Behind the renewable electricity numbers exceeding the planning

The Government Inspectorate has just announced the conclusion of the inspection of the compliance with legal policies in the management and implementation of the VII and VII adjusted power planning, in which it pointed out a series of shortcomings and violations by the Ministry of Industry and Trade. The issue of the boom in investment in wind and solar power has been noted by the Government Inspectorate on many issues.

From another perspective, the investment in wind and solar power projects from 2018-2021 has contributed to providing a significant amount of electricity to the economy, from an insignificant proportion to now accounting for about 15-16% of the total system output. Especially during the power shortage in the summer, this renewable energy source has contributed to reducing the level of power shortage.

Actual results in 2019, 2020, 2021 and 2022, the significant increase in renewable electricity output has contributed to a sharp reduction in high-priced oil-fired electricity.

"The amount of savings is about 10,850-21,000 billion VND," the Government's report sent to the National Assembly earlier this year estimated.

The National Assembly's Energy Oversight Delegation also assessed: "Looking at the context of power source development at this stage, the above policies have helped minimize the risk of short-term power shortages and created a significant amount of reserve capacity, reducing coal imports while increasing the national energy security index."

According to EVN, the price of solar and wind power in the past 3 years has been cheaper than imported coal plants. If you do not buy renewable energy, you will have to buy more imported coal power. Specifically, imported coal thermal power plants have increased to 3,537.21-4,230.4 VND/kWh (equivalent to 14.2-16.9 US cents/kWh).

For example, on the hottest day of May 19, 2023, solar and wind power "saved" 115 million kWh out of a total of 923 million kWh (12.5%) when the whole country had fully exploited its power source.

“The North lost only 500 million kWh of electricity last June, but the World Bank calculated the loss at 1.4 billion USD. The South is buying more than 30 billion kWh of renewable energy every year. What would happen if there were no renewable energy in the South?”, an energy expert calculated.

Hurry up about preferential price and acceptance

In the inspection conclusion, the Government Inspectorate stated that: Hundreds of projects approved by the Ministry of Industry and Trade for supplementation (for projects under 50 MW) or advised the Prime Minister to supplement (for projects over 50 MW) have no legal basis for planning, no basis for management, control and ensuring competition in attracting investment, and the risk of giving and receiving mechanisms arising.

The Government Inspectorate also identified 14 renewable energy projects that are enjoying incorrect preferential prices (FIT) and requested the Ministry of Industry and Trade to take the lead in proposing economic solutions to handle the situation when EVN "shoulders" more than VND 1,400 billion that has been purchased from these projects.

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Many solar power projects enjoy preferential prices for the wrong subjects. Photo: Xuan Ngoc

In addition, 14 other projects also enjoyed the preferential price of 7.09 UScent/kWh for the wrong subjects... They are Ea Sup 1, 2, 3, 4, 5; Jang Pong phase 2, KN Van Ninh, Long Son, Thac Mo, Phan Lam 2, Ho Nui Mot 1, Cam Hung, Hong Liem 3, VNECO Vinh Long.

In addition, the Government Inspectorate also pointed out that 26 solar and wind power projects had been recognized as having commercial operation date (COD) and put into operation without the competent State agency having issued a written approval of the results of the investor's construction acceptance.

A representative of a company that was charged with incorrect prices said that they have not yet been notified of a price renegotiation plan. According to the company, this is a matter of contractual relations between EVN and the investor. The electricity purchase contract is based on the model contract of the Ministry of Industry and Trade. In that contract, the investor and EVN also have the right to agree on anything that is not prohibited by law. If the investor violates any regulations during the construction, planning, import of equipment and materials, compensation, etc., it is the relationship between the company and the public authority.

If an investor violates something, he will be administratively punished for it. Many projects have been transferred to foreign investors, so economic handling is even more difficult.

Mr. Nguyen Minh Duc, a public policy expert, said: It is natural to handle people who approve projects without basis and against the law, but I hope that the authorities will consider not handling businesses that have had projects approved like that.

If a business gets its project approved by the authorities today, and tomorrow it is discovered that the officer who signed the decision made a mistake, the business's interests will not be guaranteed, which will be very risky for the business.

Many times requested to supplement the Acceptance Results but did not receive a clear answer.

A responsible official at EVN said: Since the end of 2018, when there were no solar power plants in operation, EVN reported and requested the Ministry of Industry and Trade to issue a COD recognition process. However, EVN has not received any response.

When discovering inconsistencies between the Model Power Purchase Agreement issued by the Ministry of Industry and Trade and documents under the Construction Law, in June 2021, EVN sent a document to the Ministry requesting permission to add "results of acceptance of completed works for putting into use" to the conditions for COD recognition for wind and solar power projects. However, the Department of Electricity and Renewable Energy only gave general instructions.

In subsequent documents, EVN also did not receive any warnings from the Ministry of Industry and Trade about EVN's recognition of COD of the above power plants not in accordance with regulations.

According to research, circulars of the Ministry of Industry and Trade related to wind power and solar power from 2022 and earlier do not specifically mention the requirement of having a document from a competent state agency approving the inspection of acceptance work before EVN purchases electricity.

On April 21, 2023, the Ministry of Industry and Trade issued Circular No. 10/2023, which mentioned the need for a document accepting the acceptance results when CODing renewable power plants.

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