feed in tariff – Duane Morris Vietnam

April 10, 2020April 10, 2020 by Dr. Oliver Massmann

VIETNAM – WIND ENERGY BREAKING NEWS – FEED IN TARIFF COULD BE EXTENDED – WHAT YOU MUST KNOW:

FEED IN TARIFF (“FIT”) scheme for wind power may be extended until the end of 2023 if it is approved by the Prime Minister. On April 09th, 2020, MoIT sent the Government Office the Official Letter no. 2491/BCT-DL to propose to extend FIT scheme for wind power. The proposed content is as follows:

1. Extending FIT scheme for wind power until 31/12/2023.

2. Assigning MoIT to calculate and propose a new FIT price for the projects COD after 01 November 2021 until 31 December 2023.

3. Competitive tender and auction scheme shall be applied after 2023.

The reason for this proposal is the predicted shortage of power for Southern Vietnam from 2021 to 2025 because many thermal projects are behind schedule, thus the need for wind power from 2021 to 2025 is predicted from 6,030 MW to 11,630 MW.

This extended FIT scheme, if approved by the Prime Minister, shall be a lucrative opportunity for investors in the following years.

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Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com or any other lawyer in our office listing if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.
Thank you!

September 7, 2018 by Dr. Oliver Massmann

VIETNAM – RENEWABLE ENERGY – NEW FEED IN TARIFFS FOR WIND ENERGY – AMAZING DEVELOPMENT – SOLAR POWER – SPECIAL POLICY FOR NINH THUAN AND ONGOING DRAFT POLICY

RECENT DEVELOPMENT
Until June 2018, approx. 286 solar power projects of total capacity of 19,300 MW have been submitted to the licensing authorities to be supplement to the Power Master Plans, but only 100 projects have been approved (approx. 4,700 MW). We also note that 90% projects are still in other licensing processes such as application for investment registration license, construction permit, etc.
At least 10 solar power projects that investors have signed PPAs with EVN recently. By end of September 2018, the first solar energy project will connect to the national power grid (35 MW in Hue province).
With regards to the remaining projects have not yet been included in the Power Master Plans, the Deputy PM Trinh Dinh Dung has decided and instructed that MOIT must consider and approve to addition if such solar energy projects satisfy one of the following conditions:
• MOIT has completed the investigation process of the application to supplement to Power Master Plan of such project; or
• Projects have submitted the application to supplement to Power Master Plan to MOIT and such projects are located in provinces that have potential to develop solar energy projects.

SPECIAL POLICY ONLY FOR NINH THUAN – NOT FOR OTHER PROVINCES
On 31 August 2018, the Prime Minister Nguyen Xuan Phuc issued Resolution 115/NQ-CP (“Resolution 115”) to finally decide that the commercial operation date (COD) deadline (previously 30 June 2019) for solar projects in Ninh Thuan province to enjoy the 9.35 US cents feed in tariff has been extended to the end of 2020. This extension applies to those solar energy projects approved in the relevant Power Master Plan. Resolution 115 took effect on 31 August 2018 and lays to rest the badly kept secret that Ninh Thuan, a literal hot spot for solar projects, will enjoy more favorable terms than projects in other locations which remain bound to the 30 June 2019 COD deadline (as noted below).

NEW REGULATIONS FOR SOLAR ENERGY PROJECTS AFTER 30 JUNE 2019?
The Government will issue new FIT and new PPA for projects coming into operation after 30 June 2019. Such new FIT will be much more lower than the current one (verbally confirmed by Mr. Nguyen Ninh Hai, Deputy Director of New and Renewable Energy Department, MOIT).
The Government is now also working on a Competition Auction System for solar power projects that may be completed at around the 2020. The new FIT will be applied only until the Competition Auction System is decided and implemented.

ON GOING DRAFT POLICY ON NEW FIT FOR WIND ENERGY PROJECTS
MOIT has proposed the below a new and very promising FIT for wind energy projects to PM for his consideration and approval:
o FIT for Onshore project: 8.5 cents
o FIT for Offshore project: 9.8 cents
FYI, in current draft available to us, onshore and offshore projects are defined as below:
“Onshore wind power project means on-grid wind power project that having its wind turbines to be built and operated on inland areas and coastal zones (NB: boundary of such inland areas and coastal zones is the average low water line for 18.6 years)
Offshore wind-power project means on-grid wind power project that having its wind turbines to be built and operated outside inland areas and coastal zones to the sea.”

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Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com or any lawyers in our office listing if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

August 1, 2018 by Dr. Oliver Massmann

VIETNAM – SOLAR POWER BREAKING NEWS – EXTENSION PROPOSAL BY MINISTRY OF PLANNING AND INVESTMENT OF DEADLINE FOR FEED IN TARIFF REJECTED – WHAT YOU MUST KNOW

Last June, the whole solar energy industry rocked (and became excited!) with the news that the Deputy Prime Minister, in one of his meetings with the Ministry of Industry and Trade (MOIT) on 20 June 2018, has agreed in principle that the COD extension for solar energy projects under the Decision 11 shall be extended beyond the original deadline of 30 June 2019. According to Vietnam’s political tradition, this development would normally mean the subsequent issuance of official legislation to formalize the decision. One source infomed the market players that the decision for extension would first be issued by end of July for Ninh Thuan projects due to the province’s economic downturn, and by the end of this year, a decision to extend nationwide will follow. On 4 July 2018, the Ministry of Planning and Investment (MPI), in coordination with the MOIT, submitted an official letter No. 4545 (Letter 4545) to the Prime Minister to formally propose the COD extension. That letter 4545 was addressing Ninh Thuan solar energy projects only but market players expected that proposal for nationwide extension would follow very soon.
However, in a rare and unpredictable move, on 26 July 2018, the Government’s Office issued an Official Letter No. 7108 (Letter 7108) to reject the proposal for COD extension for Ninh Thuan solar energy projects, without mentioning any rationale behind it or any reference to the Deputy Prime Minister’s in-principle agreement with the MOIT. That means, as a result of Letter 7108, everything under Decision 11 would stay the same, at least for Ninh Thuan solar energy projects.
What remains unclear is whether the MOIT/MPI would continue pushing for a nationwide COD extension, amidst the Letter 7108. One source continues insisting that such a nationwide COD extension (which was planned to go through by end of 2018) is still reviewed by the Prime Minister. From the IPP’s perspectives, it is understandably viewed as a 50/50 decision. A high-yielder would continue go for bigger projects with hope that nationwide COD extension will take place, while others may choose to go with smaller one to ensure the construction time to be secured.
We will keep our clients updated on the development of this saga. Time is of essence now yet everything is still up in the air. For prudent reasons, we would have to advise IPPs to go with smaller projects now for the purpose of plausible construction time. We can help introducing such projects.
Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com or any lawyers in our office listing if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

June 29, 2018 by Dr. Oliver Massmann

Vietnam – Solar Power Breaking News – Possible Extension of deadline for Feed in Tariff (9.35 USD cent per KW) – what you must know:

The current solar Feed-in-Tariff for on-grid projects in Vietnam is 2,086 Vietnamese dong/kWh (equivalent to 9.35 UScents/kWh) (VAT excluded). According to Decision 11/2017/QD-TTg, this solar FIT applies for projects which come into operation before 30 June 2019 and within 20 years from the commercially operational date (“COD”) (i.e., the date when the solar plant is ready to sell electricity to the buyer – EVN).

However, from our informal high level contact within the MOIT recently, it is very likely that the solar FIT of US9.35 cents/kWh will continue to apply beyond the original COD (i.e. 30 June 2019). The deadline shall be likely extended for another half a year or another year for solar projects across Vietnam, except for projects in Ninh Thuan. This policy is not yet formally adopted but very likely will be publicized at the end of this year.

For solar projects in Ninh Thuan, the COD deadline extension will be longer (i.e. for another one and a half year from 30 June 2019). This is due to the fact that, in Ninh Thuan province, nuclear energy development has been stopped and the Government would like to develop solar energy there to support the province’s economic development.The special policy for solar projects in Ninh Thuan will be coming very soon, according to our MOIT contact. He informed us that the Deputy Prime Minister has already approved this special policy for Ninh Thuan and all await formal procedures.

We will closely monitor to update on any further changes.

Please contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have questions on the topic or any other lawyer in our office listing. Dr. Oliver Massmann is the General Director of Duane Morris LLC.