Investment News

PM calls for reducing 'high' renewable energy prices


Renewable energy investors are making "great profits" but people are paying high prices for electricity, and it is necessary to harmonize the two sides' interests, Prime Minister Pham Minh Chinh said.

At a meeting with executives from the renewables industry in the southern province of Bac Lieu on Sunday, he said Vietnam has encouraged the development of wind and solar energy in recent years, but current electricity prices are not reasonable.


Prime Minister Pham Minh Chinh surveys a wind power project in the southern province of Bac Lieu on December 4, 2022. Photo by VnExpress/Anh Minh

In the past, when the technology was not well developed, wind and solar power prices could be high to encourage investment.

But now wind energy in Vietnam is more expensive than globally and power from other sources, while technology has progressed very rapidly and production costs have fallen greatly, he said.

Besides, electricity generating businesses do not have to invest in the transmission network, which the government has done at huge cost, he said.

He called for reviewing electricity prices and renegotiating wind power deals to find suitable solutions that harmonize the benefits of investors, the government and consumers.

He also instructed the Ministry of Industry and Trade to amend mechanisms and policies related to wind and solar power so that relevant parties promote research, technology transfer, human resource training, funding, and local content use in equipment to develop the domestic industry.

A wind power farm in Vinh Trach Dong Commune, Bac Lieu City. Photo by VnExpress/Nguyet Nhi

At a working session with the prime minister, the chairman of the Bac Lieu Province people’s committee, Pham Van Thieu, sought the green light for installing another 2,000 MW of wind power capacity, including 1,500 MW offshore, by 2025, and for the 500-kV transmission line from Bac Lieu to Can Tho City.

The current feed-in-tariffs applicable for wind power commissioned before November 1, 2021, are 8.5 cents and 9.8 cents per kilowatt-hour for onshore and offshore plants.

Due to the FIT, renewable energy plants mushroomed with capacity surging many times above the national plan.