The Norwegian state energy giant Equinor-ASA (NYSE:EQNR) has left plans to invest in Vietnam’s offshore wind sector, in a major blow to the country’s green energy ambitions.

According to the World Bank, Vietnam has seen a surge in interest in its clean energy sector in recent years thanks to strong winds in shallow waters off densely populated coastal areas. Unfortunately, recent political unrest in the country has hampered regulatory reforms and discouraged investors. Last year, for example, the Danish offshore wind giant Ørsted A/S (OTCPK:DNNGY) has shelved its multi-gigawatt offshore wind plans, again citing regulatory challenges.

“We have decided to cease our business development in Vietnam and close our office in Hanoi,” Magnus Frantzen Eidsvold, a spokesman for Equinor, said in an interview.

This is the first time Equinor has exited offshore wind development, having previously exited more than a dozen fossil fuel projects to focus on renewables and low-carbon systems.

Currently, Vietnam has no installed offshore wind capacity, but plans to install wind farms to build 6 gigawatts (GW) by 2030, equivalent to 4% of planned capacity. The offshore wind push is part of the country’s goal to reduce reliance on coal generation and achieve net zero carbon emissions by mid-century. The communist government is pushing to award the first offshore wind pilot project to state-owned companies, a move opposed by investors who say the domestic sector lacks capacity.

Currently 40% of the world’s population lives within 60 miles of the oceanmaking offshore wind an attractive alternative for clean energy. Unfortunately, dozens of offshore wind projects around the world have been postponed or cancelled in recent years as costs spiral out of control and supply chain disruptions increase. Last year, Ørsted cancelled the long-awaited Ocean Wind 1 and Ocean Wind 2 projects in the US, citing rising interest rates, high inflation and supply chain bottlenecks. The two projects would have added just over 2.2 gigawatts to the New Jersey grid, enough energy to power more than a million homes.

By Alex Kimani for Oilprice.com

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