The availability of subsidies for domestic projects in Vietnam has been in flux. Recently, according to PVmagazine, Vietnam’s ministry of industry and trade (MoIT) is recommending that the government maintain Internet subsidies for large photovoltaic power stations instead of switching directly to bidding.
According to Vietnam law firm Lexcomm, MOIT is urging the government to keep the ground mounting system project FIT within $0.0709 / KWH, floating FIT of pv power station at $0.0769 / KWH, applies only to before November 23, 2019 approved by the project, if the project grid by the end of 2020, can get the original subsidies. It is understood that there are about 36 of these solar mounting system projects, with a total scale of 3GW, which have all been approved for development.
Although, this contradicts the ministry’s proposal to introduce nationwide bidding in December 2019.
In 2017, the Vietnamese government announced that projects put into production by the end of June 2019 would be eligible for a 20-year FIT contract, the price is $0.0935 / kWh, high feed-in tariffs have led to a surge in pv installations in Vietnam in the first half of 2019, a flood of projects rushed into production ahead of the fixed tariff deadline, the blowout power generation caused the grid to be severely overloaded, some new projects are facing the dilemma of power transmission. As of June 30, 2019, in a few short months, just 4.5g pv projects will be integrated into the grid much higher than the 850MW expected by 2020 (five times higher than expected!).
The explosion of pv projects has overwhelmed Vietnam’s government finances and power grid, as a result, the government decided to end subsidies in November, and start bidding for Internet access.
On November 22nd 2019, Vietnamese prime minister Nguyen Xuan Phuc signed notice NO.402/ tb-vpcp, announcing the implementation of the grid bidding model for surface pv power station projects and the abolition of the feed-in tariff (FiT) mechanism.Nguyen xuan phuong, the prime minister, cited Vietnam’s weak power grid infrastructure as a major factor affecting the growth of the renewable energy sector.
Vietnam’s shift in pv policy has brought disaster to domestic developers. In December last year, investors from 60 power stations facing project bankruptcy submitted a joint petition, suggesting that the government and the ministry of industry and trade should introduce guaranteed feed-in tariffs as soon as possible, as well as policies to address problems encountered in grid upgrading. On the issue of power grid upgrading, they proposed whether private consortia could be allowed to invest in power grid construction if the government had no money to do so.
Vietnamese media also believe that if the government implements the auction plan immediately, the development of large-scale projects in the country is likely to stall. MOIT proposed to maintain the electricity price subsidy is also for the stable development of the domestic pv industry.
If MOIT’s recommendations are adopted, Vietnam’s 2020 capacity could be higher than previously expected.
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