The Ministry of Industry and Trade (MoIT) has appealed to the Government for a wind power price hike, arguing that this would help boost production at the country’s wind farms.

The MoIT’s newly proposed price for each kilowatt of wind power is 8.77 US cents on land, and 9.97 cent at sea. The current production cost for each kilowatt of wind power is 7.28 cents, with the estimation for 2020 at 9.94 cents per kilowatt.

The new rates will be applied until the end of 2020, and are considered relatively cheaper than the region’s average.

The MoIT says the proposed new rates are considered an insignificant step and fall under the Electricity of Viet Nam (EVN)’s plan to increase production cost.

According to the MoIT, these suggested rates have been calculated based on scenarios and databases in accordance with global technological trends and prices. Not only would they help encourage the use of more state of the art wind turbines, they would also help the industry adopt power lines of longer diameters, in line with global standards, and improve productivity.

The MoIT took into account a report from 23 wind farm projects, considering cost and efficiency, as well as the operational actuality at two projects already in action using modern technology in Viet Nam, Phu Lac 1 with 24 megawatts produced annually and Bac Lieu with 99.2.

The buying prices for these two wind farms are currently 7.8 cents per kilowatt and 9.8 cents per kilowatt, respectively.

The MoIT plans to invest up to $1,600 per kilowatt of wind power inland, at a 29 per cent rate of capacity factor. The estimated annual actual cash operation, maintenance and administrative costs (O&M) are around $20,000 per megawatt.

Any other wind power project at sea should receive around $2,100 per kilowatt per year, at 32 per cent capacity factor and an estimated annual O&M cost of $25,000 per megawatt.

According to the MoIT, this is on the low end in terms of expected costs for commercially encouraging the development of wind power projects, especially with the use of domestically generated parts and services.

The national goal for the development of wind power within the scope of the National Power Development Master Plan is that power plants worth around 800 megawatts of wind power will be installed by 2020, which will then be increased to 6,000 megawatts by 2030.

The MoIT hopes to increase the ratio of wind power in the national power grid to 0.7 per cent by 2020, and 2.4 per cent by 2030, 80 per cent of which will come from inland wind turbines and 20 per cent from sea.

As of the second quarter of 2017, Viet Nam’s potential wind energy amounts to 513,360 megawatts, six times the amount generated by thermal or hydraulic power plants in 2020. — VNS