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Determining solar, wind power prices still problematic

The electricity prices of many wind and solar power projects have yet to be determined following the expiration of the FIT (feed in tariff) policy, worrying investors.

The Electricity Regulatory Authority (ERA) has sent a document to the Electricity and Renewable Energy Authority (EREA) on a proposal by EVN about pricing for transitional wind and solar power projects and projects in the future.

Earlier, the Electricity of Vietnam (EVN) proposed that in the immediate time, transitional projects be allowed to join the electricity market to enjoy spot delivery prices that do not exceed the electricity generation price framework of corresponding power types approved by the Ministry of Industry and Trade (MOIT) (the price offering and announcement of capacity for transaction cycles will comply with electricity market regulations).

EVN also proposed that MOIT not ask EVN to negotiate the electricity price and electricity procurement contracts for these projects, because this is not feasible.

The view of ERA on this issue is that EVN, as the buyer in the electricity market, has to take responsibility for negotiating with electricity generators in the electricity market so as to reach agreements about prices and output stipulated in the electricity procurement form in Circular 57 of the Minister of MOIT.

According to ERA, the legal foundation for the units generating renewable power to join the electricity market is Clause 2, Article 4, Circular 45. It says that power plants using renewable energy (not hydraulic power) with a capacity of over 30 MW have the right to join the electricity market.

MOIT reported that there are many solar and wind power projects which have been implemented, but could not meet the requirements in time to enjoy the FIT scheme. 

These include 62 wind power projects with a total capacity of 3,479 MW which have signed contracts on selling electricity to EVN. The electricity selling prices have not been determined because FIT has expired.

Five projects or parts of solar power projects with total capacity of 452.62 MW are also awaiting the determination of selling prices, while other projects are still under execution.

In late August, the Power Trading Company belonging to EVN released a document saying that it would stop using electricity of a part of the 450MW Trung Nam-Thuan Nam that has no pricing mechanism (172.12 MW), beginning on September 1.

Trung Nam Group, the developer of the project, then sent a disprenewable energy, FIT, electricity generation, atch to the government, MOIT and EVN, asking to continue mobilizing capacity even without pricing mechanism.

The 450 MW solar project is a conditional investment project selected by Ninh Thuan province under bidding. The investor has built transformer stations and 500KV transmission lines for a total cost of VND2 trillion.

Luong Bang

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