New Draft Decision (Draft No. 3) On The Mechanisms To Encourage The Development Of Solar Power Projects In Vietnam.

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Asia Pacific Legal Updates

 

5 June, 2019

 

New Draft Decision (Draft No. 3) On The Mechanisms To Encourage The Development Of Solar Power Projects In Vietnam.

 

The current Decision No. 11/2017/QD-TTg of the Prime Minister, dated 11 April 2017, providing the encouragement mechanism for the development of solar power projects in Vietnam (Decision 11), is in effect only until 30 June 2019. On 12 April 2019, the Ministry of Industry and Trade of Vietnam (MOIT) published a new draft Decision (Third Draft Decision) to replace the Decision 11 and the current draft Decision issued on 22 February 2019 on the same matter (Second Draft Decision).

 

(i)  While the Second Draft Decision subdivides grid connected solar power projects into three different groups, based on the solar power technology utilised by each project, including (i) floating solar power project; (ii) ground solar power project; and (iii) solar power project integrating a storage system, the Third Draft Decision now removes the definition and the separate feed-in tariffs (FiTs) for solar power project integrating a storage system.

 

(ii)  Also, according to the Third Draft Decision, the electricity producer is entitled to sell electricity to different electricity buyers other than Electricity of Vietnam Corporation (EVN) and EVN’s authorised member units, under a direct power purchase agreement (the DPPA). Accordingly, the electricity price and the terms of the DPPA will be negotiated and agreed by the parties, regardless of the FiTs and prices applied by EVN.

 

(iii)  The Third Draft Decision also increases the power purchase tariffs applicable to the power output from floating solar power project as follows1:

 

Solar power technology

Region I

Region II

Region III

Region IV

VND/ kWh

Equivalent USD cent/ kWh

VND/ kWh

Equivalent USD cent/ kWh

VND/ kWh

Equivalent USD cent/ kWh

VND/ kWh

Equiva- lent USD cent/kWh

Floating solar power projects

page5image25384 page5image25544

2.281

9,98

page5image27000

1.963

8,59

page5image28456

1.758

7,69

page5image29912

1.655

7,24

page5image31368
       

Ground solar power projects

2.102

9,20

1.809

7,91

1.620

7,09

1.525

6,67

Rooftop solar power projects

2.486

10,87

2.139

9,36

1.916

8,38

1.803

7,89

 

The power purchase tariffs of the power output from grid connected projects shall only apply to a part or to entire grid connected projects which reach commercial operation date (COD) from 1 July 2019 to 30 December 2021, and shall last for 20 years from the COD.

 

 

For further information, please contact:

 

Mark Fraser, CEO/ Managing Partner, Frasers Law Company

mark.fraser@fraservn.com

 

  1. (a)  Region I includes 28 provinces in the north of Vietnam: Ha Giang, Bac Kan, Cao Bang, Tuyen Quang, Thai Nguyen, Lao Cai, Yen Bai, Lang Son, Quang Ninh, Phu Tho, Vinh Phuc, Bac Giang, Hai Duong, Hoa Binh, Ha Noi, Ha Nam, Bac Ninh, Hung Yen, Hai Phong, Ninh Binh, Thai Binh, Ha Tinh, Nam Dinh, Quang Binh, Thanh Hoa, Lai Chau, Nghe An and Son La;

  2. (b)  Region II includes 6 provinces in the center of Vietnam: Quang Tri, Dien Bien, Thua Thien Hue, Quang Nam, Da Nang and Quang Ngai;

  3. (c)  Region III includes 23 provinces in the south of Vietnam: Kon Tum, Ca Mau, Hau Giang, Binh Dinh, Bac Lieu, Kien Giang, Soc Trang, Can Tho, Vinh Tho, Tra Vinh, Lam Dong, Ben Tre, Tien Giang, An Giang, Dak Nong, Ho Chi Minh City, Dong Nai, Dong Thap, Ba Ria – Vung Tau, Long An, Binh Duong, Binh Phuoc and Tay Ninh; and

  4. (d)  Region IV includes 6 provinces in the south center of Vietnam: Phu Yen, Gia Lai, Dak Lak, Khanh Hoa, Ninh Thuan and Binh Thuan.