A solar farm of 400GWh in An Giang province. (Photo: VNA) On October 3, 2022, the ministry released Circular 15, which setsout a framework for Vietnam Electricity (EVN) to enter into tariff negotiationswith developers of transitional solar and wind energy projects by reference tosome specific ceiling prices.
On January 7, 2023, the ministry set the ceiling prices at 1,184.90VND (5.05 cents) per kWh for ground-mounted solar projects, 1,508.27 VND (6.43cents) for floating solar projects, 1,587.12 VND (6.77 cents) for onshore windprojects, and 1,815.95 VND (7.75 cents) for offshore wind projects.
EVN will now use these ceiling prices to negotiate tariffs withtransitional projects, which are not subject to any tariff so far.
At a seminar earlier this week, Deputy Chairman of the VietnamEnergy Association Nguyen Van Vy remarked that renewable energy in Vietnam wasfacing various obstacles.
Under Circular 32 on power purchase agreement, avoidable cost isdefined as the highest cost of producing one kWh of electricity by nationalgenerating stations, and the cost would be avoided if EVN purchases theelectricity from alternative small hydropower plants.
He revealed that the current avoidable cost was set at 1,100 VND(4.68 cents) per kWh, so low that it disincentivises investments in newhydropower plants. He thus called for an adjustment to the cost, estimatingthat a rate of between 3,500-4,000 VND per kWh would be more practical.
Regarding biomass power plants, he said that the plants are fueledby bagasse residue of sugar refining during the sugarcane season and othertypes of biomass during the rest of the year.
Under his estimation, the plants need to make at least 7.03 centsfor each kWh generated by the bagasse and 8.47 cents for other types of biomassto break even. Unfortunately, their electricity is purchased at a price as highas the former, leading to the plants staying idle for eight months every year.
He called for a revision to Decision 08, which set the purchasingprice of biomass-derived electricity at over 8.47 cents per kWh during theperiod out of sugarcane season to encourage the use of other types of biomassin electricity generation.
He was also concerned that the policy mechanism to support solarand wind energy had expired and a new mechanism had not been introduced,leading to a situation that newly built solar and wind farms were put on holddue to the absence of an official feed-in tariff (FIT).
He suggested a temporary FIT, in the meantime, to keep the farmsoperational until an official FIT would come into force under a new mechanism,which would be applied retroactively to the farms.
"An official FIT was absent when Binh Thuan Wind Power PlantNo 1 began operation years ago. At that time, I suggested a temporary FIT of6.00 cents per kWh and the Prime Minister approved my suggestion," saidVy./.
VNA
