Fifteen transitional renewable energy projects reach commercial operations

Fifteen transitional renewable power projects that missed out on preferential feed-in-tariffs (FiTs) with a total capacity of nearly 735 megawatts have completed procedures for commercial operations, adding 154 million kWh of electricity to the national grid.

National utility EVN said Friday that these 15 are among 85 transitional renewable power projects with a total capacity of more than 4,600 MW that have to negotiate electricity prices with EVN under the new prices bracket issued by the Ministry of Industry and Trade (MoIT) at the beginning of the year.

The new prices bracket was introduced for firms that had missed out on the original preferential feed-in-tariffs (FiTs) deadline.

According to EVN, the average daily output of the 15 projects or project segments is about 3.2 million kWh, accounting for about 0.4% of the total mobilized electricity.

Of the 85 transitional renewable power projects, 72 with a total capacity of 3,932 MW had submitted applications for price negotiations and power purchase agreements (PPAs), with 83% proposing temporary prices equal to 50% of the ceiling levels set by the MoIT, according to EVN.

Under the bracket, the maximum purchase price for transitional solar power projects has been fixed at VND1,185-1,508 (5.0-6.4 U.S. cents) per kWh excluding VAT, depending on the type. The ceiling price for transitional wind power projects will be VND1,587-1,816 per kWh (6.8-7.7 U.S. cents).

The ministry has approved temporary prices for 58 projects with a total capacity of more than 3,181 MW. However, for a valid commercial operation date (COD), these projects must complete procedures for connection and work acceptance as well as submit other relevant documents including investment policy extension decision and electricity generation permit.

In May, the MoIT had said that transitional renewable energy projects were not allowed to negotiate temporary prices with EVN because they lacked the necessary legal documents.

It said many developers have been unable to complete legal documents to obtain an electricity generation permit – a necessary procedure under the Electricity Law for a power project to be utilized – because they had violated regulations on planning, land and construction.

“This is the main reason for delays to the preparation and submission of documents to the authorities,” a ministry statement said.

Currently, there are still 13 transitional renewable energy projects that have not yet submitted dossiers for price negotiations and PPAs to the Power Trading Company under EVN. These projects do not enjoy FiTs for 20 years as they missed out on the government's power generation deadline and have to negotiate prices with EVN at 20-30% lower than FiTs.

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 (Decision 39/2018) for wind power projects that became operational by November 1, 2021.