Mechanism for renewable energy development

An enterprise in Dong Nai is introducing solar power installation model

Numerous priority mechanisms

Many enterprises believe that a change in policy is the biggest risk for RE investors. It is due to the fact that before implementing the project, the investor has carefully calculated the investment cost, selling price and time to profit based on the current price set by the Ministry of Industry and Trade, so changes in price bracket causes many disadvantages for the unit in management. Therefore, it is necessary to agree on bidding mechanism for grid-connected RE power projects; mechanism of socialization of investment in transmission grid; or issues related to management, installation technical standards, safety of rooftop solar PV products and services and stabilization of the price bracket for purchasing RE electricity from the State.

In fact, over the past time, the Government has issued many mechanisms and policies to encourage the development of RE resources, such as Decision No. 2068/QD-TTg dated November 25, 2015 approving the RE development strategy of Vietnam to 2030, with a vision to 2050; Decision No. 39/2018/QD-TTg of the Prime Minister dated September 10, 2018 on the mechanism to support the development of wind power projects in Vietnam.

The most recent is Decision No. 13/QD-TTg dated April 6, 2020 on the mechanism to encourage the development of solar power projects in Vietnam. Accordingly, the purchase price of electricity from grid-connected solar power projects for commercial operation before January 1, 2021 with a total cumulative capacity of not more than 2 thousand MWp to be nearly 2.1 thousand VND and is applicable for 20 years from the date of commercial operation. Electricity price is adjusted according to fluctuations of the exchange rate of VND/ USD.

Regarding Decision 13, applying electricity purchase prices for 20 years to grid-connected projects from July 1, 2019 to December 31, 2020, Deputy Minister of Industry and Trade Hoang QuocVuong said that the Ministry is studying and proposing the Government to extend the preferential purchase price period, possibly by the end of 2021 and complete the legal framework for many households, businesses and investors to participate in the development of rooftop solar power. "In fact, when the decision was issued in April 2020, right at the time when the Covid-19 pandemic broke out and social distancing was being implemented, many investors, households and businesses were affected by the epidemic, so it took more time to implement," - said Mr.Vuong.

Deputy Minister of Industry and Trade added that the Party and State's strategic guidelines and orientations on energy development, including RE, are very clear. The Government has also introduced incentive mechanisms and policies suitable to development practices for each period and towards fairness and transparency, creating conditions for all economic sectors to participate in development in order to fully exploit advantages and potential of RE resources in Vietnam for sustainable socio-economic development.

Dong Nai is plentiful of advantages

According to Vice Chairman of the Provincial People's Committee Tran Van Vinh, Dong Nai is a province of industrial development, 75 percent of the electricity output is used for industrial production and construction and this number will increase rapidly in the coming years. In terms of transport and water infrastructure for industrial development, the province can be completely proactive, but it is difficult for the electricity infrastructure to commit to foreign investors because of its dependence on the electricity industry. The process of investing in industrial power grid projects takes a long time for site clearance and transmission line connection. Therefore, the development of RE in Dong Nai is very necessary. On the basis of the State regulations, the Ministry of Industry and Trade and the province will soon issue a mechanism to prioritize and encourage the development of renewable energy, mainly rooftop solar power and electricity from waste treatment.

In order to create an open mechanism for investors, businesses and households to participate in the development of rooftop solar power, Vice Chairman of the Provincial People's Committee Tran Van Vinh said that, at present, businesses, investors, and households are only allowed to install solar panels on rooftops with a capacity of not more than 1 MWp, directly or indirectly connected to the grid with a voltage of 35kV or less is not appropriate. Enterprises in industrial zones and hi-tech agricultural production areas in Dong Nai have large factory roof areas. In addition, the regulation that solar power projects larger than 1MWp must supplement the national electricity development plan causes a loss of opportunities for many investors; enterprises operating in industrial zones buy back electricity from an infrastructure business that has difficulty selling RE electricity back to the state.It is necessary to clarify the concept of "rooftop solar power" so that the enterprises in industrial zones and investors of hi-tech agricultural projects are convenient in purchasing and trading renewable energy.

Dong Nai Power One-Member Limited Company said that in the coming time, Dong Nai will become one of the most developed regions of rooftop solar energy. This will help Dong Nai Electricity reduce supply and investment pressure on infrastructure and better implement the green economic growth target.

To meet the development requirements of the province, Dong Nai Electricity is building a plan for electricity development in general and rooftop solar power development synchronously in particular, from power generation and transmission to distribution. This planning must be synchronized with the land planning and development orientation of the province and support businesses, investors, and households to connect to the grid and purchase electricity according to the State's regulations.

Phan Anh