1. Page 1 Implemented by Up-Scaling of Wind Power in Vietnam AHK Business Trip “Wind Power in Vietnam” Ho Chi Minh City, 23 November 2015 Peter Cattelaens Project Manager GIZ/MOIT Up-Scaling of Wind Power in Viet Nam Hanoi, Viet Nam peter.cattelaens@giz.de

2. Page 2 Implemented by Agenda Vietnam Energy Market Overview Wind Energy in Vietnam GIZ support in Wind Power in Vietnam 23/11/2015

3. Page 3 Implemented by Electricity Production: Development and Outlook 23/11/2015 Generation according draft revised PDP VII 2020: 258.8-278.9 TWh 2030: 515.7-632.1 TWh

4. Page 4 Implemented by Electricity Production and Generation Capacity 2014 Source: EVN (2015), IOE (2015) 23/11/2015 2014: 145.5 TWh2014: 34 GW

5. Page 5 Implemented by Source: GDE (2015) Power Development Plan Draft Revised PDP VII 23/11/2015 * including SHP **including storage hydropower 2020: 61 GW 2030: 116 GW Installed Capacity 2014: 34 GW

6. Page 6 Implemented by Political targets / Feed-in tariff 23/11/2015 Duration of PPA: 20 Years Political targets: 1 GW in 2020 6.2 GW in 2030 Decision 37/2011/QD-TTg (29.06.2011) Feed-in-Tariff for Wind Power: Tariff: 7,8 USCents/kWh Currently under revision 6.8 USCents/kWh power purchase EVN 1.0 USCents/kWh Vietnam Environmental Protection Fund

7. Page 7 Implemented by Additional incentives 23/11/2015 Additional Incentive Mechanisms for RE Import tax Varying levels of import tax, depending on type of imported goods Exemption on goods forming fixed assets, which cannot be produced locally Waiving of land use/lease fees Land is provided for free or lease fee is reduced as part of the licensing agreement Corporate income Tax Years 1-4: tax exemption Years 5-13: 50% tax reduction Higher depreciation rate For equipment of renewable energy power plants a 1.5 higher depreciation rate can be applied Improved conditions for Public private partnership (PPP) Project development Operation and electricity production

8. Page 8 Implemented by Status Quo 23/11/2015 52 MW in operation Tuy Phong/Binh Thuan wind farm 30 MW (20 x 1.5 MW) Bac Lieu wind farm (expansion ongoing) 16 MW (10 x 1.6 MW) Phu Quy hybrid systems 6 MW (3 x 2 MW) Under development Varying information (reliability?) IoE (2014) 52 projects in planning cumulated rated power of 4,252 MW Feasibility questionable 24 MW under construction (Phu Lac)

9. Page 9 Implemented by GIZ/MOIT Support on Wind Power (2014-2018) 23/11/2015 Action Area 1: Legal and Regulatory Frameworks Policy adviceFeed-in tariffRegulation, licensingStrategic advice (local value creation)Systems analysis Technical standards, guidelines, e.g. ESIAs Update wind data quality… Action Area 2: Capacity Development Capacity Needs AssessmentSupport to local banksSupport to local project developersSupport to wind power associationVocational training for windShort-term training courses… Action Area 3: Technology Cooperation Market information Investment Guidelines Support to private sector partnerships Vietnamese German research cooperation …

10. Page 10 Implemented by GIZ/MOIT Wind Power Investment Guidelines 23/11/2015 Phase A Preliminary development Phase A Preliminary development Phase B Development Phase B Development Phase C Implementation Phase C Implementation Phase D Operation and maintenance Phase D Operation and maintenance Phase E Decommissioning Phase E Decommissioning Site selection Pre FS Decision on investment/ Investment Certificate FS phase Technical design Agreements Land lease Construction permit Detailed design Land clearance Financing Construction Commissioning/ Testing Generation License Operation License Site identification Is the site already included in WPDP? Check site availability No Site exclusivity Temporary land lease Wind measurement Pre FS Request for investments of the project Request for investments and inclusion in WPDP Investment certificate Escrow account Foreign investor Decision on investment Yes Phase B Development Phase B Development Phase A Preliminary development Phase A Preliminary development

11. Page 11 Implemented by Wrap-up 23/11/2015 Opportunities Sustained growth in electricity demand Good resource, ambitious policy targets for wind PDP VII: 1GW/2020; 6,2 GW 20130 Power sector reform: competitive market by 2025 Increasing necessity for private sector finance (Lack of) domestic wind industry New investment law further eases foreign investment Barriers Unclear political and regulatory environment Electricity off-taker risk (no state guarantee on PPA) Low feed-in tariff (to be adjusted soon?) (Lack of) domestic wind industry Limited capacities Access and quality of data

12. Page 12 Implemented by Thank you for your attention Peter Cattelaens Project Manager GIZ/MOIT Up-Scaling of Wind Power in Viet Nam Hanoi, Viet Nam peter.cattelaens@giz.de