Forum on Wind Energy Development between Germany and Vietnam, June 4 th, 2012, Ho Chi Minh City

Wind Energy Market development in Vietnam - Potentials and status quo Forum on Wind Energy Development between Germany and Vietnam, June 4 th, 2012, Ho Chi Minh City

1 Wind power resources and measurement in VN 2 Wind current application and manufacturers 3 Legal framework for Wind energy development 4 Wind power Planning in Vietnam 5 Investment Procedures 6 6 Barrier for Wind Energy Development in Vietnam Forum on Wind Energy Development between Germany and Vietnam, June 4 th, 2012, Ho Chi Minh City

Wind Resources Donors/ WB EVN MOIT-WB MOIT/GIZ Funding Study Wind Resource Atlas Wind Resource Assessment for Power Generation Wind Resource Atlas of Viet GIZ/MoIT Wind Nam Energy Project Year 2001 2007 2010 2012 On-going Methodology Potential res sults Simulative method of atmospheric numerical model AGL, 65m Theoretical : 513.360 MW Fair Potential : 401.444 MW Good Potential (7-8m/s) : 102.716 MW Very good Potential(8-9 m/s) : 8748 MW Excellent (> 9m/s) : 452 MW 10 sites measurement for one year. At AGL 60m Technical Potential : 1785 MW Leverage the two-year measurement campaign to create a more accurate and verified wind resource map. Measured wind Employ an enhanced at 10 sites, 40, modeling configuration, i.e., 60, 80m (AGL) higher resolution. Compare predictions with measurements from tall towers. <4m/s :956.161 MW 4-5m/s : 708.678 MW 5-6m/s : 404.732 MW 6-7 m/s: 24.351 MW 7-8m/s : 2.202 MW 8-9m/s: 200 MW > 9m/s : 10 MW NA yet a Promissing Area the Coastal, the Central Highland and the South The Central Coast (Quang Binh, Binh Dinh); South Central Coast (Ninh Thuan, Binh Thuan) Central Highland, Central Coastal provinces Remark The results are probably on optimistic side. Big uncertainty would cause errors in simulative calculation First big-scale measurement compaigne. Measurement at 3 sites. Observed wind resource is lower than predicted Produce wind data representative of Vietnam s areas using IEC No. 61400-12

Offshore wind power resources in Vietnam Few data on offshore wind resource based on: Wind data from meteorological stations at remote islands Average speed in several years at 10 m high h (m/s) No. Offshore Islands Average wind speed (m/s) 1 Bạch Long Vỹ (HP) 6.8 2 Trường Sa 58 5.8 3 Phú Quý (Binh Thuan) 5.5 4 Hoàng Sa 4.9 5 Hòn Dấu (Kien Giang) 4.6 6 Lý Sơn(QuangNgai) 4.4 7 Cô Tô (Quang Ninh)) 4.3 8 Hòn Ngư (Thanh Hoa) 3.7 9 CồnCỏ (Quang Binh) 3.7 10 Phú Quốc 2.9 11 Côn Đảo(VTCD) 2.6 Other Offshore wind measurement are : At Ly Son island at 60 m high, V average = 6m/s At Phu Quy island at 60 m high, V average > 9m/s

Total realizable wind energy potential Areas with good wind resource Wind Resources and Current status EVN (2007) : 1,785 MW WB (2010): 26,750 MW Expert s opinion: 10,000 20,000 MW Average wind speed in good areas is 6m/s at 60m height. The potential is higher in the central and southern region of the country (particularly in highlands, islands, and coastal areas), with about 880MW and 855MW, respectively. The potential is about 50MW in the northern region (EVN estimation). Total installed wind 30 MW (June 2011); 37.6 MW (March 2012) energy Ttl Total wind idenergy Over 40 projects in pipeline (by March 2012). projects in pipeline With total capacity around 3,000 4,000 MW. Renewable energy 5% by 2020 (2,900 MW) targett Wind energy target 11% by 2050

Wind measurement in Northern Vietnam Year Project Province Location Height V (m/s) Quang Ninh Mong Cai 50m 5.25 2005-2006 EVN/Wind Resource Assessment for Power Generation Nam Dinh Thanh Hoa Hai Hau 50m 6.47 Sam Son 50m 5.37 Ha Tinh Ky Anh 50m 6.07 2007-2008 Project/IE- Belgium Quang Ninh Quan Lan 60m 6 2003 Private /VMP Hai Do Son 60m 5.4 Phong 2007-2008 Project/IE- Belgium Dien Bien Tay Trang 40m 4.4 7 wind measure sites includes: 4 of EVN project, 2 of IE project and one of private investment project

Wind measure towers in EVN/Wind Resource 2005- Assessment for Power 2006 Generation EVN/Wind Resource Central 2006 Assessment for Power Generation Vietnam 2006 EVN/Wind Resource Assessment for Power Generation Quang Binh Hien Trung 60m 4.85 Quang Tri Nhi Ha 60m 4.91 Binh Dinh Phuong Mai 60m 6.14 Khanh Hoa Tu Bong 60m 4.58 2007 TOHOKU Quang Ngai Ly Son 60m 6.03 2010 WB/ Wind resource atlas of Viet Nam Kon Tum Pleiku 6103 60m 5.8 Lam Dong Duc Trong 40,60,80m, na Daklak EaHleo 40,60,80m na Daklak Eaphe 40,60,80m Phu Yen An Ninh Dong 40,60,80m 2011 GIZ/MOIT Wind project Phu Yen Song Cau 40,60,80m Binh Dinh Phu My 40,60,80m Gia Lai Mang Yang 40,60,80m 15 wind measure sites includes: 4 of EVN project, one of WB project, one of private investment project and 9 of GIZ/MOIT project Gia Lai Quang Binh Ia Grai Quang Ninh 40,60,80m 40,60,80m

Wind measure towers in Southern Vietnam 17 wind measure sites includes: 4 of EVN project, 2 of WB project, 10 of private investment project and one of GIZ/MOIT project 2006 EVN/Wind Resource Assessment for Power gen. Ninh Thuan Ninh Phuoc 60m 7.1 2009 EAB Ninh Thuan Phuoc Huu 70,5 6.9 2010 WB/ Wind resource atlas of Viet Nam Ninh Thuan Phan Rang 6101 60m 6.6 2008-2010 Private/AnPhong Ninh Thuan AP1 60m 59 5.9 Ninh Thuan AP2 60m 5.8 2010 WB/ Wind resource atlas of Viet Nam Binh Thuan Phan Thiet 6102 60m 6.1 2008 Private Binh Thuan (Hoa Thang) IMPSA01 60m 6.4 2008 Private Binh Thuan (Hoa Thang) IMPSA03 60m 6.4 2008 Private Binh Thuan (Hoa Thang) Thuan Nhien Phong 60m 6.4 2007 EVN/Wind Resource Assessment for Power gen. Binh Thuan Tuy Phong 60m 6.7 2004-2005 Private Binh Thuan Phu Quy 60m 9,2 2007 EVN/Wind Resource Assessment for Power gen. Lam Dong Xuan Truong 60m 6.8 Tra Vinh Duyen Hai 60m 63 6.3 2007/operating Carry out by PECC3 Ninh Thuan Thuan Bac 60m 2007/operating Carry out by PECC3 Ninh Thuan Phuoc Dinh 60m 2007/operating Carry out by PECC3 Binh Thuan Bac Binh 60m 2011 GIZ/MOIT Wind project Lam Dong Duc Trong 40,60,80m

Wind current applications Category Capacity range (kw) Quantity In operation Location Remarks Household - size 0.1-0.5 More 1000 Since 1999 Central coastal area No update on exact No. Isolated grid 1-50 11 2012 Offshore Islands Fast develop 30 1 1999 Hai Thinh, Hai Hau, Nam Dinh. 800 1 2004 Bach Long Vy island 2,000 3 2012 Phu Quy Island Hybrid wind- 2 1 2000 Dac Ha, Kon Tum Pilot solar Hybrid winddiesel Gridconnected 1,500 1,600 20 1 2011 2012 Tuy Phong, Binh Thuan TP Bac Lieu, Bac Lieu Technical issues for synch. Just erected

Wind farm REVN in Tuy Phong, Binh Thuan Wind turbine in Bach Long Vy island First wind turbine in Bac Lieu Three wind turbines in Phu Quy island

Wind turbine 2500 W at IE experimental labo Installation of the first turbine Xzeres 10kW tại Cam Ranh for isolated islands, August 2011. Hybrid system Wind-Solar at Dac Ha, Kon Tum, 2000

Stand alone wind turbines of 150-500W were manufactured during 1990s: Institute of Energy - 150W named IE-1700 have been developed and manufactured. Hanoi University of Technology - have manufactured some models of wind turbines for households h with the following capacity 150W and 500W. Research Centre for Thermal Equipment and Renewable Energy (HCM University) have manufactured turbine of 200-300W.

Large manufacturer and suppliers The GE wind generator plant in Hai Phong City, produces 1500 generators/y; The CS Wind Tower (100% owned by South Korea) )in Ba Ria Vung Tau, makes and exports wind towers 150 units/year; The VINA HALLA Heavy Industries (100% owned by South Korea) in Ba Ria Vung Tau, makes and exports 400 wind towers a year. UBI Tower Co., Ltd., in Hai Duong province, makes 300 wind towers/y

Legal framework for wind development At central level Government Government Asset owner Approve the electricity tariff Promulgate legal framework Approve PDP, Energy DP, nuclear facility MOIT MOIT Approve Local/regional DP, Hydro PDP Submit PDP, Energy DP to Government General Directorate of Energy Submit and appraise PDP, Energy DP, Local/regional DP, Hydro PDP to MOIT Management of such approved DP ERAV General Directorate Management of Power BOT projects Submit the plan/location/policy/manpower of Energy on nuclear power facilities to MOIT and Government ERAV Licensing Regulatory body in competitive power EVN/Electric Power Contract Outside EVN market Trading co., Electricity tariff and rates regulating BOT, IPP, JV on Power Generation or distribution At local level, the primary contacts for wind development are: Provincial People Committee (PPC) DOIT, DPI.

Legal framework for wind development Main supporting policy Renewable Energy Action Plan was developed by EVN and WB jointly. It set out a 10 year 1999 framework of international assistance to scale up the development and use of renewable energy for rural electrification and grid supply. Electricity Law was passed. It promotes exploitation and use of renewable energy sources for 2005. Under review in 2012 electricity generation. Provides incentives for investment, tax benefits in renewable energy projects and sets electricity tariffs. It particularly encouraged construction of decentralized grids and renewable energy power plants for local users in rural, mountainous and island areas. CDM provided rights and obligations of contractors and implementers. Subsidy provided for CDM 2007 projects in prioritized areas. PDP VI and VII, highlighted development of renewable energy for remote, mountainous, islands, 2007 & and border areas. 2011 National Energy Development Strategies for Vietnam up to 2020 and outlook to 2050: The share 2007 of renewable energy was set at 3% of total primary energy supply by 2010, 5% by 2020, and 11% by 2050. Joint Circular: Regulation on price subsidy for products from CDM projects including wind power 2008 generation. Regulations published with conditions and procedures for construction of renewable energy 2008 based small power plants connected to the national power grid. Decision No 37/2011/QD-TTg of the Prime Minister on incentives mechanisms to support the 2011 development of wind power projects in Vietnam Circulars on Wind development planning, Wind power investment, and PPA for Wind Under power drafting

Wind energy planning in Vietnam There was no Wind power development plan in Vietnam Renewable Energy development plan up to 2015 is under approval Power Development plan up to 2020 PDP7 is approved The first National Wind Power Development Plan is under preparation in 2012 Two provincial wind power development plans Binh Thuan, and Ninh Thuan have been commissioned but not approved yet. Other provinces will follow The fast-forward forward progress in Wind planning In early periods - Mostly focus on off-grid wind turbines PDP 6 (2007) - No specific mention about wind power The first DRAFT of RE development plan (2008) 0.8MW (2015); 30 MW (2020); 61 MW (2025) DRAFT of RE development plan (2010) 30 MW (2015); 30 MW (2020); 629 MW (2025, scenario 3) PDP 7 (2011) 1000 MW (2020); 2100 MW (2025); 6200 MW (2030)

Grid-connected wind power projects under development No Province No. of No. of Installed cap. Statust investors projects MW IR IP TD UC IO 1 Binh Dinh 2 2 51 2 2 PhuYen 1 1 50 1 3 Lam Dong 2 2 70 2 4 Ninh Thuan 9 13 1,068 8 4 1 5 Binh Thuan 10 12 1,541 6 4 2 6 BR-VT 1 1 6 1 7 Tien Giang 1 1 100 1 8 Ben Tre 2 2 280 2 9 Tra Vinh 1 1 93 1 1 10 Soc Trang 4 14 350 4 2 11 Bac Lieu 1 1 99 1 3 4 12 Ca Mau 5 2 2 300 2 7 6 8 9 11 10 12 TOTAL 36 42 3,906 27 11 1 1 2 Status: IR = Investment Report; IP = Investment Project Report ;TD= Technical Design; C=Under Construction; IO= In Operation. (Source : updated from Khanh N. data)

Gid Grid-connected d wind power projects under development 1 2 7 8 9 11 10 12 6 5 3 4

Common steps for project investment Country strategy & master plan Identification of the project Pre F/S and/or FS Procurement of good and EPC Design Procurement Basic design Technical design, Construction design Construction & installation Commissioning

Investment procedures for IPPs MOIT, MPI Peoples Committee PM, MPI People Committee A Pre-Investment Investment Approval Evaluation B Study (PFS) Feasibility Study Committee E Construction Investor D Approval to Construct C Investment License Appropriate Ministries Dept s MPI Peoples Committee Sign PPA EVN,PC

Investment Procedures Step Activities Authorities Pre-selected potential site A Pre-inve estment study Pre-survey on site Submit to PC for detailed assessment of potential site Receive the approval from PC Wind measurement ( about 12 months) PPC, MOIT, MPI PPC, MOIT, MPI

Investment Procedures Step Activities Authorities B Inve estment t appr roval Investment report Adding in PDP (Revised PDP approved) Project Investment report MPI, MOIT, PPC MOIT MOIT, DOIT, EVN h vity Establish ess activ C busine Operation license PPC Cor PM Register of Business Entity MPI, or DPI PPA can be signed (Connection report) EVN or Power Co.

Investment Procedures Step Activities Authorities D Approva al to Con nstruct Approval to construct Dept. construction Approval for land use, clearance and compensation Dept. Land and dpc Approval for importation DOIT, Dept. Custom Registration of personnel Dept. Labor Tax code Dept. Tax

Barriers for wind energy development in Vietnam From reviewing of studies, communications, WS and meeting, we can identify the following barrier groups: Group 1. Technological & technical Underdeveloped infrastructure No reliable data and measurement Lack of technical human resources Lack of indigenous technologies and ESCO Group 2. Economic &Financial Lack of incentive mechanisms Lack of enabling environment CAPEX intensity for investment High O&M rate Lack of funding Group 3. Institutional (regulatory & social) Lack of regulatory framework Lack of social acceptance and support to clean energy

Attempt to quantify the barrier preliminary survey From on-going research, we can identify the MOST IMPORTANT barriers (based on on-going survey, preliminary) 3.5 Preliminary questionnaires on barriers for wind energy development in Vietnam (on maximal scale of 4) Group 1 Group 2 Group 3 3.0 25 2.5 2.0 1.5 1.0 0.5 Two most important barriers are CAPEX intensity of wind Lack of policy and dincentive to promote clean energy 0.0

Thank You! For more information, contact: Dr. Nguyen Anh Tuan Institute of Energy, 6 Ton That Tung, Dong Da, Hanoi, Vietnam Email: tuannguyen.icd@gmail.com Web: www.ievn.com.vn Forum on Wind Energy Development between Germany and Vietnam, June 4th 2012, Ho Chi Minh City