EVN proposes solar, wind power purchase prices lower than incentivized FiTs

State utility Vietnam Electricity (EVN) has proposed to the Ministry of Industry and Trade a price frame to buy wind and solar power in Vietnam, with prices 12-27% lower than preferential feed-in-tariffs.

The frame is suggested for renewable energy projects that have missed the deadline for incentivized feed-in-tariffs (FiTs). Fail-to-meet-deadline projects are often referred to as "transitional renewable energy projects".

The 20-year preferential FiTs are 9.35 U.S. cents per kWh (Decision 11/2017) and 7.09-8.38 U.S. cents per kWh (Decision 13/2020) for solar power projects that became operational by December 31, 2020; and 8.35-9.8 U.S. cents per kWh for wind power projects that became operational by November 1, 2021.

In its November 20 proposal to the ministry, EVN said it had collected data from 208 renewable power plants until November 16, 2022 to build the price frame, which covers four types of electricity generation - ground-mounted solar, floating solar, inland wind, and offshore wind.

The proposed purchase prices per kWh for the four kinds are VND1,187.96 (equal to 4.8 U.S. cents); VND1,569.83 (6.3 U.S. cents); VND1,590.88 (6.4 U.S. cents); and VND1,944.91 (7.8 U.S. cents), respectively.

EVN said it had used data provided by investors, so there was not enough ground to assure the accuracy, reasonableness and validity of the data. It added the investors were fully responsible for the accuracy, reasonableness and validity of the reported data and compliance with legal regulations in the project implementation because EVN’s hypothetical calculated parameters would be verified and decided by the Ministry of Industry and Trade (MoIT).

The utility said it had been urgently assigned by the MoIT to build the price frame, so it did not have enough time to seek an independent consultancy. EVN wanted the ministry to engage independent consultants or advisory commissions as regulated by laws to look through its proposed frame before making final conclusions.

At a renewable energy workshop held by The Investor on November 18, Pham Nguyen Hung, deputy director of the MoIT's Electricity and Renewable Energy Authority (EREA), disclosed the timeline for such a long-awaited price frame. He said the ministry was set to introduce the price frame by end-November, which will serve as a foundation for EVN to negotiate purchase prices with generators. He said FiTs already signed would remain valid.

On October 3, the ministry issued Circular 15 stipulating a method of building a price bracket for the fail-to-meet-deadline renewable projects (4,000 megawatts). Hung stressed that this circular was just for the "transitional projects"; and as for new projects, the ministry has proposed a mechanism on negotiations and power purchase agreements for certain points of time.