Reports: Equinor halts Vietnam offshore wind plans, to close Hanoi office

Equinor has cancelled plans to invest in Vietnam’s offshore wind sector, a company spokesperson has told Reuters. The move, which is being widely reported in investor media, is seen as a setback for the Southeast Asian country’s green energy plans.

Vietnam has attracted international interest in its renewables plans because of its strong winds in shallow waters near coastal, densely populated areas, according to the World Bank Group, but delays in regulatory reforms have recently pushed some would-be investors to reconsider their plans.

“We have decided to discontinue our business development in Vietnam and to close our office in Hanoi,” Magnus Frantzen Eidsvold, an Equinor spokesperson, told Reuters.

It is the first time Equinor has closed an international office focused on offshore wind development. The company has previously exited more than a dozen countries where it had oil and gas activities over the last few years to focus on renewables and low-carbon systems.

Equinor’s exit deals a further blow to Vietnam after Danish offshore wind developer Ørsted said last year that it would pause its plans to invest in large offshore wind farms in the country.

Vietnam has no current offshore wind projects but wants to install wind farms for six gigawatts (GW) by 2030, equal to four percent of its planned capacity, as part of plans to reduce coal and reach net zero carbon emissions by the middle of the century.

Its plans, however, have been repeatedly delayed, as recent political turbulence in the country has paralyzed reforms and projects.

The industry is also considered sensitive by Vietnamese authorities because projects would be developed in the contested South China Sea, a crucial shipping waterway that China has often laid claims to almost in its entirety.

Another challenge has been that the industry ministry in Vietnam has been pushing to assign domestic, state-owned companies to the first pilot project on offshore wind – a move that foreign investors have said would slow down development, because domestic firms do have not sufficient supply and development capacities.

Two Vietnam-based offshore industry executives – speaking on conditions of anonymity – said that in the best scenario, Vietnam could install only about 1 GW of capacity by the end of the decade due to regulatory hurdles.

As reported by Reuters, these officials said that talks are underway to convince the government to allow a foreign partner to co-develop the pilot project.

Equinor had decided to quit Vietnam after a regular review of its portfolio of renewable assets, Eidsvold reportedly said. “The offshore wind sector has been facing significant headwinds lately and we need to be disciplined in our approach,” he told Reuters.

Equinor had opened a Hanoi office in May 2022, describing the nation of 100 million as having a “high potential to become an interesting growth market for offshore wind,” according to Equinor’s website. “The country has among the best wind resources in Asia,” the website said.