On the afternoon of March 29, the Ministry of Industry and Trade held a meeting to find solutions to remove difficulties and obstacles in the process of investing and implementing power projects.
The meeting was chaired by Minister of Industry and Trade Nguyen Hong Dien. Also attending were leaders of the Electricity and Renewable Energy Authority, the Electricity Regulatory Authority, the Oil, Gas and Coal Department, the Legal Department and Vietnam Electricity Group.
In his directive speech, Minister Nguyen Hong Dien said that for many years now, the mechanism for developing gas-fired power projects (including natural gas and liquefied gas) has still faced many difficulties and problems.
Reporting on the implementation of gas-fired power projects, Mr. To Xuan Bao - Director of the Department of Electricity and Renewable Energy (Ministry of Industry and Trade), said that according to the Electricity Plan VIII, there will be 23 gas-fired power plant projects invested in and put into operation by 2030, of which 10 projects will use domestic gas and 13 will use LNG.
Up to now, 1 plant has been put into operation, which is O Mon I Thermal Power Plant (660 MW). 2 projects under construction are Nhon Trach 3 and Nhon Trach 4 Power Plants (total capacity of 1,624 MW) and Hiep Phuoc LNG Power Plant Phase 1 (capacity of 1,200 MW). Domestic gas power plant projects all have investors and are in the investment preparation stage. Of which, O Mon II Project with capacity of 1,050 MW has approved the project investment decision; For O Mon IV Project, Vietnam Oil and Gas Group (PVN) is submitting to the State Capital Management Committee at Enterprises for approval of the adjusted investment decision.
Among the LNG power plants, there are currently 3 projects that have not yet selected investors: Nghi Son, Ca Na, Quynh Lap (Nghi Son project has received an investment approval decision). The remaining power plants have had investors and are in the investment preparation stage. Some projects have submitted feasibility study (FS) reports to the Ministry of Industry and Trade for appraisal and approval, and the Department of Electricity and Renewable Energy has sent documents to investors requesting the completion of FS documents such as Son My I, II, Quang Ninh, Hai Lang phase 1. The Bac Lieu LNG and Long An LNG projects (I and II) have been appraised by the Department of Electricity and Renewable Energy and a document notifying the appraisal results has been sent to investors.
Projects currently negotiating PPA contracts with EVN include: Nhon Trach 3 and 4, Hiep Phuoc phase 1, O Mon II, Bac Lieu. According to reports from investors, these projects are all facing difficulties in the negotiation process and have not been able to sign PPA contracts as a basis for investors to arrange capital for the projects.
Assessing the progress of the projects, Mr. To Xuan Bao commented that, based on the practical preparation of investment in thermal power projects in general and gas-fired power projects in particular, the construction progress of combined cycle gas turbine units, from the time of assignment to the investor until commercial operation, needs at least 7.5 years.
Gas-fired power projects that can be put into commercial operation before 2030 include: Power projects in O Mon Power Center; Nhon Trach 3 and Nhon Trach 4; Hiep Phuoc. The total capacity of projects put into operation before 2030 is 6,634 MW. Meanwhile, the remaining projects can only be put into operation by 2030 if PPA negotiations are completed and loan capital is arranged before 2027. Gas-fired power projects in the gas-fired power chain (Block B, Blue Whale) also depend on the progress of upstream projects to ensure the overall efficiency of the entire project chain.
According to the leader of the Electricity and Renewable Energy Authority, based on reports from investors and localities with projects, the implementation of gas-fired power projects is facing a number of difficulties and problems related to PPA contracts, government guarantees and LNG purchasing mechanisms. Specifically, most domestic investors require in the PPA contract a commitment to a stable long-term contract output (Qc) or gas consumption; horizontal transfer of gas purchase output commitment from gas purchase contracts to electricity purchase contracts; horizontal transfer of gas prices to electricity prices, force majeure conditions, etc.
In particular, some provisions of the Bidding Law are not consistent with the characteristics and international LNG business practices. Therefore, it is necessary to have regulations on LNG purchase for LNG power plant projects in accordance with international practices.
EVN also proposed that the Ministry of Industry and Trade amend the regulations in Circular 25/2016/TT-BCT and Circular 45/2018/TT-BCT, and report to competent authorities for consideration and resolution.
For more information, a representative of the Electricity Regulatory Authority (Ministry of Industry and Trade) said that the Authority is studying and reporting to the Ministry of Industry and Trade to amend the regulations in the two circulars to remove obstacles, helping investors and EVN to sign PPA contracts as a basis for arranging capital and implementing LNG power projects. However, the amendment of these circulars must be based on a full assessment of impacts such as electricity prices, electricity markets and other relevant legal regulations. In case of any problems beyond the authority, the Ministry of Industry and Trade will report to the Prime Minister and competent authorities for direction and resolution.
Concluding the meeting, Minister Nguyen Hong Dien stated that developing electricity according to the Power Plan VIII is an inevitable direction and plays a very important role in ensuring electricity supply for the economy and promoting energy transition in Vietnam. Therefore, it is necessary to find the root cause to remove and resolve difficulties and obstacles in electricity development.
In response to the proposal of foreign investors on long-term contract output commitments, Minister Nguyen Hong Dien suggested that EVN should study this proposal and, at the same time, have a specific report to the Government, clearly stating difficulties and obstacles, proposing solutions and submitting to the Government for consideration of mechanisms and policies to remove obstacles in implementing gas-fired power projects in the VIII Power Plan./.
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