Under Resolution 115 released in 2018 on implementing mechanisms and policies to support Ninh Thuan, the government allowed the province to enjoy the preferential power selling price of 9.35 US cent per kwh in accordance with Decision 11, applied to 2,000MW of solar power in the province from 2017 to the end of 2020

However, MOIT then gave advice to the government on including other projects in the list of projects subject to the preferential FIT (feed in tariff) rate. The projects were ones already planned, and ones which received approval after the resolution was released.

As a result, 14 solar projects could enjoy the preferential price of 9,35 cent per kwh, though they were not entitled. So, from 2020 to June 30, 2022, the amount of money Electricity of Vietnam (EVN), the sole electricity wholesale buyer, had to pay for electricity it bought was VND1.481 trillion higher than regulated.

“This is contrary to Resolution 115 and the Prime Minister’s conclusion shown in the notice released on November 22, 2019 by the Government Office,” the Government Inspectorate stated, pointing out that it is MOIT which has to take responsibility for this.

The 14 projects unjustly enjoying preferential FIT rate are Hacom Solar; Sinenergy Ninh Thuan 1; Thuan Nam Duc Long; Thien Tan Solar Ninh Thuan; Phuoc Ninh; Son My 2; Son My; Solar Farm Nhon Hai, Bau Zon; Thuan Nam 12, SP Infra 1; Adani Phuoc Minh; Ho Ba Ngu and the 450MW Thuan Nam combined with the  500KV Thuan Nam Station and 500kv and 220kv transmission lines.

When the FIT mechanism in accordance with Decision 11 expired, MOIT gave advice to the government to promulgate Decision 13 in 2020. However, the conditions for solar power projects with connection to the national grid enjoying the FIT rate of 7.09 cent per kwh (Article 5) advised by MOIT were not in line with the Standing Government.

The government directed to consider and promulgate FIT rates applied to projects which already have PPA (power purchase agreement) and projects under execution and to be put into operation in 2020. As for the remaining projects and new projects, the FIT mechanism won’t be applied. The selling prices will be determined by open bidding.

However, MOIT argued that there was no basis to think that the decisions and circulars on solar power were no longer valid, so there was no basis for EVN to sign PPAs with investors, and therefore, the ministry did not accept EVN’s proposals in Document 6774EVN dated December 12, 2019.

Luong Bang