Deputy Prime Minister requests to remove difficulties for renewable energy transition projects

Deputy Prime Minister Tran Hong Ha requested the Ministry of Industry and Trade to study a pricing plan similar to the BT transport project for transitional solar and wind power projects.

This content is stated in the announcement of the conclusion of Deputy Prime Minister Tran Hong Ha on the meeting with ministries and branches to remove difficulties for solar and wind power projects, issued by the Government Office on May 17.

The Deputy Prime Minister requested the Ministry of Industry and Trade to soon amend regulations and provide specific guidance on methods for calculating and negotiating prices for transitional wind and solar power. "The pricing method can be studied further, for example, similar to the BT transport project, that is, independently audit and agree on the acceptable profit level of the project, to ensure investment motivation for businesses," the announcement stated.

Currently, 84 renewable energy projects (with a capacity of more than 4,600 MW) are behind schedule in commercial operation compared to the plan. Of these, 34 transitional projects (28 wind power projects, 6 solar power projects) with a total capacity of nearly 2,100 MW have completed construction and testing.

These projects will not enjoy preferential prices (FIT prices) for 20 years and must negotiate electricity prices with Vietnam Electricity Group (EVN) according to the electricity generation price framework issued by the Ministry of Industry and Trade earlier this year, with prices 20-30% lower than before.

However, investors and EVN have recently encountered difficulties in negotiations because there have been no detailed instructions on price calculation methods from the Ministry of Industry and Trade.

A wind power project in transition in Soc Trang province. Photo: Anh Minh — A wind power project in transition in Soc Trang province. Photo: *Anh Minh*

According to EVN, by mid-May, 31 projects in the transitional phase had submitted documents for electricity price negotiations, but only half of them had sufficient legal documents and were negotiating prices. The rest needed to clarify issues such as total investment, financial documents, connection agreements, and planning.

In addition, only 13 out of 84 transitional projects currently have electricity operation licenses (a condition for generating electricity). Therefore, Deputy Prime Minister Tran Hong Ha requested the Ministry of Industry and Trade to "urge" agencies to speed up the issuance of these licenses.

EVN also added that among the investors who submitted their applications, 16 investors proposed to apply temporary prices during the negotiation period. Of these, 10 factories accepted temporary prices equal to 50% of the ceiling price frame of the Ministry of Industry and Trade and not retroactively.

Two plants proposed provisional prices of 50% of the price ceiling, but would collect additional fees when the official electricity price was announced. Four other plants proposed provisional prices of 90% of the price ceiling, but two of them wanted to collect additional fees after price negotiations were completed.

Faced with this reality, Deputy Prime Minister Tran Hong Ha requested that, for projects that have completed investment and construction and legal documents, the Ministry of Industry and Trade guide EVN to negotiate temporary prices with investors for projects to generate electricity to the grid. After negotiations, the projects will be settled according to official prices.

There are currently 6 factories, with a total capacity of nearly 358 MW, agreeing on temporary electricity prices with EVN.

Mr. Minh

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