There are 85 renewable electricity projects, including eight solar and 77 wind power projects with a total capacity of over 4,700MW under execution. These projects were not able to enjoy the former FIT (feed in tariff) preferential pricing scheme because they did not meet the COD (commercial operation date) by November 1, 2021 for wind power and December 2020 for solar power.
On January 7, 2023, the Minister of Industry and Trade (MOIT) finally issued a price framework for transitional solar and wind power projects. The tardiness was partially blamed on MOIT.
From January to mid-May, very few investors sent dossiers to the Electricity Power Trading Company (EPTC) to register for negotiations about electricity prices for wind and solar power plants, as prices offered in most cases were too low.
The situation seemed to change thanks to a decision by Deputy Prime Minister Tran Hong Ha in Notice 182 dated May 17, 2023.
MOIT was asked to release a document prior to May 20, 2023, instructing EVN to negotiate with project developers about provisional prices applied to projects, to generate electricity and connect to the national grid. After the negotiations and the two sides reach agreements, payment would be implemented in accordance with official prices.
Setting provisional prices to help remove difficulties for renewable electricity projects whose prices have not been fixed is a breakthrough solution by the government. The policy will allow the plants to provide electricity to the national grid instead of lying idle, and allow investors to take back investment capital.
“We are thirsty for money. As much as $300 million has been injected into renewable projects but we still don’t have any revenue. We want to put the projects into operation as soon as possible to get money,” an investor said.
At present, investors feel impatient, and EVN and MOIT are under pressure.
According to EVN EPTC, as of the end of May 26, the company had completed negotiations, signed minutes and initiated the PPA (power purchase agreements) with 40 out of 40 project developers. The provisional price is 50 percent of the ceiling price level.
As of May 26, 19 projects and parts of projects had MOIT’s approval for provisional prices and had PPAs signed.
However, only five projects with total capacity of 303MW have completed the experiment and they have been following COD procedures to prepare for commercial electricity generation.
As such, there are still 32 out of 85 projects with total capacity of 1,576.05MW whose investors have not sent dossiers to EPTC for price negotiations. The investors are possibly waiting for MOIT’s move to change the ceiling price and other procedures.
However, successful negotiations with 40 projects will help investors ease their financial burden and increase electricity usage amid shortages.
Though the provisional prices have been approved by the MOIT, investors will have to implement some more procedures to generate electricity to the national grid.
Deputy Prime Minister Tran Hong Ha emphasized that EVN would only mobilize electricity of the projects which have ‘completed all legal procedures’.
However, as of May 26, only 26 projects got licenses and 18 projects got certificates on work official acceptance. This means that many projects still lack legal records.
EVN recently met with 40 investors and asked if they got enough required documents but nearly all projects lacked necessary documents. Only five projects could satisfy the requirements to provide electricity to the national grid.