To avoid losses, solar-power investors submit petition to ministry

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In early March 2022, the media reported that the central province of Nghe An had approved investment policies for two solar power projects.

The first is the Solar Power Plant in Khe Go Lake area (Quynh Luu District), with a capacity of 250 MWp and first-year output of 339.129 million KWh, and total investment of VND4,100 billion.

The second is the Vuc Mau Lake Solar Power Plant (Quynh Luu District and Hoang Mai Town), with a capacity of 200 MWp, first year’s electricity output of 265, 8 million KWh, and total investment capital of VND3,700 billion.

In addition to the two projects, about 10 businesses that want to develop solar power in the provinces of Binh Phuoc, Ba Ria – Vung Tau, Dak Lak, Long An, and Gia Lai have jointly submitted a petition to the Government and the Ministry of Industry and Trade on the early promulgation of a mechanism for solar power development and allowing projects listed in the power development plan to be implemented in the period 2021-2025.

These are enterprises whose projects are among the 26 solar power projects approved by the Prime Minister to be added to the revised Power Master Plan VII at the request of the Ministry of Industry and Trade. They are to be implemented under a bidding mechanism in a document dated November 20, 2020.

Notably, the granting of investment policies for two projects in Nghe An, or the fact that the dozen above businesses are still passionate about solar power, took place at the time when the Ministry of Industry and Trade asked the Prime Minister to direct local governments to temporarily suspend the granting of investment policies to wind and solar power projects approved in the National Power Development Plan, but not implemented by January 26, 2022.

The Notice of Conclusion by Deputy Prime Minister Le Van Thanh at the meeting on the finalization of the National Power Development Plan for the period 2021-2045 (Power Master Plan VIII) on February 21, 2022, noted that the Ministry of Industry and Trade needs to clarify issues and consult with the Government according to regulations, including the proposal to withdraw from planning for the 2021-2030 period the solar power projects that are already included in the revised Power Plan VII but not yet implemented, totaling about 6,500 MW in capacity.

Concerned about the risk of disappearing from the Power Plan VIII, these businesses said: “The investors have invested a lot of money in personnel, survey, design, research reports, seeking general contractor, consultants, and many other expenses. Therefore, if these projects are no longer in the power development plan, the investors will lose all these costs.”

Not easy to sell electricity

According to statistics of the Ministry of Industry and Trade, by the end of December 31, 2020, there were 148 projects recognized for commercial operation (COD) with a total capacity of 8,652.9 MW. This figure is far below the total planned solar power capacity of 15,400 MW.

In the petition of solar power investors, it is said that, after being approved to be added to the revised Power Master Plan VII, the investors have implemented projects with necessary procedures and resources such as purchasing land and getting certificates of land use rights…

According to businesses, during the process of carrying out procedures for approving investment policies, many competent agencies have sent documents to consult the Ministry of Industry and Trade, but have not received a response.

However, with the reality being that there is an excess of solar power and there is no mechanism for storage batteries and new electricity prices, it is not an easy time for solar power investors.

The Ministry of Industry and Trade is developing a circular stipulating the method and plan for determining the electricity generation price and the power purchase and sale contracts for solar and wind power projects.

According to the first draft, renewable energy investors will have to negotiate electricity prices with Electricity of Vietnam (EVN) in the same order as other power source projects. That means it will take a lot of time to determine a specific price, and not all projects have the same price.

In the third draft, a plan was proposed that EVN should be responsible for organizing electricity purchase auctions, announcing the list, and signing power purchase and sale contracts with power plants that are subject to the circular.

Dau Tu

The Government Inspectorate has decided to inspect the observance of policies and laws in the implementation of planning and investment in the construction of power projects under the Power Master Plan VII and the revised Power Master Plan VII.

Deputy Minister of Industry and Trade Dang Hoang An has asked localities to compile the lists of wind and solar power plants in their areas.

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