This is part of Prime Minister Nguyễn Tấn Dũng’s newly-promulgated Decision No. 37/2011/QD-TTg.
The Decision states that goods imported to create establishments for wind power projects, including raw materials and semi finished products that are not yet produced in Việt Nam, are exempted from import taxes.
Wind power projects and special investment incentive projects will receive similar reduction or exemption from Corporate Income Tax (CIT).
In addition, transmission lines and sub-stations for the national power grid that belong to wind power projects will be exempted from land rent.
Price supports and buyer’s responsibility
As specifically stated in the Decision, buyers are obliged to purchase the entire electricity output from designated wind power projects in the areas of their management. The delivery price is currently set at 1,614 VND/kWh (excluding VAT), but adjustable by the fluctuations in the VND/USD exchange rate.
Through the Việt Nam Environment Protection Fund, buyers will receive a 207 VND/kWh subsidy for each entire purchase of electricity output from wind power projects. The subsidy, however, is to be gradually decreased and eliminated when electricity price is at market level.
The model power purchase agreement for grid-connected wind power projects issued by the Ministry of Industry and Trade is to be applied to all previously mentioned power purchases.
The need for support
There are currently 21 common scale wind power projects with capacity of 30 MW in research and development for Bình Thuận, Ninh Thuận, Bình Định and Lâm Đồng. These areas have the potential design capacity of over 2,000 MW.
Wind power investment in Việt Nam is still underdeveloped due to difficulties in natural conditions, weather, technology, and investment costs.
The global level of investment in wind power is still high and fluctuating. The highest, lowest, and median levels are 2.77, 1.77 and 2.2 million USD per MW, respectively.
Therefore, wind power development in Việt Nam needs many supports from the government.
By Xuân Hùng
