Norwegian energy giant Equinor has taken the decision to close its Hanoi office and withdraw from Vietnam’s offshore wind market. The move marks the first time Equinor has closed an international office dedicated exclusively to offshore wind.
The closure of Vietnam’s offshore wind market
Equinor’s decision comes in the face of growing political instability in Vietnam, including an internal struggle within the Communist Party of Vietnam and a recent tilt of the country towards China. These external factors, combined with a periodic review of Equinor’s renewable asset portfolio, led the company to reconsider its presence in the Asian country.
Although Vietnam currently has no offshore wind projects in operation, the country has set targets to install 6 GW of offshore wind capacity by 2030 to reduce its reliance on coal and move toward net-zero carbon emissions by mid-century. However, projects in the country face challenges, including legal issues and regulatory uncertainties, led Danish company Ørsted to pause its development plans in Vietnam last year.
Equinor has been in the process of reviewing its portfolio, which has resulted in the exit of more than a dozen countries in relation to fossil fuel projectsas the company focuses increasingly on renewable energy. Despite its withdrawal from Vietnam, Equinor remains committed to expanding its offshore wind operations in other parts of the world.
The energy impact in Vietnam
On its website, Equinor had described Vietnam as a country with “one of the best wind resources in Asia.Equinor had described Vietnam as a country with“one of the best wind resources in Asia“. However, political turmoil and regulatory difficulties have proven to be significant obstacles that the company is unwilling to overcome at this time.
Equinor’s exit creates a setback for Vietnam’s offshore wind market, a sector that many saw as having great potential. Moreover, the Norwegian company’s decision has been taken and underscores the challenges inherent in expanding renewable energy projects under unstable political and regulatory environments.
As Vietnam continues to work towards its energy targets, Equinor’s exit could have implications for future foreign investment in the sector. Nonetheless, the country remains committed to its long-term goals, and will see how developments in the Vietnamese energy sector unfold in the coming years.
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Source: Energy Central
Photo: © Equinor
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