Waiting for specific instructions to solve difficulties in renewable energy projects

After the Government meeting to remove difficulties for renewable energy projects, what investors and stakeholders are waiting for are specific guidance documents.

After the Government meeting to remove difficulties for renewable energy projects, what investors and stakeholders are waiting for are specific guidance documents.

There are 106 wind power projects that the Ministry of Industry and Trade advised to submit to the Prime Minister for approval, which are said to lack planning basis.

Waiting for specific text

At the above meeting, the Prime Minister emphasized the Government's message of resolutely handling and resolving difficulties and obstacles for renewable energy projects; strictly prohibiting lobbying, negativity and corruption. The goal is to strive to complete before January 31, 2025 to maximize the effectiveness of investment projects, contributing to promoting socio-economic development.

According to the report of the Ministry of Industry and Trade at the meeting, the implementation of renewable energy projects has resulted in a number of violations as stated by the Government Inspectorate in Conclusion No. 1027/KL-TTCP dated December 2023. The listed violations are related to hundreds of projects.

Specifically, 14 solar power projects in Ninh Thuan province enjoy the incentive price mechanism for the wrong subjects in Resolution No. 115/NQ-CP and Notice No. 402/TB-VPCP dated November 22, 2019. 20 projects overlap with mineral planning; 5 projects overlap with irrigation and irrigation planning and 1 project overlaps with national defense land planning. 40 projects have problems with land procedures and records.

Affirming that the Government Inspectorate's conclusion on renewable energy is not wrong, Mr. Bui Van Thinh, Chairman of the Binh Thuan Wind and Solar Power Association, said that there was an equivalence between the mistakes of state management and enterprises; between the fault and crime of enterprises.

“If there is any overlap in planning such as minerals or irrigation areas, that is the responsibility of the locality. Only when the locality approves can businesses come in and do it. If we have not exploited minerals, they will still be there. Now let’s prioritize renewable energy to move towards green and have more supply for energy security,” Mr. Thinh shared.

Studying the meeting content and 6 groups of solutions proposed to handle the problems, renewable energy experts said that the Government allows additional planning for implementation in cases where the project does not violate regulations related to national security and defense, planning of key national projects and works. Thus, there will need to be a document from the state management agency clearly stating the projects that do not violate planning regulations.

Experts also said that Conclusion 1027/KL-TTCP mentioned that 168 solar power projects approved for investment had no legal basis for planning. There were also 106 wind power projects that the Ministry of Industry and Trade advised the Prime Minister to approve and directly approved 17 projects that were mentioned as lacking a basis for planning.

Therefore, there is also a need for written recognition that these projects are legally qualified.

Impatient investors

After being recognized and included in the planning, the next step is to have practical instructions on handling projects that are enjoying FIT prices while not fully meeting the conditions for enjoying FIT prices to re-determine electricity purchase and sale prices according to regulations.

Currently, investors are concerned about the conclusion of violations related to 173 solar and wind power plants/parts of grid-connected solar and wind power plants that encountered the situation of recognizing the commercial operation date (COD) and enjoying FIT price without the competent state agency having a written approval of the results of the investor's construction acceptance.

According to statistics, the scale of the projects with preliminary investment is up to 308,409 billion VND, equivalent to about 13 billion USD, accounting for nearly 13% of the capacity and about 6.06% of the electricity output of the entire power system. Therefore, the delay in putting the projects into operation not only causes waste, but can also cause the risk of collapse, insolvency, inability to repay bank loans, leading to bankruptcy, affecting the investment and business environment.

Along with that, there are 413 rooftop solar power projects/systems with a total capacity of about 507 MWp invested on agricultural and forestry land under the model of investing in farming and aquaculture but the land is not suitable for farming.

The proposed solution is to recover the preferential FIT prices that have been incorrectly enjoyed and the specific method mentioned is "through offsetting payment for electricity purchases". Enterprises believe that it will be very burdensome for power projects that are enjoying FIT1 price of 9.35 US cents/kWh to have to reduce to FIT2 price of 7.09 US cents/kWh or directly to 1,184.90 VND/kWh according to Decision 21/2023/QD-TTg for transitional projects as proposed in the solution.

Sharing this story, Mr. Thinh commented that the fact that most projects do not have a confirmation of acceptance at the time of commercial operation (COD) and expect the Government to consider it is a "fault", not a "crime". Almost all concentrated solar power projects violate this regulation because this regulation is in the Construction Law, so no one pays attention, but now anyone doing renewable energy projects understands this regulation clearly.

With 413 rooftop solar farm projects, if the land is not suitable for farming and there is a violation, they will not enjoy the preferential FIT price equivalent to 9.35 UScent/kWh (before July 1, 2019) or 8.38 UScent/kWh (from July 1, 2019 to December 31, 2020).

However, the Ministry of Industry and Trade has not announced the purchase price of rooftop solar power for COD projects from January 1, 2021, so it is not known how it will be handled or if it is just that it will not be enjoyed.

Discussing the next roadmap of Vietnam Electricity Group (EVN) - the buyer of electricity from renewable energy projects, an EVN leader said that according to the proposed solutions, projects that do not meet the requirements to enjoy FIT1 and FIT2 prices will have to renegotiate the power purchase agreement (PPA). However, EVN is currently only compiling the specific status of the projects and will wait for specific guidance documents from state agencies to take the next steps. For projects related to rooftop solar power, EVN will assign power corporations to implement.

Source: https://baodautu.vn/lai-cho-huong-dan-cu-the-de-go-kho-du-an-nang-luong-tai-tao-d232720.html