With the strong economic growth and recovery after the COVID-19 pandemic, Vietnam is facing major energy challenges, especially the increasing demand for electricity to serve key industries. This requires a significant energy transition, where renewable energy with offshore wind power plays a central role. The development of this energy source not only helps meet energy demand but is also in line with Vietnam's sustainable development goals, as reflected in the Power Development Plan VIII.
In the global context, Vietnam has also demonstrated its commitment to reducing emissions and increasing the use of renewable energy to achieve net zero carbon emissions by 2050 at the 26th Conference of the Parties (COP) in 2021. Following this event, Vietnam has participated in a series of international discussions and negotiations, emphasizing the importance of developing renewable energy, especially offshore wind power, in efforts to mitigate the impacts of climate change during and on the sidelines of the recent COP 27 and COP 28 Conferences.
Offshore wind power is not only a clean energy source but also brings economic benefits.
Offshore wind power is not only a clean energy source but also brings economic benefits, through the creation of thousands of jobs, attracting foreign investment and developing technology. This will promote economic development in coastal areas, while improving the quality of life for local people. Besides, it ensures energy security for the country, minimizing risks from incidents and energy interruptions. Moreover, the development of offshore wind power projects not only helps the country reduce its dependence on fossil fuels but also contributes significantly to reducing greenhouse gas emissions.
Vietnam's Power Plan VIII has set a goal of strongly developing the renewable energy industry, of which offshore wind power is an indispensable part. Vietnam has great potential for developing offshore wind power, with a coastline of more than 3,000 km, many islands and good wind conditions with an average wind speed of 5m/s or more year-round, especially in the Central and South Central coastal regions. With its favorable geographical location and climate conditions, Vietnam is considered a country with great potential, at a good level in the world, to develop offshore wind power. According to the World Bank, Vietnam has the potential to build wind power projects in coastal areas along the South Central Coast, the South, the Central Highlands, the North Central region and a small area in the North. The theoretical potential for onshore wind power is more than 320GW, for offshore wind power is about 600GW.
By the end of 2021, the total installed capacity of renewable energy sources in Vietnam will reach about 20.7GW, accounting for more than 27% of the total installed capacity of the power system, of which wind power will account for about 4GW (including onshore and nearshore wind power projects). Vietnam is the leading country in the region in increasing renewable energy capacity. The World Bank expects fixed-foundation offshore wind power projects to account for the majority of the offshore wind power market in Vietnam. According to the report "Roadmap for offshore wind power development in Vietnam", the World Bank has set out two low and high growth scenarios for offshore wind power in Vietnam. In which, for the low growth scenario, Vietnam will have 11GW of offshore wind power installed capacity by 2035. For the high growth scenario, Vietnam could have 21GW of offshore wind power installed capacity.
With the forecast in the two scenarios above of the World Bank, offshore wind power can provide 5-12% of Vietnam's total electricity supply by 2035, showing the abundant potential along with the importance of developing offshore wind power in our country. In Decision No. 500/QD-TTg dated May 15, 2023, the Prime Minister approved the National Power Development Plan for the period 2021-2030, with a vision to 2050. According to the power source development plan, offshore wind power capacity to serve domestic electricity demand is about 6,000 MW by 2030; the scale can be increased in case of rapid technology development, reasonable electricity prices and transmission costs. The orientation to 2050 is 70,000 - 91,000 MW.
In the context of the booming offshore renewable energy projects in the world and the commitment of the Vietnamese Government to achieve the net zero target by 2050, experts say that the current period is the "golden time" for Vietnam to start and participate in the offshore renewable energy industry.
Petrovietnam leaders report to Prime Minister Pham Minh Chinh on investment in offshore wind power development
With over 60 years of building and developing the oil and gas industry, the Vietnam National Oil and Gas Group (Petrovietnam) is a leading state-owned economic group, making many contributions to the country's economic development, industrialization, modernization and international integration; making a very important contribution to the State budget during 35 years of renovation. Petrovietnam currently not only owns a value chain of oil and gas services spanning from Upstream - Midstream - Downstream but also builds a high-quality accompanying service industry to increase the autonomy and comprehensiveness of the chain.
In fact, Petrovietnam has also begun to make new moves to seize opportunities in the new field. With similar advantages between offshore wind power and offshore oil and gas projects, along with abundant and qualified facilities and human resources, Petrovietnam and its member units are actively preparing preparatory activities to promote participation in the implementation of offshore wind power projects. Although they have affirmed their capacity, experience and many advantages when successfully implementing many offshore oil and gas projects for many years, when converting from the oil and gas sector, these units will have to make significant changes and transformations to be able to meet the specific requirements of the offshore wind power industry.
Faced with the huge potential of the offshore wind power market, previous studies have shown the compatibility of operations and techniques between oil and gas services and wind power services. Especially with the characteristics of Vietnam's oil and gas blocks/fields located on the continental shelf, there is a special advantage for offshore projects. When assessing the ability to diversify services for oil and gas projects and offshore wind power projects, the focus will be mainly on technical service units, services and units that have participated in the Exploration and Exploitation process at oil and gas blocks as well as in 02 aspects of human resources capacity and infrastructure. According to the analysis of the compatibility of capacity and techniques between technical services for oil and gas projects and offshore wind power projects, Petrovietnam's service units, in addition to their existing human resources capacity, need to ensure the capacity of physical assets to meet the service chain.
Offshore wind power base construction site at PTSC port.
In the context of the electricity and oil and gas service market in Vietnam, the main opportunities for Petrovietnam's service units can be seen from offshore wind power projects by utilizing/developing port system services, offshore infrastructure supporting equipment transportation, foundation installation, wind towers, seismic, environmental assessment. These are service areas within the existing capacity of the units and can be implemented immediately.
In the current service value chain of Petrovietnam, the logistics port system as well as the fabrication yard are the strong advantages of the service units. However, according to BVG Associates' assessment, in addition to the favorable location (where many offshore wind power projects are planned), the infrastructure to have enough capacity to supply wind power projects needs to invest in upgrading a number of items such as: expanding and upgrading the port in an open direction, work chain, investing in upgrading the crane system, super-heavy cranes, storage/warehouse area, welding equipment, cutting, steel bending, mobile cranes, crawler cranes, SPMT4, etc.). The port system of Petrovietnam's service units is all assessed to have good capacity and only needs a small investment to be able to meet the services for offshore wind power. In addition, the Group's service ship and equipment system also meets the needs of providing services for offshore wind power projects.
In addition, through research, an offshore wind power project also has similar stages to an oil and gas project. In addition, the fabrication of offshore structures for the oil and gas industry has many similarities to offshore wind power projects as both industries require a highly skilled workforce and strict standards in fabrication to ensure the operation of offshore structures for many years. With a total of about 22 thousand employees in the oil and gas service sector related to offshore wind power, according to the survey assessment, the suitability of current expertise to the offshore wind power sector is quite high.
The oil and gas industry has developed in Vietnam for over 40 years, closely followed by oil and gas technical services. After more than 30 years of construction and development, Vietnam Petroleum Technical Services Corporation (PTSC) is a key member of Petrovietnam operating in the field of providing technical services for the oil and gas, industry and energy sectors in the country and the region.
PTSC employees
PTSC currently owns facilities, fabrication yards and a workforce of nearly 10,000 highly qualified people to provide services to this industry. PTSC currently owns a system of facilities including 08 port bases stretching from North to South with a total area of over 300 hectares and nearly 3km of wharf; Owns and manages a fleet of 21 service vessels of various types and capacities operated by a team of experienced and qualified Vietnamese crew; Owns and co-owns 06 FSO/FPSO serving customers' exploitation activities at domestic and foreign mines along with facilities serving survey work, fabrication work, new construction of oil and gas projects as well as transportation, connection, construction, maintenance, repair, and dismantling of offshore oil and gas projects.
With its current capacity, PTSC can participate in providing services for all stages of an oil and gas project from exploration (survey activities, support for exploration drilling), project development (fabrication, transportation, installation of offshore structures, support for drilling), exploitation (operation and maintenance, port bases, service vessels, etc.) to termination of operations (dismantling, relocation of offshore structures). Not only that, as the only member of Petrovietnam with full capacity and legal basis to participate in investing, developing and operating offshore wind power projects, PTSC is currently establishing close relationships with reputable investors/developers in the world in the field of offshore renewable energy, creating relationships with major financial and credit institutions to seek opportunities to participate in investing in the development of offshore wind power projects in Vietnam.
Therefore, with its strengths, PTSC is assessed by experts to have full capacity to invest in project development as well as provide service chains for the offshore wind power industry. Currently, PTSC has been trusted by international offshore wind power developers to participate in their supply chains as well as to invest in these projects in the future. In the green development trend, PTSC is shifting its operations with a focus on the offshore wind power sector, aiming to become a project development investor and professional service provider for this new industry on a global scale.
Mr. Le Manh Cuong, General Director of PTSC introduced the facilities and technology of the Corporation to the Singapore Government delegation.
Previously, PTSC participated in wind power projects in Truong Sa archipelago (2008-2010) and Phu Quy island district (2010-2013), but PTSC has only officially participated in the offshore wind power sector in the last 3 years. Initially, it was from equipment transportation packages, wind turbine tower installation, submarine cable laying, long-term supply of specialized vessels for nearshore wind power projects; installation and operation of FLIDAR equipment to survey, collect oceanographic and hydrological data... for the Thang Long offshore wind power project of Enterprize Energy in Binh Thuan area. Then, PTSC bid and won the international contract for the design, procurement and manufacture of 02 offshore transformer stations (OSS) for the Hai Long 2 & 3 offshore wind power project in Taiwan (China). This is also taking advantage of the existing strengths from 30 years of experience in providing technical services for domestic and foreign oil and gas. However, the milestone marking PTSC's strong transformation to officially enter the supply chain for offshore wind power projects is the Contract to manufacture 33 foundations for the offshore wind farm project with a total capacity of 920MW in Taiwan (China) of customer Orsted. With this contract, PTSC will manufacture and supply 33 fixed foundation foundations, with each foundation measuring approximately 85m in height and weighing approximately 2,300 tons. The total steel structure volume under the Contract is nearly 100,000 tons. This is a very large volume compared to the oil and gas projects that PTSC has implemented and is large-scale, and mass-produced with similar foundations. This is different from a large-scale oil and gas platform with many devices, but is implemented individually. From that nature, offshore wind power production productivity must be high and progress must be fast. This is also an important difference compared to the production of oil and gas platforms, where the construction time of a platform can sometimes take several years to complete.
Currently, PTSC is continuing to pursue the next wind power base manufacturing packages for projects in Taiwan (China), Korea, Europe, etc. PTSC is aiming to become a valuable link in the global offshore wind power supply chain. At this stage, when the supply chain has not yet been truly formed, becoming a link is the goal that PTSC is aiming for, in order to gradually build a solid position in the offshore wind power industry in the future. PTSC identifies offshore wind power as an opportunity and is ready to face, confront challenges and make every effort to achieve that goal.
It can be said that for offshore wind power, thanks to the strength of many years of experience in the field of offshore oil and gas exploration and exploitation, Petrovietnam units, including PTSC, have many advantages in occupying and increasing value at each stage of supply/link of the value chain of marine works, suitable for many stages and work items. This becomes especially meaningful when the activities of manufacturing, transporting, and installing components and equipment account for a large cost weight in this field. However, a full assessment is needed to propose a supply chain and linkage between service providers in the oil and gas industry when participating in offshore wind power to ensure the highest promotion of existing strengths, as well as to propose goals, solutions and plans to effectively implement specialized investment activities to occupy links with high added value, advanced technology, higher production and management capacity in this new service field. Petrovietnam's service sector needs to not only meet the maximum demand for the domestic oil and gas market and industries, but also expand to provide services for offshore wind power in Vietnam and abroad.
According to PTSC's experience in implementing offshore wind power projects for international customers, the global supply chain for this sector is quite fragile. In Vietnam, there are very few domestic units that can meet the requirements of progress, volume and quality of these projects. Therefore, units need to have capacity, experience and orientation to cooperate and support each other to meet the conditions of Investors/Developers of offshore wind farms.
The quality of PTSC's human resources is always focused on improving.
Building and increasing the linkage chains between units with each other, in order to effectively promote resources, share and link capacity, assets, equipment and machinery to meet the high requirements of volume and quality of projects. Service units in the industry have gradually affirmed their position in terms of capacity and capability not only domestically but also reaching out to the region and the world. However, some types of services still have overlaps because many member units in the Group perform together, coordination, support and linkage for mutual development between units are still limited, not promoting the combined strength of the entire Vietnam National Oil and Gas Group.
To address the limitations in coordination between units in the industry, it is necessary to promote cooperation, orient the scope of service chains for each unit, in order to optimize material resources, increase investment efficiency in providing services for oil and gas and offshore wind power.
Recently, the Politburo issued Conclusion No. 76-KL/TW, dated April 24, 2024 on "Implementation of Resolution No. 41-NQ/TW dated July 23, 2015 of the Politburo on strategic orientation for the development of Vietnam's oil and gas industry to 2025, with a vision to 2035 and some orientations in the new period". It requires that the development of the oil and gas industry must be associated with the energy transition process and promote green growth; pilot projects for offshore wind power production and export; Production of green hydrogen, green ammonia, renewable energy associated with the advantages of the oil and gas industry... Building national energy centers integrating gas, LNG - electricity - refining, petrochemicals, wind power, solar power, large-scale renewable energy with international competitiveness in the localities of Ba Ria - Vung Tau, Quang Ngai, Thanh Hoa... Promoting the advantages of the oil and gas industry in developing the renewable energy and new energy industries. Developing Petrovietnam into a national industrial - energy group associated with development, improving operational efficiency in traditional energy fields.
With specific orientations and strategies, combined with the similar strengths of the oil and gas industry with offshore renewable energy, Vietnam National Oil and Gas Group/PTSC believes that it will proactively promote the best key role of oil and gas enterprises in developing Vietnam's offshore renewable energy industry in the near future.
Le Manh Cuong
General Director of PTSC
Source: https://www.pvn.vn/chuyen-muc/tap-doan/tin/9029d760-0506-4a92-9824-ff664e651e15
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