SK Ecoplant, Vietnam’s BCGE tie up for 700 MW wind, solar projects

SK Ecoplant Co., a South Korean construction engineering and waste management company, said on Friday it has agreed with BCG Energy (BCGE), a wholly owned subsidiary of Vietnam's Bamboo Capital Group, to jointly pursue solar and wind power projects in Vietnam.

Kim Jung-hoon, chief of SK Ecoplant’s Solutions Business Unit, and Pham Minh Tuan, vice chairman of Bamboo Capital Group and chief executive of BCG Energy, signed a memorandum of understanding on the partnership in Seoul.

Under the initial agreement, SK and BCGE will jointly develop 700 megawatts (MW) of renewable energy projects in Vietnam – 300 MW of land wind power, 300 MW of rooftop solar power and 100 MW of land solar power.

The projects include wind power generation in Gia Lai, a highland province in central Vietnam with abundant wind.

BCGE is an established local developer for both wind and solar projects. It already operates a solar power plant with a capacity of about 600 MW in Vietnam. BCGE’s wind power generation projects currently under development exceed 800 MW.

CARBON RIGHTS

SK Ecoplant, formerly SK Engineering & Construction Co., has been striving to transform into an eco-friendly energy company from a construction firm.

The company said on Friday it will participate in projects aimed at securing carbon rights to the benefits generated from carbon emission reductions, by selling carbon credits in voluntary or compliance carbon markets or through a government-sponsored payment for ecosystem services (PES) scheme.

In 2021, SK Ecoplant registered its clean development mechanism (CDM) project in Vietnam with the United Nations Framework Convention on Climate Change (UNFCCC).

Under the CDM scheme, SK Ecoplant will receive carbon rights from the UN body proportionate to the performance of its greenhouse gas reduction projects.

Vietnam is a developing country with 10% annual growth in energy demand. The Southeast Asian nation is investing heavily in the renewable energy sector to slash its dependence on fossil fuels.

HUGE GROWTH POTENTIAL IN VIETNAM

Industry officials said there is enormous potential in solar power generation projects in Vietnam given the country’s abundant sunlight. The country also has plenty of islands with average annual wind speeds exceeding 5 meters per second – favorable conditions for wind power generation.

According to the Korea Trade Investment Promotion Agency (KOTRA), Vietnam’s renewable energy generation capacity more than quadrupled to 21.6 gigawatts (GW) in 2023 from 5.2 GW in 2019.

For years, SK Ecoplant has been striving to enhance its presence in the global renewable energy business by participating in solar and wind power projects and securing engineering, procurement and construction (EPC) projects.

Last August, SK was part of a Korean consortium that won a $447 million solar power project in Concho County, Texas.

This February, SK Ecoplant signed a deal to supply renewable energy to SK Hynix Inc. from a 100 MW power plant under a power purchase agreement (PPA).

Write to In-Hyeok Lee at twopeople@hankyung.com

In-Soo Nam edited this article.