EVN’s suspension of Trungnam solar power purchase incorrect: legislative body

Vietnam Electricity’s (EVN) suspension of utilizing 172.12 megawatts of the Trung Nam-Thuan Nam solar power plant's 450MW capacity goes against the government’s solar power development policy, said the National Assembly Standing Committee's Ombudsman Commission.

The solar power plant, located in the central province of Ninh Thuan, was developed by Trungnam Group’s Trung Nam-Thuan Nam Solar Power Company Limited.

Presenting a report at the National Assembly Standing Committee’s working session on Wednesday, the commission said the Prime Minister approved the addition of the 450MW Trung Nam-Thuan Nam solar power plant and its auxiliary works - the Thuan Nam 500kV substation and 500kV and 220kV transmission lines to the national power development plan.

The substation and transmission lines were planned to enter operation in 2020 to transmit the full capacity of this solar power plant and other renewable energy plants in the region.

After more than two years of operation, the project has proven efficient, making great contributions to the national power system. However, it encountered many difficulties and obstacles in the process of commercial operation, especially since the EVN stopped purchasing the plant’s 172.12 MW capacity from September 1, 2022, saying this portion is yet to have a price mechanism.

“Slashing 40% of the capacity means the plant only operates at 60% of its designed capacity, resulting in a loss of nearly VND2 billion ($82,270) per day to the company,” said the report.

In addition, EVN has not yet taken over the management of the substation and transmission lines that the company invested under the project’s commitment. This caused huge difficulties for the investor in repaying bank loans.

Therefore, the Ombudsman Commission held that EVN’s move was a violation of Article 4, prime ministerial Decision 13/QD-TTg dated April 6, 2020 on the mechanism to encourage the development of solar power in Vietnam.

“It also runs counter to the power purchase agreement signed between the parties, causing great economic damage to Trung Nam-Thuan Nam Solar Power Company Limited, wasting investment resources of the society and affecting the investment environment and budget revenue in Ninh Thuan province,” it said.

According to the commission, EVN’s explanation that this capacity portion is yet to have a pricing mechanism has no legal basis, because the Ministry of Industry and Trade issued Circular No. 15 on October 3, 2022 stipulating the method of setting up a price range for electricity generated by transitional solar and wind power plants; and Decision No. 21 dated January 7, 2023 on the price range for electricity generated by transitional solar and wind power plants.

These serve as an important legal basis for EVN to negotiate electricity prices with transitional solar and wind power plants, it noted.

Regarding the fact that EVN has not yet received, managed and operated the 500kV substation and 500kV and 220kV transmission lines, the commission said that currently, Trung Nam-Thuan Nam Company is hiring a transmission unit under EVN to operate these works to ensure the safety of the national power system.

However, since there are no specific regulations on the transfer of assets in this case, EVN has not taken over the management and operation of the works.