Investors rattled as new national power plan likely to abandon many solar projects

Many solar power investors are calling for government help as their projects, which were listed in Vietnam’s existing power development plan, might be excluded from the country’s upcoming new plan.

A number of companies investing in solar power in Dak Lak, Gia Lai, Binh Phuoc, Long An and Ba Ria-Vung Tau provinces recently sent a petition to the Government and the Ministry of Industry and Trade. Accordingly, they asked for the projects that were included in the amended power plan VII to go ahead with their power generation schedule in the period of 2021-2025.

Concerns have arisen over the risks the upcoming power development plan (plan VIII) might exclude such projects as they are yet to be constructed.

Previously, in February, a Government Office release quoted Deputy Prime Minister Le Van Thanh as saying that “to ensure the efficiency of the economy”, the projects that were listed in the amended plan VII for the period 2021-2030, but have not yet been deployed (about 6,500 MW), should be left out of the new plan VIII.

According to the petitioners, after having the government’s approval to appear in the amended plan VII under the prime minister’s Decision 11/2017/QD-TTg, they have conducted surveys, bought land, fulfilled procedures, reached agreements with EPC contractors and made other preparations for the projects.

Dealing with investment procedures, they claimed they encountered many difficulties due to red tape, leading to the inability to complete the project before July 1, 2019 to enjoy the preferential feed-in-tariffs as the government regulated.

Referring to the requirement “to ensure the efficiency of the economy” from Deputy Prime Minister Thanh, the petitioners argued that solar power is actually more efficient for the economy as the selling price of solar power is only 7.09 UScent/kWh, lower than that of offshore wind power (9.8 UScent/kWh) and biomass power (8.47 UScent/kWh).

“According to the global trend, the price of solar power will continue to decrease even with the installation of storage systems (20% of total plant capacity) and it is still cheaper than other renewable power sources, including hydrogen,” they stressed

The petitioners added that, under Clause 3, Article 4 of the 2017 Planning Law, the basic principles in planning are “ensure compliance, continuity, inheritance, stability, and hierarchy in the national planning system”. This means the projects that were present in the amended plan VII, but have not yet been implemented due to mechanism problems, must be listed in the new plan.

The removal of such projects from the new plan would have great consequences on the economy and damage the reputation of the investment environment, the petition noted.

“The investors have already incurred many hefty expenses. If the projects are left out of the new plan, they will lose all the money spent,” they said.

Under the prime minister's Decision 13/2020/QĐ-TTg, for rooftop solar power projects to enjoy the feed-in-tariff of 8.38 Uscent/kWh, projects must generate electricity from July 1, 2019 to December 31, 2020.