According to investors, the problem is the low electricity price, which leads to financial difficulties. However, if raising the electricity price at which Electricity of Vietnam (EVN) buys from wind power generators, this will increase pressure on retail electricity prices.

Localizing the production of wind turbines will help settle the problems.

Under the national strategy on developing renewable energy by 2030, 30 percent of value of the devices used in renewable energy will be manufactured in Vietnam by 2020 and 60 percent by 2030. It is expected that by 2050, domestic production will be enough for domestic consumption and for export.

The government of China created a market large enough to attract large turbine manufacturers to set up factories in China. After that, it tried to gradually increase the localization ratio of turbine products with policies which set compulsory locally made content ratios.

This allowed domestic manufacturers to master technologies and join the market.

However, Nguyen Hoai Son and Ha Duong Minh from the Clean Energy and Sustainable Development (CleanED) Lab, think the plan will not work well in Vietnam.

Explaining their view in an article in Nang Luong Viet Nam, Son and Minh said the Vietnamese market is too small to attract multi-national corporations. In principle, it would be better to set up plants in vast markets to reduce the costs.

Besides, it would be not be feasible to set compulsory localization ratios as Vietnam is a member of WTO.

The authors believe that it would be better for Vietnam to focus on manufacturing some parts of wind turbines. Organizing production networks globally is now a growing tendency.

The parts of a turbine can be classified into three groups. The first one comprises parts that need many materials, such as towers. The second requires many workers, such as blades. And the third requires huge investment capital such as gearboxes and generators

The products of the third group could be the key that helps Vietnam join the turbine manufacturing chain.

US’s General Electric operates a $61 million plant in Hai PHong City which makes 60 Hz generators for export to North America and 50 Hz for domestic consumption.

VietNamNet Bridge - July 5, 2018