About to connect to the grid, 5 renewable energy plants contribute more than 300 MW

(HNMO) - Deputy Minister of Industry and Trade Dang Hoang An said that in the next few days, after completing grid connection and testing, 5 renewable energy projects will begin commercial power generation with a total capacity of 303 MW.

According to the Ministry of Industry and Trade, renewable energy projects have been receiving many preferential mechanisms. (Illustrative image.)

According to the directive of the Ministry of Industry and Trade, for projects where investment and construction have been completed and documentation is finalized, Vietnam Electricity Group (EVN) will consider agreeing on a temporary price. After negotiations are completed and a price is agreed upon, payment will be made according to the official price from the date of electricity generation and connection to the grid.

The Electricity Trading Company (a subsidiary of EVN) announced that by the end of May 26th, it had completed negotiations, signed memoranda, and initialed electricity purchase and sale contracts with all 40 investors who proposed a provisional price of 50% of the ceiling price. Today (May 27th), EVN will submit a document to the Ministry of Industry and Trade for consideration and approval.

To date, 19 projects (or parts of projects) have had their provisional prices approved and power purchase agreements signed by the Ministry of Industry and Trade. In addition, 16 projects have been connected to the grid and are undergoing testing; of these, 5 projects have completed testing and are in the process of preparing for commercial power generation. Nine projects have been inspected and approved by competent state management agencies; and 26 projects have been granted full or partial power operation licenses for the entire plant.

However, to date, 32 out of 85 projects, with a total capacity of 1,576.05 MW, have yet to submit their documents to the power trading company for electricity price negotiations and power purchase agreements.

According to Mr. Tran Viet Hoa, Director of the Electricity Regulatory Authority (Ministry of Industry and Trade), in recent times, investors have been "racing" to clear land and complete construction in order to meet the deadline for preferential feed-in tariff (FIT), leading to high investment costs. Therefore, some investors of transitional renewable energy power plants consider the renewable energy purchase price framework lower than expected, and have not submitted documents to negotiate electricity prices with EVN, leading to prolonged negotiation times and wasted resources.

In addition, many investors have violated legal regulations regarding planning, land, and construction investment, and therefore have not yet met the legal procedures and cannot negotiate prices with EVN. Some investors were requested to supplement their documents from the end of March 2023, but after two months they still have not completed them.

According to representatives from the Ministry of Industry and Trade, renewable energy projects have received numerous preferential mechanisms in recent times. Preferential pricing policies have been clearly announced regarding the roadmap, price levels, and duration of the incentives. During this period, many very large-scale projects in various localities, despite facing difficulties, have managed to meet deadlines and be put into operation to benefit from the Feed-in Tariff (FIT) mechanism.

Following the trend not only in Vietnam but also worldwide , the FIT (Feed-in Tariff) mechanism price is gradually decreasing. Therefore, not all projects will achieve effective profitability. Investors need to strive to optimize management, administration, and operations to increase profitability under the new price framework. Projects with strong development and operational capabilities, as well as access to cheaper capital, will have an advantage during this period.

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