Only 20 transitional renewable projects send power to national grid

Only 20 transitional renewable energy projects or project segments, or 20% of those that missed out on the Vietnamese government's preferential feed-in-tariffs (FiTs), have been put into commercial operation.

State utility Vietnam Electricity (EVN) released the figure to Prime Minister Pham Minh Chinh on Tuesday while reporting the outcome of price negotiations with transitional renewable projects.

The 85 projects or project segments that missed out on the preferential FiTs have a total capacity of 4,600 MW. By August 25, 79 projects or 94% had submitted documents to EVN for price negotiations. Six projects with a total capacity of 284.7 MW, have failed to do so despite many requests.

Among them, 68 projects with a capacity of over 3,633 MW have reached price agreements with EVN. Of which, 67 have agreed with proposed temporary prices equal to 50% of the ceiling levels set by the Ministry of Industry and Trade (MoIT). That means VND754-908 per kWh (3-3.8 U.S. cents), excluding VAT, depending on the type.

Among the projects that meet technical requirements, 43 are testing operations. So far, only 20 transitional projects have been put into commercial operations, offering more than 1,171 MW to the national grid.

EVN and the investors have negotiated prices and initialed power purchase agreements (PPAs) for 61 projects, 58 of which with over 3,181 MW have had temporary prices approved by the MoIT.

Eighty-five solar and wind power projects with a total capacity of more than 4,600 MW have missed deadlines for commercial operations. These projects will not enjoy FiTs for 20 years as they missed out on the government's power generation deadline and will 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.

In May, the MoIT said that several 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.