Seven renewable power projects that missed out on preferential feed-in-tariffs (FiTs) with a total capacity of more than 430.2 megawatts have completed procedures for commercial operations.
They are among nine transitional renewable power projects that had submitted application document for a commercial operation date (COD) to be connected to the national grid as of Wednesday afternoon, according to state utility Vietnam Electricity (EVN).
Bamboo Capital Group's Phu My solar power plant in the central province of Binh Dinh was Vietnam's first transitional renewable energy project to obtain a COD. Construction started on May 29, 2020, at the 325-hectare Phu My solar power plant, which is the largest of its kind in the central region with a capacity of 330 megawatts and a total investment of more than VND6.5 trillion ($276.7 million).
On December 31, 2020, the plant was put into commercial operation with 216 MW out of its total capacity, enjoying a price of 7.09 U.S. cents per kWh for 20 years under Decision 13.
After more than two years waiting for a pricing mechanism for transitional projects, the remaining 114 MW of the Phu My solar power plant was officially approved for commercial operation on May 30, 2023.
Thanks to the seven projects, the total capacity of transitional renewable power connected to the grid has doubled.
In addition, the Ministry of Industry and Trade (MoIT) has approved temporary prices for 40 other projects.
So far, 59 transitional renewable power projects without pricing mechanisms have submitted applications for price negotiations and power purchase agreements (PPA). Investors of 85% of the projects have proposed temporary prices equal to 50% of the ceiling levels set by the MoIT.
According to the new price bracket, the maximum purchase price for transitional solar power projects is VND1,185-1,508 (5.0-6.4 U.S. cents) per kWh, depending on the type and excluding VAT. Meanwhile, the ceiling price for transitional wind power projects is VND1,587-1,816 per kWh (6.8-7.7 U.S. cents).
EVN has completed temporary electricity price negotiations and initialed PPAs with developers of 46 projects.
Meanwhile, the MoIT has okayed the quality of 19 projects or project segments, granted electricity generation permits to 27 projects, and extended investment plans for 22 others.
The ministry, EVN and relevant units are accelerating the removal of obstacles related to documents and procedures for temporary price negotiations and PPA in order to put renewable power projects into commercial operation amid the risk of power shortages in the dry season.
Several dialogues between the MoIT, EVN and developers of transitional wind renewable energy projects have been held to remove difficulties.
Eighty-four solar and wind power projects with a total capacity of more than 4,600 MW missed deadlines for commercial operation. Of those, 34 transitional projects (28 wind and six solar power) with a total capacity of nearly 2,100 MW have been completed and put on trial runs.
These projects will not enjoy FiTs for 20 years as they missed out on the government's deadline and have to negotiate prices with EVN at 20-30% lower than the 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.