Vietnam considers bidding on solar power prices

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 projects to attend bids must be ones listed in the power development program approved by appropriate agencies and which enter commercial operation prior to June 30, 2022 and have the capability of releasing capacity at the COD (commercial operate date), according to VnExpress.

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After chosen, investors will have to follow procedures for the bidding, including site clearance, design and other professional agreements.

The bidding will be organized separately for two different types of solar power projects – ground-mounted and floating solar power.

The maximum total capacity of the projects of one investor must not be higher than 20 percent of total capacity of projects to attend bids.

A bid will be considered valid if at least five investors attend the bid and observe legal procedures for bidding.

At present, under Decision 13/2020, the solar projects licensed prior to November 23, 2019 and put into commercial operation prior to December 31, 2020 will still enjoy the FIT (feed in tariff) mechanism. Other projects will obtain electricity sale contracts through bidding.

As for the projects in Ninh Thuan province, listed in the power development program, and to be put into commercial operation prior to January 1, 2021, they have the price of 9.35 cent per kwh (VND2,086). The price doesn’t include VAT and will be applied for 20 years.

At present, under Decision 13/2020, the solar projects licensed prior to November 23, 2019 and put into commercial operation prior to December 31, 2020 will still enjoy the FIT (feed in tariff) mechanism. Other projects will obtain electricity sale contracts through bidding.

Prior to that, in a document to the government last April, MOIT suggested three bidding solutions: bidding in accordance with projects; bidding at transformer stations; and bidding to choose investors for specific projects with the large scale of over 100 MW.

The ministry believed that the first solution was the best. The projects to be chosen are the ones which can satisfy technical requirements, and offer competitive prices (from low to high until EVN can mobilize the total capacity of 1,000 MW).

The ceiling prices are 7.69 cent per kwh for floating solar power and 7.09 cent per kwh for ground mounted solar power.

Tran Viet Ngai, chair of the Vietnam Energy Association (VEA), believes that bidding for solar power prices is necessary to prevent solar power projects from developing uncontrollably as seen currently.

Many solar power investors have expressed concern that they may fail to put solar power plants into operation by the end of this year to be able to enjoy the FIT because of Covid-19 which has affected the import of equipment and the use of labor force.

Translated by Kim Chi