The Blue Circle gets go ahead for second wind energy project in Vietnam CÔNG TY CỔ PHẦN - TSV

The Blue Circle gets go ahead for second wind energy project in Vietnam CÔNG TY CỔ PHẦN - TSV

The Blue Circle gets go ahead for second wind energy project in Vietnam CÔNG TY CỔ PHẦN - TSV

The Blue Circle gets go ahead for second wind energy project in Vietnam CÔNG TY CỔ PHẦN - TSV

The Blue Circle gets go ahead for second wind energy project in Vietnam CÔNG TY CỔ PHẦN - TSV
The Blue Circle gets go ahead for second wind energy project in Vietnam CÔNG TY CỔ PHẦN - TSV
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The Blue Circle gets go ahead for second wind energy project in Vietnam

March 31th, 2015

The recent oil prices slump represents a unique opportunity for South East Asia to move towards energy price transparency by cutting expensive energy subsidy programmes which have been around for decades.

The Paris-based International Energy Agency (IEA) estimates the global cost of subsidising energy consumption (mainly in developing economies) is US$500 billion a year.

Current cheaper oil should reduce this bill to about US$400 billion a year, leaving governments with the choice of continuing oil, gas and electricity subsidies to encourage consumption or dismantle these very costly programmes for national budgets and restore economic fairness.

The choice is particularly important for South East Asia’s high growth and fuel dependant economies.

Energy demand from ASEAN’s 600 million inhabitants has risen two and a half times since 1990 and is now equivalent to three quarter of the energy demand of India.

Indonesia alone spent US$29.2 billion in 2013 to make fossil fuels cheaper for final consumers.

Total subsidies from three other ASEAN countries - Vietnam, Thailand and Malaysia – amounted to over US$10 billion for 2013, according to IEA’s World Energy Report.

The electricity support schemes have in return required subsidies of power generation fuels to keep state-owned utilities financially viable.

The difference between market and subsidised prices, which accounted for 2.16% of the GDP in ASEAN-5, has contributed to major imbalances in many countries and banned utilities to invest in new technologies and capacity building.

In 2012, the US$51 billion spent by ASEAN countries in subsidising fossil fuels was equivalent to 11% of all general government budgets in the region.

Vietnam, amongst others, has electricity prices capped and differentiated for different users. More than US$2.5 billion is spent yearly to subsidise electricity prices from national utility EVN, distorting any competitive advantage renewable energy sources could have in a sun and wind resourceful country.

Indonesia, under its new President, has just started to slash its fuel subsidies but is still artificially reducing the price of 60 to 75 million tonnes a year of coal used in its 12 GW of coal-fired power plants.

Thailand spent US$6.8 billion in 2012  in fossil fuel consumption support schemes, second only to Indonesia, according to IEA records.

Low income earners have to be protected against wild gyrations of fuel prices of course, but giving consumers the good price signal is crucial for the future of renewables.

The current plunge of oil prices will be one of the very last chances to implement true energy prices around South East Asia and enable renewables to compete directly with non-subsidised fuels.

Wind resources, even though not evenly distributed in the region, are the most cost competitive and easy to deploy of today’s renewable energy sources.

Recent economic weaknesses in China, Europe and Japan, coupled with market share war amongst oil producers, have pushed fuel prices to unexpected lows which may not last long before world economic growth resumes.

Bringing back energy prices transparency is what renewable power needs to thrive in a future low carbon world.

Singapore-based renewable energy developer The Blue Circle, operating in the Mekong region (Vietnam, Thailand and Cambodia), has received approval for a second wind project in the Ninh Thuan province, South Vietnam.

Following the installation of the first 100 metre meteorological mast in the Ninh Thuan province for its first project in October 2014, The Blue Circle has been awarded a second site to develop a wind project at the Dam Nai location, in the north of the Ninh Thuan province.

Together with its Vietnamese partner TSV, The Blue Circle has received policy approval from the highest authorities of the province in an official ceremony on 25 March during the Conference on Investment in Ninh Thuan Province, sponsored by the People's Committee of Ho Chi Minh City.

The awarded site comprises of 933 hectares along the Highway 1 and is used mainly for rice cultivation today. The application was placed for 100 MW energy generating project to be built in phases for a total potential investment of US$200 million. The electric substation to connect the turbines to the Vietnamese national grid is onsite.
"This second approval of a wind project in Ninh Thuan province confirms our commitment to develop wind power in Vietnam as well as the success of our partnering strategy" said Olivier Duguet, Chief Executive Officer of The Blue Circle.

"We selected this site two years ago as an ideal location for its excellent wind potential and we are honoured to have been chosen by the Ninh Thuan provincial authorities to develop the site into a wind power project", Mr Duguet added.

The next step for the Dam Nai site development will be the installation of a 100 metre meteorological mast in the coming weeks and the start of engineering studies. The construction of first phase of the project is expected after permitting is completed mid-year 2016.

Mr Do Van Dien (centre left), Chairman of TSV Invest and Development Vietnam, shakes hands with Olivier Duguet, CEO of The Blue Circle,  to seal the deal for the company's second wind project in Vietnam.

About The Blue Circle

The Blue Circle is a developer of wind and solar energy projects in Thailand, Vietnam and Cambodia. The Singapore based company looks to bridge the gap in project development in the Southeast Asia  region by bringing international project development experience, financial expertise and capabilities together with local market understanding. Its growth strategy is twofold: through the development of its own projects and through acquisition or partnership with local developers. By being vertically integrated, The Blue Circle can identify green field sites, pursue project development milestones up until financing and operating of the generating assets.

For further information, please contact: 
The Blue Circle
Olivier Duguet  
Tel:  +65 62594921 


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