SK Innovation E&S eyes expansion with offshore wind farm in Vietnam

(SK Innovation E&S)

SK Innovation E&S Co., a South Korean provider of advanced renewable and clean energy solutions, is eyeing global expansion with the commercial operations of its offshore wind farm in Tân Phú Đông, Vietnam.

Located near the Mekong Delta, the 150-megawatt (MW) near-shore facility consists of 36 massive wind turbines, each with a capacity of 4.2 MW.

Maeil Business Newspaper recently visited the Tân Phú Đông offshore wind power complex. The electricity generated is transferred via undersea cables to an onshore substation, and then supplied to Vietnam’s state-run power company.

The Tân Phú Đông complex is the first among SK innovation E&S’s offshore wind projects, both domestic and overseas, to begin commercial operations.

Last year, the total power generation from this site reached 443 GWh – enough to supply about 200,000 Vietnamese households for a year. Annual revenue from the project is approximately 50 billion won ($36 million).

“The turbines typically rotate at wind speeds of 6 to 8 meters per second and can reach up to 10 meters per second – comparable to the wind conditions at Korea’s far-offshore wind farms,” said Kwon Ki-hyuk, the head of SK Innovation E&S Vietnam office.

Recognizing Vietnam’s natural advantages early on, SK Innovation E&S positioned the country as a strategic foothold to expand its renewable energy business.

The company entered the offshore wind sector by acquiring a 45 percent stake in the TPD project, initially developed by GEC, a subsidiary of a major Vietnamese conglomerate, in 2022.

The project secured profitability through a 20-year fixed contract with Vietnam Electricity (EVN), the state power company.

Vietnam’s active renewable energy policies were also a key reason for SK Innovation E&S’s entry.

In April, the Vietnamese government announced plans to raise the share of renewable energy to 75 percent by 2050, highlighting its commitment to fostering green energy.

SK Innovation E&S also expects to secure carbon credits through its operations in Vietnam, which is plans to use to meet Korea’s Nationally Determined Contributions (NDC) for greenhouse gas reduction.

A contract ensures that all carbon credits generated by the TPD project – estimated at 260,000 tons over 15 years – will be allocated to SK E&S.

Once the global carbon market matures, these credits could also generate direct revenue.

SK Innovation E&S is also exploring a direct power purchase agreement (DPPA), allowing private users to purchase renewable electricity without going through state utilities. Such contracts can ensure fixed electricity costs for buyers and long-term revenue for producers.

“With DPPA agreements, power producers can also secure long-term revenue streams and operate more stably,” Kwon said. “SK E&S is already in talks with several local companies to sign DPPA contracts.”

Leveraging its experience and capabilities built in Vietnam, SK Innovation E&S plans to expand its global renewable energy business into Southeast Asia, Eastern Europe, and North America.

The company aims to more than double its current global pipeline of around 1GW to at least 2GW by 2030.