Expanding the target audience for preferential prices

The Government Inspectorate has just announced the conclusion of the inspection of compliance with legal policies in the management and implementation of the VII and adjusted VII power plans, pointing out a series of shortcomings and violations by the Ministry of Industry and Trade.

According to Resolution 115 of 2018 on implementing a number of specific mechanisms and policies to support Ninh Thuan province, the Government agreed that this province will enjoy the electricity price threshold policy of 9.35 US cents/kWh according to Decision 11 of 2017 until the end of 2020 with a total solar power capacity of 2,000 MW.

However, the Ministry of Industry and Trade has advised expanding the scope to include projects already in the planning and projects approved for additional planning after the issuance of Resolution 115.

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As a result, 14 solar power projects enjoyed preferential prices of 9.35 US cents/kWh for the wrong subjects. From 2020 to June 30, 2022, the total amount that EVN must pay is about VND 1,481 billion more than the payment according to the correct subjects in Resolution No. 115.

"This is contrary to the content of Resolution 115 and the Prime Minister's conclusion in the Notice dated November 22, 2019 of the Government Office," the Government Inspectorate stated, identifying the responsibility as belonging to the Ministry of Industry and Trade in its advisory role.

The projects include Hacom Solar, Sinenergy Ninh Thuan 1 solar power, Thuan Nam Duc Long, Thien Tan Solar Ninh Thuan, Phuoc Ninh, Son My 2, Son My, Solar Farm Nhon Hai, Bau Zon, Thuan Nam 12, SP Infra 1, Adani Phuoc Minh, Ho Bau Ngu and 450MW solar power project combining 500kV Thuan Nam station and 500kV, 220kV lines.

After the FIT price under Decision 11 expired, the Ministry of Industry and Trade advised the Government to issue Decision 13 in 2020. However, the conditions for grid-connected solar power projects to apply the preferential price (FIT) threshold of 7.09 US cents/kWh (Clause 1, Article 5) under Decision 13 advised by the Ministry of Industry and Trade are not consistent with the conclusion of the Government Standing Committee.

The Government directed to "consider issuing the FIT price list applicable to projects that have signed power purchase contracts and are under construction and put into operation in 2020; For the remaining projects and new projects, the FIT price list will not continue to be applied but will be completely switched to implementation in the form of public, transparent, and competitive bidding...

However, the Ministry of Industry and Trade stated that there was no basis for claiming that the decisions and circulars on solar power had expired, so there was no basis for EVN to sign power purchase contracts with investors, and did not fully accept EVN's valid opinions (in document 6774/EVN dated December 12, 2019) .

From there, the Ministry of Staff followed the direction of expanding the project by allowing projects that have been approved by competent authorities to enjoy the FIT price of 7.09 UScent/kWh. This violation by the Ministry of Industry and Trade also led to 14 projects enjoying the FIT price of 7.09 UScent/kWh for the wrong subjects...

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List of 14 projects enjoying price of 7.09 cents/kWh is not for the right subjects.

Responsibility of many agencies

According to the inspection conclusion, the main responsibility for the above shortcomings and violations belongs to the Ministry of Industry and Trade with the role of leading consultant. However, regarding the consultation on conditions for grid-connected solar power projects to apply the FIT price of 7.09 US cents/kWh, the Government Inspectorate believes that there is also responsibility of relevant ministries and agencies such as Finance, Justice, Planning and Investment, Natural Resources and Environment, Agriculture and Rural Development, Science and Technology, Construction, the State Capital Management Committee at Enterprises, the Government Office and EVN when they agreed with the proposed plan of the Ministry of Industry and Trade.

Proposing a direction for handling responsibilities, this agency has sent a document transferring electricity-related cases to the Ministry of Public Security's Security Investigation Agency for consideration and handling according to legal regulations.

Regarding the 14 projects that are enjoying incorrect FIT prices mentioned above, the Government Inspectorate requested the Ministry of Industry and Trade to take the lead in proposing economic solutions when EVN "shoulders" more than 1,400 billion VND for purchasing electricity from the wrong subjects.

In addition, the Government Inspectorate also discovered that solar and wind power projects had been recognized as having commercial operation date (COD) and enjoying FIT prices without having received written approval from competent State agencies for the results of the investor's construction acceptance. This also caused loss of State assets.

Therefore, this unit requested the Ministry of Industry and Trade to coordinate with Vietnam Electricity Group to review and handle. During the review process, if signs of criminal law violations are detected, it will be transferred to the investigation agency for consideration and handling according to regulations.

The Government Inspectorate concluded that the Ministry of Industry and Trade did not properly implement regulations on planning for power source development, causing an imbalance between sources and grids, and the structure of power sources and the addition of solar power did not ensure transparency, leading to the risk of asking for and giving.