On 28 October 2020, the Ministry of Industry and Trade (MOIT) issued Official Letter No.8159/BCT-DL to collect comments from other Ministries and relevant agencies on solutions for difficulties in wind energy project development. The comments were combined into a Draft report for the Prime Minister’s review and approval.
A notable provision of the Draft report is for wind power projects that have been supplemented into the power development planning and do not meet the COD deadline for current wind FiT rate of November 2021, the new applicable FiT rate shall be:
No. Category FiT rate for onshore projects (Uscent/kWh) FiT rate for offshore projects (Uscent/kWh)
1 Projects reaching COD from November 2021 to December 2022 7,02 8,47
2 Projects reaching COD in 2023 6,81 8,21
In addition, the Draft report also proposes to extend the current FiT rate deadline to 31 December 2023, instead of November 2021.
As stated in our previous articles on FiT rate for wind power projects, the need to extend the deadline for current FiT rate is essential because the projects waiting to be included in the Revised PDP VIII is unlikely to have commercial operation date before November 2021, because:
• The supplement into PDP for new wind power sources was suspended for more than 1 year (from October 2018) because there were no guidelines to implement the Planning Law;
• The construction of wind power projects takes more time than that of solar power projects. For feasibility study reports, investors must carry out wind measurement for at least 12 months. Moreover, wind turbines are mostly imported from abroad, which costs investors extra time, especially when there is unexpected delay of equipment delivery (e.g. due to Covid-19).
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Please do not hesitate to contact the author Dr. Oliver Massmann under omassmann@duanemorris.com. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC, Member to the Supervisory Board of PetroVietnam Insurance JSC and the only foreign lawyer presenting in Vietnamese language to members of the NATIONAL ASSEMBLY OF VIETNAM.