Wind power turbines in southern Bac Lieu Province. A German organisation has urged the Goverment to develop a policy to encourage investment in wind power projects. — VNA/VNS Photo Duy Khuong

HA NOI (Biz Hub) — The Government needed to develop a policy that encouraged investment in wind power projects in order for the sector to progress, according to Germany's GIZ Macroeconomic Reform Programme.

In 2011, the Government issued Decision 37/2011/QD-TTg to support wind power projects with a target of reaching 1,000 megawatts (MW) by 2020 and 6,200MW by 2030, Le Tuan Phong, deputy head of General Department of Energy, said at a seminar held by the Ministry of Industry and Trade (MoIT) and the GIZ in Ha Noi on Thursday.

Phong said that since the decision, Viet Nam had attracted 48 wind power projects with a total capacity of 4,876MW. However, only three projects were operating at a total capacity of 52MW. The rest were still conducting feasibility reports, he was quoted as saying in the Thoi bao Kinh te Viet Nam (Vietnam Economic Times).

The MoIT and GIZ have conducted a survey to examine the issues investors have faced during the development of these projects, and asked the Government to support investors interested in developing the local wind power market.

According to GIZ experts, difficulties included the support policies for the development of wind power and its potential gains.

The survey also found that many local enterprises that lacked expertise in the field invested in projects believing they could get rich quickly.

Foreign investors who were informed of sector's potential also discovered that the wind capacity was less than required and cancelled their investments.

At the three operating wind power projects, experts said that with the average construction cost stood at US$2 million per MW of wind power with annual operation costs of $35,000 per MW, investors had suffered losses.

The GIZ also said that Viet Nam's wind power strategy should not have focused on investing in wind turbines at sea because construction costs were too high. The correct step would have been to prioritise building turbines on the coast that cost less.

The GIZ also said the Vietnamese Government should make land rent exempt for investors on the coast instead of building turbines at sea.

The government should help enterprises to access loans and offer credit guarantees, the GIZ survey said.

The Ministry of Finance should exempt them from the 10 per cent import tax for wind turbines, which pushes costs up.

Regarding the price of wind power sold to EVN, the GIZ suggested that the price should be increased to 10.4 US cents per kWh instead of the 7.8 cents investors are currently receiving. — VNS