Investors of renewable energy development projects will be chosen through competitive tenders and they will set the minimum selling price of the output of their projects.
|The Nhi Ha Solar Power Plant in Ninh Thuan Province. Investors of renewable energy projects will be chosen through competitive bidding. - Photo: VNA|
The Ministry of Industry and Trade has directed the Electricity and Renewable Energy Department to coordinate with the World Bank and the Asian Development Bank to study bidding mechanisms for renewable energy projects which are projected to be applied after 2021, Thanh Nien Online newspaper reported.
The ministry’s requirement is aimed at encouraging residents and enterprises to develop solar power projects mainly for their own use. In addition, the purchase prices of solar power will be set through bidding, instead of using a common price for the entire country as was the case earlier. The larger the projects, the lower the price of the output.
In late 2020, Vietnam Electricity Group (EVN) wrote to the Ministry of Industry and Trade proposing three bidding solutions.
Specifically, large projects with favorable connection conditions will be put up for bidding separately and added to the National Electricity Development Plan based on localities’ proposals and the Institute of Energy’s appraisal.
As for the second solution, tenders will be held for projects proposed by localities. These projects are appropriate to localities’ land use plans and investors will be responsible for facilities to connect these projects to power transmission lines owned by EVN.
In addition, tenders will be held in regions or transmission stations designated by the competent agencies.
Associate Professor Dr. Ngo Tri Long, former director of the Ministry of Finance's Price Market Research Institute, threw his support behind the plan to auction solar power projects, saying that the unchanged feed-in tariff for 20 years has resulted in many issues, including an overload on electricity transmission lines.
Bidding will help prevent the boom of solar power projects. Further, prestigious investors will be chosen to ensure the quality of projects, Long added.
According to Dr. Ngo Duc Lam, former deputy head of the Institute of Energy, the bidding of solar power projects is appropriate to the market mechanism and needed to regulate the market and control the development of solar power.
However, tenders must be held in line with the Law on Bidding to ensure fairness and transparency and should be piloted in rooftop solar power projects first, followed by other solar power projects.
A policy allowing investors to bid on solar power prices is being developed by the Vietnamese Ministry of Industry and Trade (MOIT). It is expected to be submitted to the Prime Minister this August and applied this year.
The Ministry of Industry and Trade (MoIT) has had a change of heart on the bidding mechanism for solar power tariffs in Vietnam.