Trungnam Group seeks government help as EVN cuts solar power usage

Trungnam Group has appealed to the government for help as state-owned Vietnam Electricity (EVN) announced it would cut the utilisation rate of power produced at its largest solar farm by 40% due to the lack of a pricing mechanism.

On August 31, EVN’s Electricity Power Trading Company (EPTC) announced it would stop purchasing 172,12 megawatts of solar power without a pricing mechanism from the 450 MW Trung Nam-Thuan Nam solar power plant in the central province of Ninh Thuan from September 1.

Under a document the Trung Nam-Thuan Nam Solar Power Co. Ltd under Trungnam Group sent to the government, the Ministry of Industry and Trade, EVN and EPTC on the same day, the company said the Trung Nam-Thuan Nam solar power project has been operational for more than 16 months and EVN contracted to use all of its power supply, including a part without a pricing mechanism.

The document says this is a conditional investment project with the investor selected by Ninh Thuan province in accordance with the law. In addition, the investor has built a transformer station and the 500kV Thuan Nam-Vinh Tan transmission line at a total cost of nearly VND2 trillion ($84.77 million), which will be offset with sales from the exploitation of the full capacity of 450 MW.

“Slashing 40% of the capacity means the project only operates at 60% of its designed capacity. It will break the investor’s commitment on the financial plan approved by credit institutions, leading to the project's inability to repay loans. Meanwhile, other investors as well as EVN are benefiting from the 500kV transmission line invested by Trungnam," the group argued.

On the other hand, cutting the utilization of power capacity without a pricing mechanism runs counter to the provisions in the power purchase agreement signed between Trungnam and EVN.

Specifically, Article 9 of the agreement clearly states that if EVN cuts usage capacity, it must notify Trungnam 10 days in advance. However, EVN announced the cut on August 31, less than a day before the effective date, said a Trungnam representative.

Therefore, Trungnam asked EVN to consider resuming full utilization of the solar farm’s output. "The company is committed to strictly complying with the regulations and requirements of the relevant state agencies regarding the payment after the price mechanism is applied, without any complaints and lawsuits," the group said.

Regarding the project, on September 15, 2021, Deputy Prime Minister Le Van Thanh chaired a meeting with ministries, sectors and the People's Committee of Ninh Thuan province to respond to recommendations from the project investor.

He ordered EVN to consider prioritizing the utilization of power produced at the plant as the project is investing in transmission infrastructure and supporting power transmission for other projects in the region.

At this meeting, an EVN representative confirmed that for the Trung Nam-Thuan Nam solar power project, EVN would reduce the utilization rate by less than 3%.

Founded in 2004, Trungnam Group has grown into a large private corporation with a multi-industry ecosystem that includes five areas: energy, infrastructure-construction, real estate, information technology and electronics industry.

It has entered a new era of successful and sustainable development thanks to large-scale renewable energy projects, contributing 1.63 gigawatts of energy to the national grid by October 2021. Trungnam Group aims to become a large corporation in Vietnam and reach out to Southeast Asia.