Thirty-six solar and wind power investors and the Business Association have just submitted a recommendation to the Prime Minister regarding the rectification of shortcomings in the process of building and promulgating a price mechanism for power generation for transitional power plants.

The recommendation analyzes several points that are not suitable for the construction and issuance of the price mechanism for power generation for transitional projects. Specifically, businesses believe that the Ministry of Industry and Trade's (MoIT) promulgation process for Decision 21 seems to have been too hasty and not ensured proper appraisal and thorough consultation.

Assigning the Vietnam Electricity Group to determine the price and use the proposed results without consulting with an independent consultant is not appropriate in practice. The price mechanism for power generation effective from January 1, 2021, for solar projects and from November 1, 2021, for wind projects has not been proposed and submitted by the MoIT to the Prime Minister for consideration and decision according to the provisions of Decision No.13 and Decision No.39.

Given these difficulties, businesses propose that the Prime Minister direct the MoIT to research and resolve these shortcomings to ensure that the issuance of the price mechanism for power generation for transitional projects is consistent with legal regulations. Specifically, the electricity price brackets in Decision No.21 need to be recalculated because the current price brackets are not suitable with Circular No.15 and related documents.

It is necessary to comply fully with procedures for proposing and issuing the price brackets for transitional projects, hire independent consulting units to calculate electricity generation price brackets and comply with requirements for consulting with the Advisory Council and Ministry of Finance to ensure objectivity and transparency.

Businesses also recommend that the Prime Minister direct the MoIT to issue new regulations on model power purchase contracts applicable to wind and solar power transitional projects. These model contracts need to retain policies that encourage renewable energy.

Specifically, the duration for electricity purchase price for transitional projects should be 20 years. The power purchase price should be allowed to convert to the US dollar and adjust according to the fluctuation of the VND/USD exchange rate, or there should be regulations on the rate of inflation and devaluation in electricity generation prices. At the same time, there should be a provision for purchasing the entire electricity output from renewable energy projects at the agreed purchase price at the delivery point.

Source: SGGP