Waiting for solar power price makes investors anxious

	Single solar power price: Concerns about less competition, grid overload
	Vietnam"s solar energy sector a magnet for foreign companies, funds
	Solar power rises, but lags demand

Grid overload is the current problem when solar energy projects in some localities are booming. Photo: Nguyen Thanh

Dilemma

GA Power Solar Park Co., Ltd. (Germany), a 100% foreign-invested enterprise, has invested in two solar power plants with a capacity of 60MW in Ha Tinh, with capital of US$50 million. According to the original plan, the plant would generate electricity forthe grid to enjoy the preferential price of US9.35 cents per kWh (equivalent to VND2,100 per kWh). However, for many reasons, this project has not been able to generate electricity as planned. That is the reason why the company leaders feel concerned that the draft price forsolar power after June 30 is a singleprice, reduced to VND1,620 per kWh for ground-mounted solar energy project.

Mr. Bui Quang Cuong, Director of GA Power Solar Park Co., Ltd said: “Currently, we have cleared the ground, transferred the money to install equipment, and many devices have docked.With the new expected price, whether or not we continue this project, we are at a loss or in a difficult situation. If this project had not been implemented, we would not do it again.”

Sharing the concern with the leader of GA Power Solar Park Co., Ltd., the director of an enterprise investing in a solar power project in Thanh Hoa, said the project invested by this enterprise had completed 70% of the workload.With an expected price of VND1,620 per kWh, investors will surely suffer losses. “After June 30, when the new price has not been fixed, the bank temporarily stopped disbursing for the project.If a price like the latest proposal is applied, the bank will not disburse it either. That means investors will lose the money they spent, and even go bankrupt. The bank will also face difficulties. Such low prices will certainly cause many businesses to leave,”said the director.

Looking forward to dividing multiple price

Although the Ministry of Industry and Trade has officially proposed the Prime Minister to consider theoption of a single solar power price applied nationwide, the Ministry also analyzed that besides the advantage, whichwas that the FIT price (the price of electricity produced from renewable sources supplied or sold to the grid) policy is simple because there is only single price and no higher support is needed in areas with low radiation potential, this solution had two big disadvantages.First, the incentive is lower for projects in the North and Central regions to address the risk of power shortage until 2023 in the South.Second, due to the concentration of many solar power projects in areas with good radiation potential, there is a risk of overload of the transmission grid.

Regarding this issue, Mr. Bui Quang Cuongsaid if the Government issued asingle solar electricity price nationwide,attracting investment in solar power in the North Central provinces including ThuaThien - Hue, Quang Tri, Quang Binh, Ha Tinh, Nghe An and Thanh Hoawould be difficult.That is because the radiation in these provinces is not as high as in the southern provinces, especially in the southern central provinces such as NinhThuan andBinhThuan. This, of course, will cause investors to continue investing in high-radiation areas, causingtransmission system overload, which has been happening in NinhThuan and BinhThuan.

Also involved in investment in solar power, waiting anxiously for the price to apply after June 30, even sent a letter to the Prime Minister and the Minister of Industry and Trade about the issue of solar power price, Mr. Le Van Hoang, Director of Hoang Son Investment and Tourism Investment Joint Stock Company, expressed his wish to the Government to issue an electricity prices according to three price regions or four price regions."Although the price is not equal to the old price that has been applied before June 30, it should not be too low," said Hoang.

Speaking at the opening ceremony of the Vietnam Renewable Energy Week in mid-September, Mr. Le Hai Dang, Head of Strategy Department, Electricity of Vietnam (EVN),said it was necessary to have solutions to determine transmission capacity limits on the North-South 500kV transmission line; adding special protection systems (load shedding by voltage, under stable limits), and research the ability to apply energy storage devices to promote the development of renewable energy.

EVN has proposed the Prime Minister and the Ministry of Industry and Trade continue encouraging the development of renewable energy projects under the FIT price mechanism so that about 12,700MW of solar power and 7,200MW of wind power in the period to 2023 (prioritizing the development of planned projects without transmission grid constraints) could be able to begin operation.In addition, EVN also proposed completing and promulgating regulations on renewable energy development in the form of bidding to increase transparency and reduce the purchasing electricity price from projects.

In the latest Decision of the Prime Minister on the incentive mechanism for solar power development in Vietnam, the Ministry of Industry and Trade proposed the Prime Minister consider and approve the decision of a single price for the whole country instead of dividing into two or four price regions (according to radiation intensity). Specifically, ground-mounted solar energy project is at VND1,620 per kWh, equivalent to US7.09 cents per kWh; the floating solar energy project is VND1,758 per kWh, equivalent to US7.69 cents per kWh; the rooftop solar power project is VND2,156 per kWh, equivalent to US9.3cents per kWh.