Renewable energy businesses are panicking, fearing the revocation of high FIT (Feed-in Tariff) rates.

Many solar power producers are worried that the current electricity selling price of 9.35 US cents/kWh will be reduced to 7.09 US cents/kWh, or even not exceed 1,184.9 VND/kWh.

Many solar power producers are worried that the current electricity selling price of 9.35 US cents/kWh will be reduced to 7.09 US cents/kWh, or even not exceed 1,184.9 VND/kWh.

From 2,231 VND/kWh, the price plummeted to less than 1,184.9 VND/kWh.

Many solar power businesses whose project acceptance and inspection reports were issued after the deadline for enjoying the electricity purchase price under Decision 11/2017/QD-TTg (FIT1) and Decision 13/2020/QD-TTg (FIT2) are now in a state of panic.

The reason is that these power plants may no longer be entitled to the electricity selling prices they have been enjoying since entering commercial operation (COD), which are 9.35 US cents/kWh (FIT1) or 7.09 US cents/kWh (FIT2), in accordance with Solution No. 4 presented by the Minister of Industry and Trade at the recent online conference announcing and implementing the Government's Resolution on the policy and direction for resolving obstacles and difficulties for renewable energy projects.

Therefore, if they are no longer eligible for the solar power purchase price announced by Vietnam Electricity Group (EVN) of 2,231 VND/kWh (equivalent to 9.35 US cents/kWh) or 1,692 VND/kWh (equivalent to 7.09 US cents/kWh) for 2024, and instead receive a price not exceeding the ceiling of 1,184.9 VND as stipulated in Decision 21/QD-BCT issued in early 2023 for transitional projects, the difficulties faced by investors are clearly evident.

According to Solution 4 proposed by the Minister of Industry and Trade, projects currently enjoying FIT rates that are found to be in violation by competent authorities due to not fully meeting the conditions for enjoying FIT rates will no longer be eligible for preferential FIT rates. Instead, the electricity purchase and sale price must be recalculated according to regulations; any improperly received preferential FIT rates will be recovered through offsetting payments for electricity purchases.

According to a report released by the Ministry of Industry and Trade at the conference, 173 grid-connected solar and wind power plants/parts of plants are facing the situation outlined in solution number 4.

The issue of enjoying FIT1 or FIT2 rates while awaiting project acceptance and without written approval from competent state authorities regarding the investor's construction project acceptance results has been frequently discussed by Investment Newspaper in the past.

According to our research, the number of currently operating concentrated solar power projects on the system is approximately 150. However, only 15 projects have been completed and accepted before the end of FIT1. The remaining projects are either currently receiving FIT1 and undergoing acceptance during FIT2, receiving FIT1 and undergoing acceptance after the end of FIT2, receiving FIT2 and undergoing acceptance during the end of FIT2, or receiving FIT2 and undergoing acceptance after the end of FIT2.

Regarding wind power generation, drawing on lessons learned from solar power projects, 58 projects were accepted before Commercial Operation Date (COD); 11 projects were accepted after COD but before October 31, 2021; and 19 projects were accepted after October 31, 2021.

Therefore, wind power projects commissioned after October 31, 2021, that are currently enjoying a price of 2,028.6 VND/kWh (equivalent to 8.5 US cents/kWh), will have to revert to a price not exceeding 1,587.12 or 1,815.95 VND/kWh, depending on whether they are onshore or offshore, according to Decision 21/QD-BCT for transitional projects when applying Solution 4 of the Minister of Industry and Trade.

"As a last resort, the only option is to file a lawsuit."

Mr. Bui Van Thinh, Chairman of the Binh Thuan Wind and Solar Power Association, said that the investment environment in renewable energy has faced many problems recently. Besides policy gaps, the proposed review of FIT prices in Sections 4, 5, and 6 is discouraging investors.

"The legal violations, as concluded by the security investigation agency, need to be dealt with strictly. However, determining whether the remaining projects have violations, to what extent, and who has the authority to conclude that 'the project's FIT price should be revoked' are all questions that are not easy to answer," Mr. Thinh said.

According to Mr. Thinh's analysis, investors, especially foreign ones, rely on the Power Purchase Agreement (PPA) signed with EVN, and the Commercial Operation Date (COD) recognized by EVN is considered the completion of the project. However, in all current regulations, no provision has been found stating that acceptance certification from a state management agency is one of the conditions for recognizing COD.

"If we don't make things clear and transparent, I believe that when faced with the application of transitional pricing, many investors will be forced into a corner and sue EVN. It's unclear who will win or lose, but the investment environment will certainly worsen, and the consequence will be that ensuring sufficient electricity for economic development will face even greater challenges," Mr. Thinh commented.

Source: https://baodautu.vn/doanh-nghiep-nang-luong-tai-tao-hot-hoang-lo-bi-thu-hoi-gia-fit-cao-d233800.html