Gulf battles to achieve goals

16:00 | 17/04/2019
Although Thailand’s Gulf Group is ­betting on several renewable energy projects in Vietnam, it remains ­uncertain if all projects will come ­online in time to meet their ­commercial operation dates.
gulf battles to achieve goals

Gulf Energy Development Plc., listed on the Stock Exchange of Thailand, has seen its shares rocket by 50 per cent since the group’s announcement of wind and solar projects in Vietnam was unveiled last ­August, while billionaire founder Sarath Ratanavadi’s fortune has surged $1 billion since December alone, as investors cling to news of the group’s movements in the ­country, according to Bloomberg.

Gulf has teamed up with Thanh Thanh Cong, one of the leading ­conglomerates in Vietnam operating energy and industrial estate with ­assets of about $1.9 billion, to carry out three solar projects and one offshore ­initiative. They include the TTCIZ O1 and TTCIZ 02 solar power projects in the southern province of Tay Ninh, and a solar project and a wind scheme in neighbouring Ben Tre province, with the total installed capacity of 460 megawatts (MW). TC Green Energy Investment JSC, as associate in which Gulf indirectly holds 49 per cent of stakes, operates TTCIZ-01, which commenced the sale of electricity to Electricity of Vietnam (EVN) on March 6, 2019, according to Gulf’s latest report.

The TTCIZ-01 solar power project is located in Trang Bang district of Tay Ninh, with an installed power generation capacity of 68.8MW and the total investment capital of around $65 million. It is the first of the Thai group’s power projects to commence commercial operation in Vietnam.

The second project, TTCIZ-02, in which Gulf indirectly holds 90 per cent of stakes, has an installed power generation capacity of 50MW and will supply electricity to EVN under the same terms as TTCIZ-01. To date, construction on the project has proceeded as planned and is expected to commence commercial operation as scheduled next month.

The group’s latest movement has been made amid a booming renewable energy sector in Vietnam, as a series of businesses race to carry out their ­projects to meet commercial operation date (COD) by June 30 set by the prime minister’s Decision No.11/2017/QD-TTg on the mechanism for encouraging solar power ­development in the country.

However, in its report update regarding projects in Vietnam released in March 2019, Gulf pointed out that the two remaining renewable energy ventures in Ben Tre may be put on hold, as they risk missing the deadline. The solar project is still believed to be ­waiting for approval from the ­Ministry of Industry and Trade, while its wind power project is still searching for ­an investment certificate and a power purchase ­agreement.

Under the prime minister’s ­Decision No.39/2018/QD-TTg to ­revise the mechanisms supporting the development of wind power projects from November 1, there will be a feed-in-tariff (FiT) of 9.8 US cents for offshore ventures. The new FiT applies to part of the whole of plants that reach the COD ­before November 2021.

Besides these initiatives, Gulf has further expressed interest in developing a gas-fired power complex in the central province of Ninh Thuan. The complex is designed with four plants and a combined capacity of 6,000MW. The total investment capital is estimated at $7.8 billion.

The World Bank has estimated Vietnam’s electricity demand to grow by around 8 per cent a year for the next decade, and said the country would need to invest $150 billion by 2030 to develop its energy sector.

By Phuong Thu

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