EVN proposes allowing transitional wind and solar power projects to participate in the electricity market

In this document, the Electricity of Vietnam (EVN) proposes, in the immediate future, to allow wind power and solar power projects to participate in the electricity market in the immediate future.

Previously, this Group received a document from the Ministry of Industry and Trade asking for opinions on wind and solar power projects (transitional projects).

For the proposal to assign EVN to negotiate electricity prices, power purchase agreements with investors within the electricity generation price bracket and guidelines issued by the Ministry of Industry and Trade for transitional projects and projects to be implemented in the future. In the future, EVN assesses "not feasible in the conditions in Vietnam".

EVN explained, because the time will be long and the transition projects have invested in many different stages, have been implemented with the power price bracket that cannot be retroactively negotiated in the previous years in large quantities.

Because, determining the average annual power output of renewable power plants is more complicated than that of traditional power projects. While "it is not clear which agency confirms and is responsible for the accuracy of this data".

In addition, the negotiation according to the total investment declared by the investor and the above average power output will generate problems that are difficult to explain and beyond EVN's control...

For example, projects that are next to each other but have different prices? Projects put into commercial operation first are cheaper than projects put into commercial operation later?, asked EVN.

From international experience, EVN believes that most countries apply the FIT preferential price for a certain period and then switch to the bidding mechanism.

Facing this fact, EVN proposes that, in the immediate future, to allow transitional wind and solar power projects to participate in the electricity market, to be paid according to the spot market price of electricity and not to exceed the electricity generation price bracket of the same type. corresponding power source model approved by the Ministry of Industry and Trade (the bidding and announcement of capacity for each trading cycle must comply with the regulations on electricity market operation).

At the same time, EVN requested the Ministry of Industry and Trade not to assign EVN to negotiate electricity prices and power purchase and sale contracts for these projects. In the long term, EVN proposes to apply a two-step bidding mechanism.

The first is to select an investor in accordance with the new Investment Law with a decision on investment policy with a certain term.

After a specified time, if the investor fails to implement the project, the competent state agency has the right to take back the project and hand it over to another investor.

After that, the investors are selected to participate in the electricity market or participate in the bidding to sign the power purchase agreement (PPA) and develop the project, the bidding organization is the Ministry of Industry and Trade.

Regarding the proposal of the Ministry of Industry and Trade on reviewing and reviewing the Contract between EVN and the Investor in order to harmonize the interests between the seller - the buyer - the electricity consumer and the state for the projects already in operation. According to EVN, due to the current signed PPA form issued by the Ministry of Industry and Trade, the basis of the PPA is the Commercial Law, the Electricity Law and the Civil Law. Therefore, EVN proposes that the cancellation or adjustment of the content of the PPA must be based on the terms of the signed PPA and the above Laws.