Renewable power projects lack acceptance certificates, Ministry of Industry and Trade worries about risk of disputes

Renewable power projects lack acceptance certificates, Ministry of Industry and Trade worries about the risk of disputes - Photo 1.

Wind and solar power projects lacking acceptance certificates are being handled - Photo: Q.D.

The Ministry of Industry and Trade has just sent a report to Permanent Deputy Prime Minister Nguyen Hoa Binh on resolving difficulties in enjoying FIT prices according to Resolution 233 of the Government on removing difficulties and obstacles for renewable energy projects.

Risk of disputes and lawsuits

The Ministry believes that the handling of issues related to FIT prices is under the authority of Vietnam Electricity Group (EVN). Therefore, EVN has had working sessions with project investors to come up with a solution.

The Ministry said that the opinions raised by investors focused on issues related to the time of COD (commercial operation); current regulations do not require a written approval of the acceptance results from a competent state agency as a condition for COD recognition.

Some investors said that they had accepted to pay administrative fines, or sent written reports to the authorities for objective reasons such as the COVID-19 epidemic, so COD could not be accepted in advance; the financial impacts of temporary payment, the project facing a violation of debt repayment obligations...

According to the Ministry of Industry and Trade, the proposed solution by EVN did not reach consensus among investors, so there may be disputes, complaints, and impacts on the investment environment.

The solution proposed by EVN also does not ensure compliance with the directive requirements of Resolution 233, which is to optimally handle, compare socio-economic benefits, and limit disputes and complaints.

Previously, Vietnam Electricity Group had many reports related to the situation of handling and resolving projects.

In the latest update on April 12, EVN provided information on the number of factories currently having problems with FIT prices.

There are 172 wind power and solar power plants/parts of plants that have not had their acceptance results approved by competent state agencies at the time of recognition of commercial operation date (COD).

How are renewable power plants being paid?

The Electricity Trading Company (EPTC) has worked directly with the investors of 159 factories/parts of factories that have documents approving the acceptance results after the COD date. There are 14 investors who have not yet approved the acceptance results and did not attend the meeting, EVN is temporarily suspending payment.

Of the 159 factories/parts of factories mentioned above, 39 investors have expressed their opinions on having submitted written reports, requesting the state management agency to inspect and approve the acceptance results before the COD date. There are 65 projects with foreign investors; 27 projects with 100% foreign capital.

In addition, 25 solar power projects (total capacity 1,278 MWp) are paying according to FIT1 price, and will temporarily pay according to FIT2 price; 93 solar power projects (total capacity 7,357 MWp) are paying according to FIT price, and will temporarily pay according to transitional ceiling price.

There are 14 wind power projects (total capacity of 649 MW) that are paying according to FIT price and will temporarily pay according to the transitional ceiling price. The remaining investors have a document accepting the acceptance results within the FIT price period and are paying according to FIT price, stipulated in the power purchase agreement.

For power plants that do not have a document approving the acceptance results, EVN will make temporary payments for operation and maintenance (O&M) costs according to the opinion of the Ministry of Industry and Trade.

Based on the project situation, the Ministry of Industry and Trade proposed that the Permanent Deputy Prime Minister continue to direct EVN to actively resolve difficulties and problems within its authority.

The Group will soon complete and report the results of the content of enjoying FIT prices for large-scale renewable energy and rooftop solar power projects built on agricultural and forestry land under the model of investing in aquaculture farms.

For projects related to inspection of acceptance work during the COVID-19 pandemic, EVN is required to review records and documents, have legal evidence, comply with regulations, report to the Ministry of Industry and Trade with proposed plans, and handle them in accordance with legal regulations.

For wind power and solar power projects, EVN needs to report clearly, specifically and take full responsibility for choosing the optimal handling method based on analysis and assessment of impacts and comparative advantages in socio-economics, minimizing disputes, complaints, and impacts on the investment environment, ensuring security and order, national energy security, and harmonizing the interests of the state and investors.