Trungnam Group's 'shortcomings' behind power purchase deadlock: deputy minister

Trungnam Group's failure to complete required precedures has prompted Vietnam Electricity (EVN) to stop purchasing 40% of its solar farm's capacity, says a deputy minister of industry and trade.

At a government press briefing Saturday, Do Thang Hai said: “Trungnam Group has shortcomings as it has not completed documents for appraising and approving the 172 MW capacity portion in line with the law. EVN did purchase the portion and put it into the power grid, but it is yet to have a pricing mechanism.”

“Trung Nam needs to coordinate with relevant authorities to complete documents in line with the laws,” he added.

From September 1, state utility EVN stopped purchasing 172.12 MW from the 450 MW Trung Nam-Thuan Nam solar power plant in the south-central province of Ninh Thuan, saying this portion is yet to have a pricing mechanism.

Trungnam then sent a petition to the government, claiming that slashing 40% of the project’s capacity would mean severe losses for it.

“It will break the investor’s commitment on the financial plan approved by credit institutions, leading to the project’s inability to repay loans.

“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,” the group wrote.

On Thursday, EVN and Trungnam Group held talks on solutions for the deadlock. At the meeting, the utility asked Trungnam to put the 172-megawatt portion into the “competitive power generation market”.

EVN currently holds a monopoly on power transmission and distribution. But in the country’s “competitive power generation market”, generators will compete with each other to sell electricity to the sole wholesale unit - EVN’s Electricity Power Trading Company (EPTC).

Going the competitive power generation market would optimize the capacity of the power plant, benefiting the investor, CEO of EVN Tran Dinh Nhan told representatives of Trungnam Group at their meeting.

“EVN always shows its goodwill in solving problems facing power source investors in general and Trungnam Group in particular. However, as a state-owned enterprise, EVN, in its course of operation, must follow the regulations of state management agencies in the spirit of respecting the law,” Nhan noted.

EVN will closely coordinate with Trungnam Group in the process of proposing the Ministry of Industry and Trade complete the legal framework to put this portion of solar power into the electricity market, he said, adding that the time for joining the electricity market will be decided by the group.

In response, Trungnam leaders said they would consider EVN’s recommendation.