that contributes to ensuring energy security ahead during the 2021 to 2025 period, thereby making up for shortages as a result of many other major power projects that are currently behind schedule.
Dr. Vo Tri Thanh, former vice president of the Central Institute for Economic Management, shares, “Clean energy and renewable energy is a new area that has received attention in recent years. The Electricity of Vietnam determines that from 2020 to 2023, there will be a dire shortage of electricity if the implementation of major projects continues to fall behind schedule.”
This lack of electricity could pose a threat to national production and the business situation, causing a double dose of difficulties for the Vietnamese economy. In addition to solving the nation's long-term energy problems, promoting the development of offshore wind power and the marine-based economy can contribute to protecting national security, sovereignty, territorial waters, and attracting plenty of financiers from different nations globally.
Understanding the domestic market's demand for renewable energy, numerous local firms have become involved in this highly lucrative field, including Trung Nam Group, BIM Group, Xuan Cau Group, Pacific Company, FECON Company, Thanh Cong Group, BCG Bamboo Capital, Truong Thanh Group, and Ha Do Group.
According to an assessment conducted by PetroVietnam Securities Joint Stock Company, the development of renewable energy will be part of an indispensable trend globally moving forward, with it developing into a major part of the country’s energy sources.
Most notably, electricity demand is anticipated to continue to increase sharply over the course of the coming years in order to serve production activities once the country has officially joined both the the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA). Moreover, the nation is keen to be regarded as a key market that benefits from the shift in production of global firms amid escalating trade tensions between the United States and China.
In the listed stock market, there are approximately 30 enterprises capable of producing electricity, the majority of which operate in coal-fired thermal, gas thermal, and hydroelectricity.
However, these firms are unlikely to be able to increase their capacity in the near future due to the impact of raw materials and hydrological conditions. Therefore, businesses that are keen on investing in renewable energy must be fully able to utilise opportunities for the development of the clean energy market, a sector that is considered to be a potential field that can serve to boost the revenue of firms in the time ahead.