Equinor Quits Vietnam's Offshore Wind Sector

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Norway's state-owned Equinor (NYSE:EQNR) (Stavanger, Norway) has elected to pull out of Vietnam's offshore wind market as regulatory issues and political upheaval continue to make foreign investors nervous.

The company, which had established an office in Hanoi in 2022 attended by senior representatives from both governments, has now shut the office and canceled any proposed projects. "We have decided to discontinue our business development in Vietnam and to close our office in Hanoi," Equinor spokesman Magnus Frantzen Eidsvold told Reuters. He said the decision followed a review of its renewable assets portfolio and it is the first time that the company has closed an international office dedicated to offshore wind development. Eidsvold added: "The offshore wind sector has been facing significant headwinds lately and we need to be disciplined in our approach." The country is going through a period of political upheaval, having lost two presidents in just over a year, as the ruling party is subject to an ongoing anti-corruption purge.

The move echoes a similar decision made by Danish energy major Ørsted (Fredericia, Denmark) last year when it also quit the country's offshore wind sector, abandoning multi-gigawatt projects while blaming regulatory challenges. At its 2023 Capital Markets Day, Mads Nipper, Group President & chief executive officer said: "We decided to step down our market development activities in Vietnam, because we do not believe that compared to the other opportunities that we have, that Vietnam is a sufficiently attractive market. It's still a really important supplier market. But for market development, we are pulling back from that, to prioritize other areas with higher value creation potential."

The Communist-led Vietnam has no offshore wind power yet but it is seen as one of the best potential markets going forward, with a long coastline and ambitious targets. Last year, the government published its long-awaited Power Development Plan VIII (PDP8), with an onshore wind target of 21.8 gigawatts (GW) by 2030, up from the almost 5 GW of installed capacity by the end of 2023. The target for offshore wind is 6 GW by 2030 from none at the moment. The general consensus of those operating in the Vietnamese offshore sector is that 1 GW is more likely. Industrial Info is tracking 92 planned offshore projects worth US$85 billion in investment. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the report. The regulatory framework for offshore wind in Vietnam is underdeveloped, according to the Global Wind Energy Council (GWEC), while there are issues with the government insisting on using mostly local companies for project delivery. There are also geopolitical challenges for projects in the disputed South China Sea, which is claimed by China.

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