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Renewable Energy Market Post New Price Scheme.
20/03/2023 - 12:13:11 CHPETITION
Thirty six (36) investors in renewable energy (RE) field have recently submitted an official petition to Prime Ministry regarding the inadequacies and difficulties of the new price basket for transitioning RE in accordance with the Decision 21/QD-BCT issued in Jan 2023. Accordingly, they stated that due to heavily impact by the pandemic – COVID-19, eighty four (84) RE projects with total capacity of 4,872 MW including 4,185 MW wind power and 492 MW solar, were behind schedule and therefore unable to connect to national grid system before FIT expired.
Notably, there are thirty four (34) projects – 2,091 MW (28 wind power: 1,638 MW & 6 solar: 452 MW), with 85,000 bn VND capital investment, in which 58,000 bn VND from bank loan, which have passed the construction and experiment phase and are ready for operation, but have been postponed while waiting for the Government to finalize the policies and procedures, which are used to pave the way for EVN to negotiate the selling price for RE post FIT era.
Nonetheless, it has been two (2) months since Decision 21 was issued, and despite the documentary 94/BCT-DTDL issued at the beginning of Mar to boost EVN to settle an official price level with transitioning RE’s investors, it was unsuccessful. The reason for this is that the investors in these RE project were dissatisfied and opposed the new price scheme, which was c.23 % lower than FIT in average; hence if applied even with ceiling price, it could lead to a substantial deficit and bankruptcy. Therefore, the 12% ROE in Circulars 15/2022-BCT issued by Oct 2022 would not be applicable.
In addition, investors also believed that the new Circular 01/2023/TT-BCT has abolished a number of important regulations in Circular 02/2019/TT-BCT and 18/2020/TT-BCT, which were designed to appeal investments in RE sector consisting of three (3) major points:
a) Twenty-year (20) power purchase agreement (PPA) commitment.
b) The clause to convert the electricity purchase price into US dollar.
c) The obligation to purchase the entire output from the grid-connected generator at the delivery point.
