DRAFT ON NEW GREEN POWER PRICING STRUCTURE EXPECTED IN NOVEMBER

The Ministry of Industry and Trade (MoIT) is currently gathering data for a draft, expected in November, on the best approach to building a new pricing structure for solar and wind power.

According to the draft, the solar power price will be determined based on the intensity of sunlight in each region, with the northern price bracket remaining higher to stimulate investment.

The draft is expected to suggest that the pricing structure be similar to that which has been applied to transitional projects specified in Circular No.15/2022/TT-BCT, but will differ on input parameters.

The parameters will include installed capacity, the economic life of the project, debt repayment periods, the equity to loan ratio, profit margins, and the standard distribution coefficient corresponding to energy output expectations.

Other parameters are the investment rate, foreign loan ratio, and operations and maintenance costs, among others.

Parameters for calculating the average long-term energy output of standard solar and wind power plants, based on data from consultants to ensure universality, are also expected from the draft, along with rules for local and foreign currency interest rates to be set.

The MoIT will also propose how to determine capacity scale for solar and wind power plants eligible for investor selection in light of Power Development Plan VIII.

This circular only applies to new solar and wind projects that have signed power purchase contracts, and does not apply to transitional wind and solar power projects as specified in Circular 15.

According to the provisions of the Law on Electricity, Vietnam Electricity (EVN) will take charge of calculating the pricing structure and submit proposals to the MoIT for approval before November each year.

Source: VIR