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Vietnam Energy Forum

The draft method for developing the wind and solar power price framework (for the new investment projects) in Vietnam

 - The Ministry of Industry and Trade (MOIT) has just completed the draft Circular stipulating the method of developing the power price framework to obtain the comments. (Currently, the draft Circular is being publicly posted on the Government Portal and some official websites).

The Draft Circular stipulates the order and procedures for developing and promulgating the annual power generation price framework for solar power projects (on ground and floating), and wind power projects (inland, sea and offshore) The Subjects for applying this Circular will be Electricity of Vietnam (EVN) and organizations and individuals participating in the construction investment of wind and solar power plants, solid waste, biomass (exception for the transitional solar and wind power projects to stipulate the at Point b, Clause 2, Article 1 of Circular No. 15/2022/TT-BCT). In principle, developing prices for wind and solar power plants are delivered from the minimum (0 VND/kWh) to the maximum value that is established and issued annually. The power generation price of a standard wind and solar power plant would be calculated by the average fixed price plus the fixed operation and maintenance cost.

Regarding the method, the formula for calculating the power generation price framework will be based on relevant parameters (investment, fixed operation, maintenance costs and electricity delivery interest rate...).

The method of developing the power generation price framework (similar to the method of power price framework, applied for the transitional projects specified in Circular No. 15/2022/TT-BCT), only a difference in selecting the input parameters for calculating the price framework. As follows:

Firstly: The parameters of installed capacity, project economic life, repayment period, equity/loan ratio, profit rate, and normal distribution coefficient corresponding to expected electricity for the wind power projects are regulated similarly to those in Circular No. 15/2022/TT-BCT.

Secondly: The parameters of investment rate, ratios of foreign currency loans, operation and maintenance costs (O&M) and calculated parameters of the many years average electricity output of the standard wind and solar power plants selected on the basis of reference to data of consulting organizations to ensure universality and update of data in the world, instead of using past data of power plants.

Thirdly: Interest rates on domestic currency loans and foreign currency loans are determined according to the statistics of credit institutions.

As for the order of developing and promulgating the generation electricity price framework: Before every year November 1, EVN is responsible for calculating, or hiring a consultant to select a set of standard parameters of wind and solar power plants and calculate them, according to regulations.

The proposal to select parameters for standard wind and solar power plants to calculate the electricity generation price framework and make a document to calculate the electricity generation price framework for the solar power plants (no ground and floating solar projects) and wind power plants (on inland, at sea, offshore) according to the provisions of Article 11 of this Circular and submit them to MOIT for approval.

Within 5 working days (from the date of receiving the document for calculating the electricity generation price framework mentioned in Point b, Clause 2 of this Article), the Electricity Regulatory Authority will be responsible for checking in detail, the completeness and regularity of the document. In case of necessity, the Electricity Regulatory Authority of Vietnam sends a written request to EVN to amend, supplement, or clarify the contents of the document. But within 15 working days (from the date of receiving the requirement to amend, supplement, or clarify the contents in the document of the Electricity Regulatory Authority of Vietnam), EVN is responsible for sending a written report on the solution to the problem.

In case of receiving a valid document and a report explaining and clarifying the contents of the EVN document, within 20 working days (from the date of receiving the document), ERAV will be responsible for organizing the Appraisal of the generation electricity price framework submitted by EVN.

In case of necessity, ERAV will organize consultations on the generation electricity price framework through the Advisory Council established by MOIT.

Within 15 working days (from the date of organizing the appraisal of the generation electricity price framework), ERAV will be responsible for submitting to MOIT for approval the generation electricity price framework for the solar and wind power plants for the next year and publishing on the website of ERAV.

In case the generation electricity price framework of the following year has not been announced, it is allowed to temporarily apply the most recent effective generation electricity price framework.

VietnamEnergy.vn

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