No price talks for renewables projects missing FiT deadline: EVN

By Pham Thao
Wed, September 21, 2022 | 7:00 am GTM+7

Vietnam Electricity (EVN) says it can’t negotiate prices with wind and solar power projects that have failed to meet the country’s feed-in-tariff (FiT) deadline of November 1, 2021.

Renewable energy accounted for 13.7% of Vietnam's total power output in the first eight months of the year, according to EVN. Photo courtesy of Orsted.

Renewable energy accounted for 13.7% of Vietnam's total power output in the first eight months of the year, according to EVN. Photo courtesy of Orsted.

The state-run power utility has explained to the Ministry of Industry and Trade (MoIT) that negotiating power purchase agreements (PPAs) with such renewables projects “is not feasible under Vietnamese conditions.”

“Such negotiations will be prolonged because these projects are at different stages,” EVN said, adding that the pricing mechanism cannot be retroactive if the PPAs are for large amounts.

The 20-year preferential FiT was 9.35 cents per kWh (Decision 11/2017) and 7.09-8.38 cents per kWh (Decision 13/2020) for solar power projects; and 8.35-9.8 cents per kWh for wind power projects that became operational by November 1, 2021.

The ministry had proposed in July a transitional mechanism for the wind and solar power projects that missed the FiT deadline. Under this proposal, EVN would negotiate purchase prices with investors under the ministry’s instructions in order to unlock domestic and international investments in the projects.

EVN has argued that pricing negotiation is not feasible because calculating the average annual output of wind and solar power projects will be more complicated than traditional power plants. Moreover, it is not clear which agency will be responsible for data accuracy, it said.

In addition, negotiations based on the total investment and the average power output declared by the investor would generate problems that EVN might not be able to explain. For example, projects located next to each other might get different prices, or projects that begun commercial operations earlier get lower prices.

Another reason is that most countries have shifted to a bidding mechanism after their FiT schemes were over.

As a bidding mechanism is not available in Vietnam, the utility suggested that these projects should be allowed to join the electricity market and unlock their investment with spot prices that are not higher than MoIT-set limits.

For the long term, EVN proposed a two-step bidding mechanism. First, select an investor based on the Law on Investment, with deadline for project implemenation. If the investor fails to meet the deadline, authorities have the right to allocate it to another investor.

In the second step, the investor can choose to join the electricity market or bid to sign a PPA and develop the project. MoIT would be the decision maker in such bids.

Many wind and solar power projects that were developed with an aim of benefitting from the incentives but missed the deadline are yet to have their electricity prices determined despite investments of hundreds of millions of U.S. dollars.

Currently, 62 wind power projects with a total capacity of nearly 3,480 MW have signed power purchase contracts with EVN, but are yet to have purchase prices fixed as they failed to meet the incentive deadline.

Five solar power projects or project components with a total capacity of 452.62 MW are also awaiting determination of electricity prices. In addition, a number of renewable energy projects are still being developed.

EVN data shows Vietnam’s total capacity of operational wind and solar projects accounts for nearly 27% of the total installed capacity, including 16,545 megawatts of ground and roof solar power, and 4,126 MW of wind power.

Vietnam's power system generated 181.92 billion kWh in the first eight months of 2022, up 5% year-on-year, according to EVN data.

In the period, coal-fired power accounted for the biggest portion of electricity generated at 71.67 billion kWh, or 39.4%. Other sources included hydropower - 63.25 billion kWh, or 34.8%; renewable energy - 24.95 billion kWh, or 13.7%; gas-fired power - 19.67 billion kWh, or 10.8%; and imported electricity - 1.91 billion kWh, or 1%.

Comments (0)
  • Read More
Trungnam Group's shortcomings a cause of power purchase deadlock: industry ministry

Trungnam Group's shortcomings a cause of power purchase deadlock: industry ministry

The Trungnam Group's “shortcomings” have led to Vietnam Electricity (EVN) stopping purchase of 40% of its Trung Nam-Thuan Nam solar farm's capacity, says a deputy minister of industry and trade.

Energy - Sun, October 2, 2022 | 11:21 pm GTM+7

Vietnam banking system's bad debts hit 1.7%

Vietnam banking system's bad debts hit 1.7%

The Vietnamese banking system's bad debt ratio remained safe at 1.7% by the end of July, the central bank says in a report sent to the National Assembly’s Economic Committee.

Banking - Sun, October 2, 2022 | 3:51 pm GTM+7

Vietnam earns $40.8 bln from agriculture, fisheries, forestry exports

Vietnam earns $40.8 bln from agriculture, fisheries, forestry exports

Vietnam earned $40.8 billion from exporting agriculture, forestry and fisheries products in the first nine months of this year, up 15.2% year-on-year.

Economy - Sun, October 2, 2022 | 2:22 pm GTM+7

70% of land for Hanoi's Ring Road 4 project ready by next June

70% of land for Hanoi's Ring Road 4 project ready by next June

Hanoi, Bac Ninh and Hung Yen authorities have committed to handing over 1,341 hectares of land, or 70%, before June 30 next year so the Hanoi Ring Road 4 project can break ground as scheduled.

Infrastructure - Sun, October 2, 2022 | 2:00 pm GTM+7

Formosa thermal power plant explosion kills worker

Formosa thermal power plant explosion kills worker

Three workers were conducting maintenance work on gas pipelines at Formosa’s thermal power plant in Ha Tinh province when an explosion occurred, killing one and severely injuring the other two.

Society - Sun, October 2, 2022 | 11:51 am GTM+7

Rules need to make public bond issuance outpace private placement: experts

Rules need to make public bond issuance outpace private placement: experts

Vietnamese regulators need to fasten and simplify legal steps to encourage public bond issuances as enterprises usually opt for private placements, say experts.

Finance - Sun, October 2, 2022 | 10:36 am GTM+7

VN-Index plunges to 30-month low

VN-Index plunges to 30-month low

Vietnam’s benchmark VN-Index fell almost 12% in September compared with August, making it the exchange's biggest one-month drop in 30 months.

Finance - Sun, October 2, 2022 | 8:47 am GTM+7

Vietnam welcomes 1.87 mln foreigners, South Koreans in the lead

Vietnam welcomes 1.87 mln foreigners, South Koreans in the lead

Vietnam welcomed 1.87 million foreign visitors in the first nine months of the year, up 16.4 times year-on-year, with South Korea and the U.S. leading the pack.

Travel - Sat, October 1, 2022 | 8:26 pm GTM+7

US firm Molex expands Vietnam facility with solar panel installation

US firm Molex expands Vietnam facility with solar panel installation

Molex, a U.S. manufacturer of electronic, electrical and fiber optic connectivity systems, has expanded its manufacturing facility in Hanoi with solar panel installation.

Industries - Sat, October 1, 2022 | 6:46 pm GTM+7

EVN, Trungnam Group hold talks on solutions for solar power usage deadlock

EVN, Trungnam Group hold talks on solutions for solar power usage deadlock

State-owned Vietnam Electricity (EVN) has asked Trungnam Group to put the 172-megawatt capacity portion without a pricing mechanism of its 450 MW solar farm in Ninh Thuan into the competitive power generation market.

Energy - Sat, October 1, 2022 | 3:54 pm GTM+7

Danish firm Spectre opens third Vietnam factory in An Giang

Danish firm Spectre opens third Vietnam factory in An Giang

Spectre, a Danish maker of functional garments for outdoor sports brands, started operating its $17 million factory in An Giang province Friday, the company’s third in Vietnam.

Industries - Sat, October 1, 2022 | 3:06 pm GTM+7

Foreign firm accountant gets death sentence in $9.6 mln corruption case

Foreign firm accountant gets death sentence in $9.6 mln corruption case

A Dong Thap province court on Friday handed a death sentence to Nguyen Trung Thanh, chief accountant of Filipino-invested Pilmico Vietnam, on corruption charges.

Society - Sat, October 1, 2022 | 2:43 pm GTM+7

Vietnam’s nation brand valued at $431 billion

Vietnam’s nation brand valued at $431 billion

Vietnam has seen the third biggest brand value gain over the course of the pandemic in absolute terms, up $184 billion year-on-year to $431 billion in 2022, says London-based Brand Finance.

Economy - Sat, October 1, 2022 | 11:22 am GTM+7

Former deputy health minister gets year off jail term

Former deputy health minister gets year off jail term

An appeals court in Hanoi has reduced the jail term for former deputy minister of health Truong Quoc Cuong to three years, one year less than sentence awarded by the court of first instance in May.

Society - Sat, October 1, 2022 | 11:05 am GTM+7

Fever cools, townhouse, villa segment turns lethargic in major cities

Fever cools, townhouse, villa segment turns lethargic in major cities

Liquidity in the townhouse and villa segment, once feverishly high in both Hanoi and Ho Chi Minh City, has been drying up in recent months.

Real Estate - Sat, October 1, 2022 | 9:50 am GTM+7

AES gets ministerial nod for 2,250 MW LNG power project in Binh Thuan

AES gets ministerial nod for 2,250 MW LNG power project in Binh Thuan

American energy corporation AES has received in-principle approval from the Ministry of Industry and Trade for its VND50,432 billion ($2.11 billion) Son My 2 LNG-to-power project in the south-central province of Binh Thuan.

Energy - Fri, September 30, 2022 | 9:24 pm GTM+7