Encourage investment and use of clean electricity1

Applying the price of buying excess rooftop solar power to the grid at 671 VND/kWh will avoid wasting social resources, and at the same time encourage businesses to prioritize using electricity for production, instead of investing in solar power to sell electricity as before.

When the mechanism is cleared, businesses will increase their use of green electricity. In the photo: a business using solar power at the Ho Chi Minh City High-Tech Park - Photo: NGOC HIEN

Many experts have affirmed this when discussing with us the recent proposal of the Ministry of Industry and Trade regarding the mechanism to encourage self-produced and self-consumed rooftop solar power (SPP), in which the proposed price for purchasing surplus SPP that is fed into the national grid is 671 VND/kWh for 2024. However, according to experts, it is necessary to clearly define whether businesses are allowed to sell no more than 10% of the total installed capacity of the SPP system or only 10% of the surplus electricity fed into the grid.

Purchase price includes distribution costs

The price proposed by the Ministry of Industry and Trade is not a fixed price, but is adjusted annually and includes the distribution costs of the Vietnam Electricity Group (EVN). Explaining the need to calculate the distribution costs, the representative of the Ministry of Industry and Trade said that EVN has invested in a distribution grid to supply electricity to customers, so it must be recovered to compensate for a part of the distribution costs due to customers using solar power without buying electricity from EVN. With the direction of Deputy Prime Minister Tran Hong Ha on the pilot project to allow the sale of excess electricity to the national grid at no more than 10% of the total capacity, the Ministry of Industry and Trade has proposed 3 options to determine the amount of excess electricity sold to the national grid. In which, option 1 is to control the excess generation capacity to the national grid at no more than 10% of the installed capacity but must install additional generation control equipment. Option 2 is to be paid 10% of the electricity output on the total surplus electricity output to the national grid and option 3 is to be paid 10% of the output on the total electricity output that customers buy from the national grid. However, according to the Ministry of Industry and Trade, option 2 is encouraging, simple to implement, saves investment costs but still ensures that there is no negativity and waste of social resources. However, the leader of an energy enterprise in Ho Chi Minh City said that it is necessary to clearly distinguish whether the 10% electricity sold on the total capacity is the installed capacity or just 10% of the total electricity output generated to the grid. Because if 10MW of solar power is installed, the enterprise will be able to sell to the grid a maximum of 1MW, which will be very different from being paid a maximum of 0.1MWh with the actual output generated to the grid. Mr. Bui Van Thinh - Chairman of Binh Thuan Wind - Solar Power Association, said that paying the solar power seller at the rate of 10% of the output to the grid as proposed would be more reasonable than generating 10% of the total installed capacity. Because there will be times when the plant is not producing, the output of electricity to the grid is large. "If we want to control the output, we will need complex power control equipment as assessed by the Ministry of Industry and Trade, and it will be difficult to monitor the operation of the equipment," Mr. Thinh said.

Only 10 - 15% of electricity output is surplus

Regarding the electricity purchase and sale price, Mr. Bui Van Thinh said that compared to the proposal of not buying excess solar power, meaning selling excess electricity for 0 VND, the fact that the Ministry of Industry and Trade accepted public opinion and proposed a reasonable price to help businesses not waste excess electricity is a positive signal.

According to Mr. Thinh, with the new mechanism, all projects installing solar power must identify this as a self-production and self-consumption model, meaning that the electricity generated must mainly serve production activities and electrical equipment under the roof, not for the purpose of selling electricity as before. "The installation of solar power must identify 90% of the output for self-use, reducing electricity purchases from EVN, and the remaining 10% surplus or when production is reduced, on holidays, Tet ... can send the surplus output to the grid and receive an incentive payment, helping businesses have more costs, accounting for input and output invoices, not considering this as an investment to sell electricity for profit", Mr. Thinh said. Also according to Mr. Thinh, the demand for installing self-production and self-consumption solar power to serve production activities and green transformation is very large. Therefore, the authorities need to design policies in a unified direction, should not control the total installed capacity nationwide but need to let businesses install according to their needs. Mr. Pham Dang An - Deputy General Director of Vu Phong Energy Group - said that FDI enterprises and domestic manufacturing enterprises, industrial parks all install solar power with the need to use green power sources, achieve green certifications, reduce carbon emissions to compete for orders or implement the carbon emission reduction commitment roadmap that enterprises have committed, especially the FDI sector. Therefore, according to Mr. An, nearly 90% of the electricity generated is used for factories, only 10 - 15% of the surplus electricity output is sent to the national grid. Mobilizing 10% of the surplus electricity output to the grid is a reasonable policy. "Because if we really invest in self-produced and self-consumed solar power to serve production, the surplus electricity will be at most 15% and being able to buy electricity at a temporary price of 671 VND/kWh will also be an incentive for businesses, promoting the development of Vietnam's green transformation process", Mr. An said.

There needs to be a policy to encourage investment in storage batteries.

According to Mr. Nguyen Hoai Nam, director of an energy enterprise, there should be mechanisms to encourage large enterprises with large-capacity rooftop solar power systems to invest in storage batteries at a rate equivalent to 10%. "Investing in storage will help stabilize the power system, making it more convenient for EVN to dispatch. Therefore, in the future, it is also necessary to research and design policies in the direction that if there is a 10% storage battery, 10% of the surplus electricity output will be mobilized, 5% of the storage will be mobilized, and at peak times, electricity can still be mobilized from the storage system," said Mr. Nam. Source: https://tuoitre.vn/khuyen-khich-dau-tu-su-dung-dien-sach-20240716224817351.htm