Prime Minister Nguyen Tan Dung has asked the Ministry of Trade and Industry to complete a study of the project by May, said Ta Van Huong, head of the ministry's energy department.
The size of the project, slated for the central coastal province of Ninh Thuan, was not entirely clear.
Huong referred to a capacity of 120 megawatts, but Tran Viet Ngai, head of the Vietnam Energy Association, said the study would look at a project totalling 400 megawatts. The lead company would be the state-owned electric monopoly Electricity of Vietnam Group (EVN), but private companies could be involved.
Danish development assistance is to help finance the project, the official Vietnam News reported.
Ninh Thuan's provincial government has approved five private wind power projects already, but none have begun construction.
One of Ninh Thuan's projects, financed by the German wind-power company EAB Projektmanagement GmbH, suffered a blow in December when its Vietnamese chief executive was arrested for fraud.
Nguyen Xuan Thuy, head of EAB Vietwind Ltd, told police he had lied about having a doctorate in science and had fraudulently induced European investors to back the company.
Only one wind farm, in the south-central province of Binh Thuan, is currently functioning in Vietnam. Renewable Energy Vietnam JSC operates five turbines with a capacity of 7.5 megawatts and is scheduled to expand to 18 turbines and 18 megawatts by the end of the year.
Vietnam's 3,000 kilometers of coastline afford substantial wind power potential, and 8.6 percent of the country enjoys high-velocity winds.
But Ngai said wind power projects were being held back by low electricity prices. He estimated wind power costs about 12 cents per kilowatt hour to produce while price controls limit EVN to paying 4.5 cents per kilowatt hour on average.
Huong said his ministry would submit a draft decree on incentives for wind power to the government soon.
