Vietnam Reaches Final Investment Decision on First Commercial Offshore Wind Project

Vietnam approved the final investment decision for its first commercial-scale offshore wind farm, a 600 MW project off the coast of Binh Thuan province, the Ministry of Industry and Trade announced. Construction is scheduled to begin in early 2027, with first power expected by 2029.

The project, developed by a consortium of Petrovietnam, Denmark's Copenhagen Infrastructure Partners and Singapore-based Sembcorp Industries, carries an estimated capital cost of USD 2.7 billion. According to ministry filings, the consortium has secured a 25-year power purchase agreement at an average tariff of USD 0.084 per kilowatt-hour.

National targets

Vietnam's revised Power Development Plan 8 targets 6 GW of offshore wind capacity by 2030 and 91 GW by 2050. Until now, no commercial offshore project had reached financial close, despite more than two dozen pre-development memoranda signed since 2021.

Industry observers said the Binh Thuan FID is a long-awaited proof point for the regulatory framework finalised in 2024. The framework defines seabed leasing terms, environmental review timelines and grid connection responsibilities, addressing gaps that had stalled earlier projects.

Supply chain

The consortium said roughly 35% of project value will be sourced domestically, including monopile fabrication at Petrovietnam's Vung Tau yard and tower sections from a joint-venture facility planned for Hai Phong. Turbines will be supplied by Vestas, drawing on the company's recent expansion in southern Asia.

Cable manufacturer Prysmian has been short-listed for the 220 kV export cable, with final selection expected by year-end. Installation vessels will be sourced from regional contractors operating in the South China Sea, including Singapore-based heavy-lift specialists.

Grid integration

State utility EVN is upgrading the 500 kV transmission corridor between Binh Thuan and the Ho Chi Minh City load centre to accommodate the new capacity. EVN said the upgrade is funded under the World Bank-supported transmission program announced earlier this year.

Curtailment risk remains a concern. Vietnam's southern grid has experienced solar curtailment of 8% to 12% during midday peaks in recent years, and offshore wind operators have asked for firm dispatch priority during low-demand hours. The Ministry of Industry and Trade said an updated grid code will be published in the third quarter.

Wider regional context

Vietnam's offshore wind potential is estimated at 162 GW within 200 kilometres of shore, the largest in Southeast Asia, according to a World Bank assessment. The Philippines, Indonesia and Thailand have set similar long-term targets but lag Vietnam in regulatory clarity.

Taiwan remains the only Asian market with operating commercial offshore wind farms outside mainland China, with 2.7 GW currently in service. Korea has 0.4 GW operational and a 14.3 GW pipeline targeting 2030.

The European Wind Energy Association said the Vietnam FID is a meaningful signal to global supply-chain participants that Southeast Asia can move from pipeline to financed project. WindEurope chief executive Giles Dickson said in a statement that the project's domestic content provisions are workable but tight, and will require careful management to avoid schedule slippage.

Carbon impact

The 600 MW farm is expected to generate roughly 2.4 TWh annually, displacing approximately 1.7 million tonnes of CO2 emissions per year based on Vietnam's current grid emissions factor of 0.71 tCO2 per MWh. The project is expected to count toward Vietnam's nationally determined contribution under the Paris Agreement.