Regulations on developing biomass power projects

Regulations on developing biomass power projects - 

On December 15, 2015, the Ministry of Industry and Trade (MOIT) issued the Circular No. 44/2015 / TT-BTC (Circular 44) to stipulate the project development, avoided costs tariff and pattern power purchase agreement for biomass power projects.

The Circular 44 is applicable to the biomass power project investors, management and operation units, buyers, development organizations and other relevant organizations, individuals.

According to the Circular 44, the investors only have permission to set up the investment project for biomass power projects under the planning projects on biomass energy use and power development.

For biomass power projects with investment diverging into different phases, the investors have responsibility to make investment projects for each phase. In case the time to put the project into operation deviates for over six months than expected the investors have to report the situation to the Provincial Peoples Committee (PPC) and General Department of Energy (GDE) - MOIT. The content of a biomass power investment project is established in accordance with the regulations of the law on the project construction investment management.

The principle considered for supporting an off-grid biomass power project is that the project has been completed and put into operation with ensuring the socio-economic and environmental effect.

The key input data to calculate electricity prices and supporting unit costs for the biomass power project are examined on following principle: in case, the project installed capacity is larger than the actual demand of the local power grid, the power generation in previous year and expected generations in following years are used to define supporting unit costs. For the other projects, the larger figure among the actual generation and expected generation in the approved investment project is taken. Total investment level is also the one in the approved investment project. The amortization is carried out accordingly to current laws.

Regarding order to register supporting electricity prices for the off-grid biomass power projects, the investors themselves make documents to register supporting electricity prices and send them directly or by postal service to General Department of Energy. The number of the documents include 10 (ten) sets and 01 (one) CD/DVD/USB containing software on documents to ask support and attaching documents.

Within 30 days from the date of receiving adequately regular papers, GDE is responsible to organize to appraise the documents and report MOIT for submitting Prime Minister to consider and approve. In the essential case, GDE is allowed to hire the consultants for appraising and commending the documents. In case of not enough and regular papers, within 5 working days, from the receiving date, GDE has to inform the investors by written paper for asking them to add or redo the document.

The documents to suggest supporting electricity price for the off-grid biomass power projects include: the document to suggest supporting electricity price for the off-grid biomass power project, investment project with the presentation on the investors, electricity price option and main contents relating the necessity and effect of supporting electricity price option; the plans for project operation and business; the spending plan and technical option for dismounting and handling equipment when liquidating the project; the opinions of the PPC on the documents for supporting suggestion.

The Circular 44 takes effect from January 25, 2016.

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