Investors are “frustrated” because hundreds of MW of electricity are at risk of “failure”

Electricity of Vietnam (EVN) has just sent a document to the Prime Minister and the Ministry of Industry and Trade about stopping mobilizing capacity. Solar power (DMT) has not had a purchase price policy of Trung Nam Group and Ninh Thuan Energy Industry Joint Stock Company since January 1, 2022. These projects are all located in Ninh Thuan province with a total capacity of about 300MW and were COD before December 31, 2020.

Reason It is pointed out that this total capacity of 300MW is outside the 2,000MW incentive (with a purchase price of 9.35 cents/kWh) of Resolution 115/NQ-CP in 2018 on developing Ninh Thuan into a renewable energy center and also are not eligible for incentives under Decision 13/QD-TTg on pricing policy for solar projects with investment policy before November 23, 2019 (with purchase price of 7.09 cents/kWh).

A representative of Trung Nam Group said that Trung Nam’s 172MW solar power unit without a purchase price mechanism is in a conditional investment project. Accordingly, when the Government decided to give Ninh Thuan 2,000MW at a preferential price of 9.35 cents/kWh, a story appeared that there was not enough power grid to transmit this capacity to the grid. Therefore, the People’s Committee of Ninh Thuan province had a meeting and proposed to allow private investors to pay for the construction of transmission lines on the condition that the 450MW solar power plant project is added to the revised Power Plan VII.

After being approved, Ninh Thuan province organized the selection of investors in accordance with the order and procedures as prescribed. Trung Nam Group has been selected as the investor to implement the 450MW Solar Power Project in combination with the 500kV Thuan Nam Substation (substation) and 500kV, 220kV connection lines connecting to the national grid system.

Up to now, the project has been in commercial operation for over 1 year, playing an important role in releasing capacity through 500kV substation and 500kV Thuan Nam transmission line – Vinh Tan with a total capacity of 1,800MW.

The value of electricity transmission at current prices of the National Power Transmission Corporation is about 200 billion VND, but Trung Nam is not allowed to collect it because according to the Electricity Law, the private sector is not allowed to trade in the transmission grid.

Proposing to apply the existing pricing policy for projects

Mr. Nguyen Tam Tien – General Director of Trung Nam Group said that currently, the revenue of this solar complex is only received from 277.88MW which is in the preferential price according to Resolution 115. The remaining capacity of the project (about 172 MW) MW) is currently unknown Specific electricity selling price as a basis for payment.

This leads to great pressure for businesses to pay interest on loans to banks according to the payment method. approved financial project as well as arrange funding sources for operation and maintenance of Thuan Nam 500kV substation and connection lines.

Mr. Nguyen Van Vy, Vice Chairman of Vietnam Energy Association, said that Vietnam’s renewable energy pricing mechanism is not continuous, is broken and interrupted. The mechanisms and policies applied in the past time have not provided a long-term orientation, in order to create a stable and predictable investment environment, ensuring predictable revenue streams of projects. Therefore, there is a need for a smooth, clear and continuous legal corridor.

However, it is noteworthy that throughout 2021, although not yet has a clear pricing policy, but 300MW of solar PV in Ninh Thuan is still mobilized. According to investors, this also helps businesses reduce anxiety because the project’s electricity output is still used and will be paid after the price mechanism is in place. But recently EVN has decided to stop mobilizing the entire capacity since the beginning of 2022 because there is no pricing policy.

Facing this situation, the National Assembly Delegation of Ninh Thuan province has sent a written request to the Commissioner. The National Assembly Standing Committee proposed to the Government and the Prime Minister to consider not cutting capacity, prioritizing the maximum exploitation of Trung Nam’s 450MW Solar Power Plant capacity. At the same time, it is proposed to the Prime Minister to consider adding the electricity selling price mechanism of 7.09 cents/kWh for the part of solar power capacity outside the 2,000MW range in Ninh Thuan province but COD before December 31, 2020 and allow make payment for the mobilized capacity and record output from EVN.

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