(HNMO) - Deputy Minister of Industry and Trade Dang Hoang An said that in the next few days, after completing grid connection and testing, 5 renewable energy projects will begin commercial power generation with a total capacity of 303 MW.
According to the direction of the Ministry of Industry and Trade, for projects that have completed investment and construction and completed documents, Vietnam Electricity Group (EVN) will consider temporary price agreements. After negotiations are completed and prices are agreed upon, payments will be made according to the official price from the date of electricity generation to the grid.
The Electricity Trading Company (under EVN) said that by the end of May 26, the unit had completed negotiations, signed minutes and initialed electricity purchase contracts with 40/40 investors proposing a temporary price of 50% of the ceiling price. Today (May 27), EVN will submit a document to the Ministry of Industry and Trade for consideration and approval.
To date, 19 projects (or parts of projects) have been approved by the Ministry of Industry and Trade for provisional prices and have signed power purchase contracts. In addition, 16 projects have been connected to the grid and are being tested; of which 5 projects have completed testing and are carrying out procedures for commercial power generation. 9 projects have been accepted by competent State management agencies for the entire plant/part of the plant; 26 projects have been granted electricity operation licenses for the entire plant/part of the plant.
However, up to now, 32/85 projects, with a total capacity of 1,576.05 MW, have not yet submitted documents to the power trading company to negotiate electricity prices and power purchase contracts.
According to Mr. Tran Viet Hoa, Director of the Electricity Regulatory Authority (Ministry of Industry and Trade), in recent times, investors have been “racing” to clear land and construct in order to enjoy preferential prices (FIT prices) in time, leading to expensive investment costs. Therefore, some investors of renewable energy power plants have considered the renewable energy purchase price frame lower than expected, and have not submitted documents to negotiate electricity prices with EVN, leading to prolonged negotiation time and waste of resources.
In addition, many investors have violated legal regulations on planning, land, construction investment, etc., so they have not yet met legal procedures and cannot negotiate prices with EVN. Some investors have been asked to supplement their documents since the end of March 2023, but after 2 months, they have not been completed.
According to the representative of the Ministry of Industry and Trade, renewable energy projects have been receiving many incentives in the past. The preferential price policy has been clearly announced in terms of roadmap, price level, and incentive period. During that time, many large-scale projects in localities, despite difficulties, have still been put into operation on schedule to enjoy the FIT price mechanism.
Following the trend not only in Vietnam but also in the world, the FIT mechanism price tends to decrease gradually. Thus, not all projects record effective profitability. Therefore, investors need to make efforts to optimize management, administration, operation, etc. to increase profitability with the new price range. Projects with the capacity to develop and operate projects as well as the ability to access cheap capital will have an advantage in this period.
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