“Decision 13/2020/QD-TTg dated 06/04/2020 on the mechanism encouraging Solar Power in Vietnam was issued in the middle of the global outbreak of Covid-19 and FIT is just like a shower for planted but not irrigated crops.
Why? Let’s analyze this together:
For Farm projects: FIT 2 pegs 7.09 cents for the approved projects before 23/11/2019. This confirms that at this electricity price, this Decision is only applicable to 36 or 37 projects, in which we divide into three types:
– Subject 1: Projects which were launched and dropped at FIT
– Subject 2: Projects which will have been launched after 30/6/2019
– Subject 3: Projects which are waiting for FIT (with temporarily calculated capacity of 50 MWp) to complete the procedures for bank loan or project trading: Totally inapplicable to these projects, although it could be seen there are 08 months to implement since the appearance of FIT.
+ Projects and Credit institutions, when obtaining FIT 2, will make a financial plan for loan (even if the investors repurchase the projects, they will still have to mobilize the credit capital); and complete the procedures as soon as possible until disbursement within 02 months, so that there are 06 months left.
+ 80% to 90% of the materials and equipment are imported. In principle, manufacturers in any country must have orders (or deposits) to begin production. The average time for production until CIF delivery of materials and equipment is within 04 months (regarding normal conditions, not taking into account the general situation of Covid-19 and having enough time to choose EPC contractor for making infrastructure), so that there are 02 months left.
+ The fastest time for construction in Vietnam at FIT 1 with the requirements of normal conditions and a capable contractor is 88 days (Hong Phong 4 solar power project of Ha Do Group in Binh Thuan was implemented by Saigon Gia Dinh Electric JSC). Negative 28 days.
+ Processes, tests, inspection and trial runs until commercial operation last about 02 months (different from FIT 1 EVN encouraging the debt of some test items). Negative 88 days.
Conclusion: Decision 13/2020/QD-TTg dated 06/04/2020 is an encouraging mechanism just for Subject 1 and Subject 2. However, there are reasons for the issue of the decision at the outbreak of Covid-19 and the implementation time in the FIT 31/12/2020 of the Prime Minister. There is no discussion about this.
For rooftop Solar Power:
– FIT 2 priced at 8.38 cents, which can be considered as a negligible reduction and a good investment, will take effect from 22/05/2020. This relieved the thirst for solutions to problems dealing with price and electricity payment for projects implemented after 30/6/2019.
– Rooftop projects under 1 MW are also in the same situation as Object 3 of Farm project. However, there could still be enough time before 31/12/2020 if the item “Organizations and individuals installing rooftop Solar Power must meet the requirements for electrical, environmental, and fire safety under current regulations” is exploited from Commune, Ward, District to City levels (or you could aslo understand different types of licenses are required).
Simplify the two items which Vietnam Energy Association analyzed above. We – the renewable energy (RE) community need to consider Decision 13/2020/QD-TTg as a breakthrough in Vietnam’s Solar Power. In order to do that, the RE community (Solar Power), policy makers, consulting organizations, and associations, in my opinion, need to make suggestions on the following issues together:
– For Grid-connected Solar Power (Farm):
+ Extension: Impossible! Because the Government certainly has its own reasons
+ Clear specification of the DPPA mechanism (direct production and purchase) in terms of transmission line leasing cost, contract forms and operations management cost.
+ Accelerating the promulgation of specific regulations and laws for the bidding mechanism (i.e. bidding for the electricity price, bidding for the right to connect …)
– For rooftop Solar power: Prepare and issue FIT 3 right after FIT 2 expires on 31/12/2020 so as to ensure the continuity and to keep on encouraging the development of investment in rooftop solar power for the release of local capacity.”
According to: Mr. Nguyen Duc Toan – COB of Saigon Gia Dinh JSC
