Italy's power utility Enel has become the latest international energy investor to scrap plans for participating in the energy transition of Vietnam.
According to unnamed sources who spoke to Reuters, Enel has decided to exit Vietnam's wind and solar markets, with one source attributing the move to a broader company reorganization.
Earlier this year, Norway's Equinor scrapped plans to invest in offshore wind in Vietnam. Wind turbine major Orsted also revised its plans for Vietnam, pausing a large-scale offshore development amid regulatory challenges.
Enel two years ago announced plans to invest in the construction of up to 6 GW of wind and solar capacity in Vietnam. The company, through its arm Enel Green Power, is one of the biggest wind and solar operators in the world with 64 GW of capacity. At the time it highlighted Vietnam's considerable potential in wind and solar generation.
Indeed, Vietnam enjoys strong winds and shallow waters but at the same time, it appears to have a complicated grid connection mechanism, which has meant that a lot of completed wind and solar projects are yet to start generating because they need to be connected to the grid first.
This is rather unfortunate because Vietnam is suffering from tight energy supplies that earlier this year swung into a shortage, causing rolling blackouts. At the same time, the country has considerable ambitions in transition energy, planning to double its installed generation capacity by 2030. That capacity currently stands at some 80 GW. About a fifth of the doubled capacity should be wind turbines, per plans.
Yet it is wind power that is one of the biggest problems in Vietnam. According to Reuters, the government has yet to draft regulations for the development of offshore wind power projects and it also has to finalize negotiations on the price that it would undertake to pay to wind power project operators.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More