Wind and solar power projects that miss the commercial operation deadline to enjoy feed-in-tariffs in Vietnam will shift to an auction system, the Ministry of Industry and Trade has proposed.
The ministry wants the preferential rates to be no longer applicable by the end of 2025.
The proposal came when developers that missed the commercial operation deadline are petitioning for a feed-in-tariff (FiT) extension, saying economic lockdowns caused by the Covid-19 pandemic resulted in such failure.
The ministry proposed state utility Vietnam Electricity (EVN) is the buyer in the auction system, set to be launched this year, with the auction prices applicable until 2025. After that, developers will take new auctions based on regulations to be issued by the government and the ministry.
Vietnam dong will be used for the auction system, and rates will not be adjusted in line with U.S. dollar forex.
In 2018, the government set the 20-year FiT at 8.5 US cents (VND1,927)/kWh for onshore wind power projects and at 9.8 US cents (VND2,223)/kWh for offshore wind projects commissioned before November 1, 2021. An auction system will replace the FiTs after 2023.
In 2020, the government launched new FiTs for ground-mounted, rooftop and floating solar projects that entered commercial operation before December 31, 2020. FiT per kWh were determined based on three technology types: 7.09 US cents (VND1,644) for ground-mounted solar projects, 7.69 US cents (VND1,783) for floating solar, and 8.38 US cents (VND1,943) for rooftop solar.