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Vietnam Energy Forum

The new regulations on defining electricity generation prices, the order of checking power purchase agreement

 - The Ministry of Industry and Trade (MOIT) has just promulgated Circular No. 57/2020/TT-BCT (Circular 57) on the method for defining electricity generation prices and the order for checking power purchase agreement (PPA), and on amending and supplementing a number of clauses of the Circular No 57/2014/TT-BCT dated 19/12/2014 of MOIT minister on the method and order to formulating and promulgating the framework of electricity generation prices.


The Circular 57 concretely regulates the method on defining electricity generation prices and the order of checking PPA for the power plants with a capacity of over 30 MW, connected to the power system, for the power plants with a capacity of 30 MW down which voluntarily participate in the electricity market, and for the other relevant organizations and individuals…

Circular 57 also amends Clause 3 of Article 6 in Circular No. 57/2014/TT-BCT as follows: Investment rate is investment cost for 1 kW of average net capacity of the standard power plant calculated on the basis of the total investment level, effective at the time for calculating framework of the electricity generation price (updated exchange rate at the time of calculation).

The component costs in the investment rate include all construction costs such as the costs for dismounting and destroying old architectural projects, aggrading construction ground, constructing the temporary and auxiliary projects…

The equipment costs include costs for technological equipment procurement, project installing, testing, adjusting, transporting,  training workers for operating,  insurance, taxes and other relevant charges, and the costs for site clearance, compensation and resettlement under decisions of competent state agencies,   construction of foundation reinforcement.

In addition, it is necessary to include the project management costs as the costs for implementing project management from  its formulation to completion, acceptance, hand-over and putting into operation; costs for construction consultancy as the costs for project  survey, design, supervision, verification and other construction investment consultant costs.

The other costs include working capital during the project test operation, interest expenses and loan costs during the construction of the power plant and other necessary expenses; the backup costs include the backup expenses for the generated work volumes and for the slippage in prices during the project construction.

In addition, Circular 57 also amends Point a, Clause 4, Article 6 on loan interest rate calculated by weight average interest rate of domestic and foreign currency loans. Amending Article 8 ...

The circular 57 will replace the Circular No. 56/2014/TT-BCT, the circular No. 51/2015/TT-BCT dated December 29, 2015 of MOIT for amending and supplementing a number of articles of MOIT Minister’s Circular No 30/2014/TT-BCT dated 2/10/2014 on  regulating the operation of the competitive power generation market and Circular No. 56/2014/TT-BCT.

The circulation 57, at the same time, regulates to abrogate the clause 1 of the Circular No. 13/2017/TT-BCT dated 3/8/2017 of the Minister of MOIT for amending and supplementing a number of the clauses of the Circular No. 56/2014/TT-BCT, Circular No. 30/2014/TT-BCT for regulating the method , order or formatting and promulgating electricity generation price framework.

The circulation 57 also abrogates Clause 134 and Appendix 5 of the Circulation 45/2018/TT-BCT of the Minister of MOIT on regulating operation of the competitive electricity wholesale market and amending, supplementing a number of the Clauses of the Circular No 57/2014/TT-BCT.

In the course of implementation, if raising problems, the organizations and individuals must be responsible for reporting them to MOIT for the appropriate amending and supplementing.

This Circular takes effect from February 22, 2021.


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