EVN, Trungnam Group hold talks on solutions for solar power usage deadlock

State-owned Vietnam Electricity (EVN) has asked Trungnam Group to put the 172-megawatt capacity portion without a pricing mechanism of its 450 MW solar farm in Ninh Thuan into the competitive power generation market.

The utility's recommendation was presented at a meeting between the two sides on Thursday following a controversial incident causing serious losses for Trungnam Group.

From September 1, EVN stopped purchasing 172.12 MW of solar power from Trungnam Group's Trung Nam-Thuan Nam solar power plant in the south-central province of Ninh Thuan, saying this portion is yet to have a pricing mechanism.

At present, EVN holds a monopoly on power transmission and distribution. But on the country's "competitive power generation market", power generators will compete with each other to sell electricity to the sole wholesale unit - EVN’s Electricity Power Trading Company (EPTC).

The move will optimize the capacity of the Trung Nam-Thuan Nam solar power plant, benefiting the investor, CEO of EVN Tran Dinh Nhan told representatives of Trungnam Group at their meeting.

Nhan affirmed that EVN always shows its goodwill in solving problems facing power source investors in general and Trungnam Group in particular. However, as a state-owned enterprise, EVN, in its course of operation, must follow the regulations of state management agencies in the spirit of respecting the law, he noted.

EVN will closely coordinate with Trungnam Group in the process of proposing the Ministry of Industry and Trade complete the legal framework to put this portion of solar power into the electricity market, he said, adding that the time for joining the electricity market will be decided by the group.

Trungnam leaders said they would consider EVN’s recommendation.

Previously, under a petition that Trungnam sent to the government, the group claimed that slashing 40% of the capacity means the project only operates at 60% of its designed capacity.

"It will break the investor’s commitment on the financial plan approved by credit institutions, leading to the project's inability to repay loans. On the other hand, cutting the utilization of power capacity without a pricing mechanism runs counter to the provisions in the power purchase agreement signed between Trungnam and EVN," it wrote.

EVN has proposed the industry ministry allows transitional wind and solar power projects without a pricing mechanism to join the competitive power generation market. Their power will be bought at spot prices that do not exceed those set by the industry ministry for the corresponding types of power source.