The conclusions of Prime Minister of Vietnam about the draft on solar power development mechanism

The conclusions of Prime Minister of Vietnam about the draft on solar power development mechanism - 

On November 13, 2019, at the Government Headquarter, Prime Minister Nguyen Xuan Phuc chaired the Meeting of the standing members of the government on the Draft of Solar Power Development Promotion Mechanism in Vietnam, applied from the 1/7/2019, following the Decision No. 11/2017 / QD-TTg dated 11/4/2017 of the Prime Minister (Decision 11). 

The conclusions of Prime Minister are as follow:

1. To ensure electricity supply associated with environmental protection and sustainable development in the context of limited domestic fossil resources, the Government has been encouraging the development of the renewable energy sources in our country, especially solar power. The Prime Minister promulgated the Renewable Energy Development Strategy in Vietnam to 2030 with a vision up to 2050 attached with the Decision No. 2068 /QD-TTg dated November 25, 2015, the Decision 11 on mechanism to encourage solar power development in Vietnam.

The overall guiding view is to achieve the long-term strategic goals on renewable energy, suitable with the potential of the country, while to ensure the overall efficiency of the economy, including optimization of using land resources, maximum minimization of using the forest land, avoid great impact on electricity production costs, and ensure the harmonious interests of the State - Investors - People.

In the recent period, the investment in developing solar power projects has strongly attracted many domestic and foreign investors. The reports of the Ministry of Industry and Trade (MOIT) and Electricity of Vietnam (EVN) show that recent time, the progress of investing solar power projects developed very rapidly and safely. Today in country there about 4,500 MW of solar power projects have been in commercial operation, these solar power projects contribute a lot to environmental protection and guarantee the electricity supply for socio-economic development of the country and daily needs of the people.

The above results achieved in the context of many large thermal power plants being delayed have been positively evaluated by ministries and agencies. .

However, in recent implementation process of solar power development there was a number of shortcomings and limitations as:

Firstly, the capacity of solar power projects developed is very large in comparison with the capacity planned in Power Development Planning VII (adjusted). The implementation of the National Solar Power Development Planning was very slow, not drastic, and not met general requirements for managing the solar power development.

Secondly, MOIT lacked the scientific and practical management and accurate forecast on the solar power development planning.

Thirdly, there was no effective and timely control measure to avoid the massive investment wave for developing solar power projects, especially overinvestment in some areas that caused difficulties in releasing transmitting power and affected the operation of the national power system and the interests of investors.

Fourthly, the investment management was not transparent, close and synchronized.

The MOIT needs to draw experiences from the above-mentioned shortcomings and drawbacks to promote the publicity, transparency and efficiency in management of solar power development as well as other forms of renewable energy in the coming period.

2 / The Government will continue to pay attention to the rational development of renewable energy sources, especially solar power projects, which have a great potential in our country. However, it is necessary to calculate the structure of power sources in a scientific and methodical manner; must completely transit to the bidding mechanism, resolutely reject the status of asking - giving; focus on handling projects that have been and are about to be completed but not promptly put into operation before July 1, 2019 to utilize and promote the efficiency of investment resources.

3/Promulgating the solar power price applied from July 1, 2019, following the Prime Minister's Decision No. 11/2017/QD-TTg of April 11, 2017, must be complied with a number of following principles:

Focusing on places with potential, advantages and conditions for good development to guarantee the overall efficiency of the economy; give priority to encouraging rational development of rooftop solar power projects with the advantage of not requiring land area and investment in grid connection and transmission; Solar power development must be considered and calculated for the long-term goals in order to achieve the strategic objectives and ensure reasonable development scale in each period associated with environmental protection.

The development of solar power must comply with the planning and ensure the balance of the power system, avoid massive development, causing great impacts on the electricity production costs of the entire power system, ensuring the harmonious interests of the state and investors and people.

Implementing non-retroactive regulation on electricity prices for solar power projects that have been subject to the FIT tariff (under Decision 11); creating conditions for reasonable development and ensure legal benefits for investors.

Promulgating a fixed incentive tariff (FIT tariff) generally applied to rooftop solar PV throughout the country and within a certain period of time; consider and issue the FIT tariff applicable to projects for which the power purchase contracts were signed and to projects with starting construction at present and putting into operation in 2020; For the remaining projects and new projects the FIT tariff will not continuously be applied but should implement the open, transparent and the FIT tariff, but instead move to implement in the form of open, transparent and competitive bidding to reduce the purchase price of electricity from solar power projects.

The price of solar power applied to projects in Ninh Thuan province complies with the Government's decision in Resolution No. 115 / NQ-CP of August 31, 2018, on implementing a number of the specific mechanisms and policies to support Ninh Thuan province for the socio-economic development, and stabilizing production and people's life in the period of 2018-2023. This price will be applied until whenever Ninh Thuan province to reach full capacity of 2,000 MW or to the end of 2020, whichever criterion comes first. The Ministry of Industry and Trade and Ninh Thuan provincial peoples committee have to strictly implement this decision.

4/ Based on the above orientations and principles, assigning MOIT as the main responsible person in coordination with the Ministry of Finance and EVN urgently to carry out the following tasks and report them to the Prime Minister before 15/12/2019:

Reviewing and unifying the FIT tariff applied for rooftop solar PV with ensuring a compliance, avoiding to take advantage of policies for profiteering. MOIT

Unifying to apply the FIT tariff only for the projects having the signed Power Purchase Agreement, or construction of that is implementing and for projects putting into operation in 2020 (with a specific list attached to the documents). The MOIT in coordination with relevant agencies to review and report specifically the list of solar power projects applying the new FIT tariff, and will be responsible to the Prime Minister for the accuracy of this list of projects to ensure fairness, publicity and transparency.

Unifying bidding mechanism for solar power development, reporting to the Prime Minister to consider and promulgate this bidding mechanism as a basis for implementation of the remaining projects and new projects.

5 / Due to some changes from the MOIT documents as Report No. 3061/TTr-BCT by 3/5/ 2019, Document No. 65 / BC-BCT by 18/6/2019 and Decision No. 119 / BC-BCT by 19/9/2019, the Prime Minister assigns the Ministry of Justice to appraise strictly, accordingly to the current regulations the Prime Minister's Draft Decision that has been perfected by the MOIT.

6 / Assigning the MOIT to focus on directing to carry out the following tasks:

To be the main responsibility person, in coordination with the Committee for managing the state capitals in enterprises, EVN, concerned ministries, agencies and local authorities to handle the problems related with releasing and transmitting power from the solar power projects being in operation, to speed up the progress of investing and constructing power transmission grids for releasing full capacities from the solar power projects being in commercial operation accordingly to current regulations for avoiding the generation reduce and costs increase of solar power projects that cause losses for investors, especially in the current difficult conditions of the power supply.

Urgently to prepare the National Electricity Development Planning for the period of 2021 - 2030, with a vision to 2045 (PDP VIII) with ensuring the scientific basis, reasonable power generation structure, transmission capacity and competitive electricity market, encouraging the rational and sustainable development of renewable energy, saving and efficient using land and water surface areas.

Report PDP VIII to the Prime Minister for approval in 2020.

7 / The National Steering Committee for the Power Development must regularly direct and resolve the problems in order to accelerate the progress of key and urgent projects.

8 / The concerned ministries and agencies are required to raise their sense of responsibility, not to avoid the responsibility, especially for projects currently facing many difficulties and obstacles to accelerate the progress. Absolutely do not let power shortage in the near future; deploy the projects with the open, transparent activities and fighting against the negative corruption and group interests.

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