The Ministry of Industry and Trade (MoIT) has mandated that Electricity of Vietnam (EVN) and investors in wind and solar power reach an agreement on energy rates by March 31.

EVN has received a document from the MoIT about an electricity price agreement with solar power and transitional wind power plants. The document states that, on January 7, Minister of Industry and Trade signed Decision No.21/QD-BCT establishing the price bracket for the generation of electricity by solar and transitional wind power plants.

On January 9, the MoIT issued Document No.107/BCT-DTDL, urging EVN and its investors in solar energy and transitional wind plants to urgently coordinate to negotiate and cooperate on electricity generation prices to ensure that they do not exceed the MoIT's electricity generation price bracket.

The MoIT also issued Document No.1094/BCT-DTDL on March 2, directing EVN on how to fulfil the agreement on electricity pricing outlined in the Electricity Law.

Based on the aforementioned guidelines, the MoIT requests that EVN and its investors agree on electricity prices by March 31.

Up to now, 84 renewable energy projects (with a combined capacity of around 4,676MW) are behind schedule for commercial operations. Of which, 34 transition projects (28 wind power projects and six solar power projects) with a combined capacity of about 2,091MW have been constructed and tested. According to prior rulings, these projects are not eligible for a 20-year fixed preferential power price (feed-in tariff).

In a previous document provided to Prime Minister Pham Minh Chinh, 36 wind and solar investors reported that only 34 projects had received the required investment, with a total of more than $3.6 billion. Of this, more than $2.46 billion was funded by banks.

The transitional power purchase price was also the primary topic of discussion at the March 20 meeting between the MoIT, EVN, and 84 investors in wind and solar power. The investors advised EVN to mobilise energy at a preliminary price of 6.2 US cents per kWh.

According to the MoIT's Decree No.21/2011/ND-CP that stipulates the price range for electricity generation from solar power plants and transitional wind power, the ceiling price for transitional solar power projects ranges from 5 to 6.4 US cents per kWh, while the ceiling price for transitional wind power projects ranges from 6.7 to 7.7 US cents per kWh.

Vietnam Investment Review