Investments

Wind Energy Firms Face Bankruptcy Risk Amid Power Generation Cuts

Prolonged reductions in power generation capacity will significantly diminish the efficiency of wind energy projects. Consequently, businesses may become unable to service their bank loans, leading to financial instability and an elevated risk of bankruptcy.

Administrator

9 November, 2025

129

Wind energy investors and companies have recently petitioned the Ministry of Industry and Trade, the People’s Committee of Quang Tri Province, Vietnam Electricity (EVN), and the National Power System Operation and Market Management Company (NSMO) to limit the curtailment of available power generation capacity for wind farms in Quang Tri Province.

Power output slashed by up to 99% at times

According to wind energy investors and companies, based on the climate characteristics and operational data of wind farms in Quang Tri Province, the period from October to February of the following year is the windiest time of the year, accounting for a significant portion of the annual power generation plan and compensating for the lower output during less windy months. Notably, the final three months of the year (October, November, and December) contribute approximately 70-80% of the total annual capacity.

In 2025, due to the impacts of climate change, both wind availability and power generation capacity have significantly decreased. For instance, in October, favorable wind conditions were only observed from the 20th to the 30th.

However, recent curtailments of available capacity for wind farms in Quang Tri, particularly from late September 2025 onward, have severely impacted the production and operations of power generation units.

Wind energy companies in Quang Tri are facing significant challenges due to curtailments in available power generation capacity. Photo: Hoang Ha

Recent data shows that during these curtailments, power output has been reduced by an average of 20-90%, with some instances reaching up to 99%. These reductions have been prolonged, an unprecedented situation.

From October 1st to October 27th, projects experienced a 50% reduction in available capacity for the entire month, resulting in a 5% decrease in revenue for the year 2025.

If these curtailments continue into November and December, the annual revenue for wind farms in 2025 could decline by 10-15%, or even up to 20%, in addition to previous reductions.

Meanwhile, the profit margin on total revenue (after deducting principal and interest payments, operation and maintenance costs, and equipment procurement) stands at only 5-10%. For projects with average efficiency, the actual profit is less than 5%.

“If power generation curtailments persist, the revenue decline (10-20%) will exceed the profit margin (5-10%). This will severely diminish project efficiency. We will be unable to repay bank loans or cover operational costs, employee welfare, and state budget contributions. The risk of financial collapse, or even bankruptcy, is very real. We are extremely concerned,” investors stated.

Transparency needed in curtailment timing and capacity

In response to this situation, wind energy investors and companies have urged the Ministry of Industry and Trade and relevant agencies to consider and develop solutions to minimize power generation curtailments for wind farms in Quang Tri.

In cases where curtailments are unavoidable, they recommend maintaining reduction levels similar to previous years to ensure businesses can meet bank repayment schedules and recover investments.

Additionally, they propose balancing curtailment timing and ratios, suggesting that capacity reductions should range from 2-5% of output during peak wind periods or be scheduled during hours that minimize impact on wind farm operations.

For wind projects in Quang Tri, curtailments during peak wind periods severely undermine investment efficiency, posing significant challenges for businesses.

They also advocate for technical solutions to reduce curtailments, such as expanding the grid, optimizing supply, promoting renewable energy use, and improving transmission infrastructure.

In cases where capacity reductions are necessary, investors and companies request that EVN and NSMO publicly and transparently disclose information on curtailment timing and capacity for all power plant types, including state-owned, private, and other economic entities, as well as across sectors such as hydropower, wind, and solar. This will ensure fairness and transparency in output allocation, avoiding disproportionate impacts on specific plants.

Furthermore, they emphasize the need to develop and publish clear coordination scenarios early, enabling plants to better plan production and operations, reduce additional costs, and minimize indirect economic losses that are difficult to address in the short term.

They also call on the government to continue promoting renewable energy development, particularly wind energy, to maximize natural potential and align with green growth objectives.

“Wind energy projects require substantial investment, long payback periods, and high risks. Without stable and efficient operations, significant losses and resource wastage will occur, potentially threatening the financial viability of businesses and eroding investor confidence in renewable energy, especially in less developed regions like Quang Tri,” investors stressed.

Tam An

– 22:24 07/11/2025