Temporary price fixing for 40 renewable energy projects

On May 27th, the Electricity Trading Company (under the Vietnam Electricity Group - EVN) completed negotiations and signed memoranda of understanding for electricity purchase and sale contracts with all 40 renewable energy project investors, proposing a provisional price of 50% of the ceiling price.

Speaking to VTC News on the morning of May 28th, Mr. Tran Viet Hoa, Director of the Electricity Regulatory Authority ( Ministry of Industry and Trade ), said that among the 40 renewable energy projects (wind and solar power) for which temporary prices have been set, 19 projects or parts of projects have had their temporary prices approved by the Ministry of Industry and Trade and signed PPAs, 16 projects have been connected to the grid and are undergoing testing, and 5 projects with a total capacity of 303 MW have completed testing and are generating commercial electricity.

Temporary price fixing for 40 renewable energy projects - 1 — Currently, 16 renewable energy projects have been connected to the grid, are undergoing testing, and 5 projects have been put into commercial operation. (Photo: Thanh Nien Newspaper).

"Of the 85 transitional renewable energy projects without established prices, 53 have submitted negotiation applications. However, 40 projects have agreed to a provisional price at 50% of the ceiling price range, 13 projects are awaiting official price negotiations based on the ceiling price range, and 32 projects have not yet submitted applications. According to Decision No. 21, the ceiling price range for transitional solar power is 1,185-1,508 VND/kWh, and for wind power is 1,587-1,816 VND/kWh. We have repeatedly urged investors to promptly submit applications and complete legal procedures to negotiate with EVN," Mr. Hoa stated.

Nearly five months have passed since the price ceiling for the transitional project was set (January 10, 2023), however, price negotiations remain slow. According to Mr. Tran Viet Hoa, the reason is that many investors have violated legal regulations regarding planning, land, and construction investment… Therefore, this project has not yet met the legal procedures and cannot negotiate prices with EVN.

To date, 32 out of 85 projects, with a total capacity of 1,576.05 MW, have yet to submit their documents to the Electricity Trading Company for electricity price negotiations and power purchase agreements. Some investors were requested to supplement their documents from the end of March 2023, but after two months, they still haven't been able to do so.

“The completion of legal documentation has not received adequate attention from investors. This leads to delays in preparing and submitting documents to the competent authorities. Many projects may have completed legal procedures but have not yet installed all the necessary equipment to be ready for connection to the national power grid. Therefore, any investors lacking any conditions should promptly complete them in order to connect to the national power grid and begin commercial operation,” Mr. Hoa said.

According to Mr. Hoa, the total capacity of over 53 projects that have submitted applications is approximately over 3,000 MW. However, the available capacity does not reach the designed capacity because wind power is currently underutilized, while solar power is performing better.

"In reality, even though renewable energy sources are being commercially exploited, their capacity is still insufficient compared to actual demand. Therefore, the most important thing at this time is to conserve energy to mitigate the risk of electricity shortages, while also reducing investment costs and pressure in the energy sector," Mr. Hoa said.

Earlier, providing information to the press on some issues related to the electricity supply situation and the connection and pricing of renewable energy projects, Deputy Minister of Industry and Trade Dang Hoang An said that he had signed an urgent document sent to EVN requesting the corporation to urgently negotiate with solar and wind power plants to agree on temporary prices and to allow them to operate and generate electricity for the grid once the investment and construction work and legal documents have been completed according to regulations.

After negotiations are completed and an agreement is reached, the price will be settled according to the official price regulations from the date the electricity is connected to the grid.

The Ministry of Industry and Trade requested EVN to direct its member units to coordinate with investors to complete legal procedures related to EVN, such as grid connection agreements (if expired), before May 27th; complete the testing (as stipulated in Decision No. 25 dated May 16, 2019, of the Electricity Regulatory Authority) before May 27th for power plants registered for testing; and review the test results of power plants, ensuring compliance with relevant technical requirements and regulations.

In addition, the Ministry of Industry and Trade requests the People's Committees of provinces and cities to direct their respective departments of industry and trade, according to their authority, to coordinate with investors in areas with transitional solar and wind power plants to urgently carry out the appraisal of designs, design adjustments (if any), and inspection of acceptance testing within their jurisdiction.

The Ministry of Industry and Trade also directed the Electricity and Renewable Energy Department to guide investors facing planning issues during the investor adjustment process; and the Electricity Regulatory Authority to urgently issue electricity operation licenses for completed investment projects in order to bring these projects into operation as soon as possible, ensuring electricity supply and resource exploitation, and avoiding investment waste.

PHAM DUY

Useful
Emotion
Creative
Unique

Source