On November 1, 2023, the Ministry of Industry and Trade issued Circular No. 19/2023/TT-BCT stipulating the method of building a power generation price frame applicable to solar power plants and wind power plants, laying the foundation for climate reality FiT (Feed-in Tariff) for solar and wind power projects.
Scope of regulation and applicable subjects
Circular 19 regulates the method of building the annual electricity generation price frame for ground-mounted solar power plants, floating solar power plants, inland wind power plants, offshore wind power plants, and wind power plants offshore and the procedure for building and promulgating the annual electricity generation price framework.
Regarding subjects of application, Circular 19 applies to ground-based solar power plants, floating solar power plants and inland power plants, offshore wind power plants, and offshore wind power plants. Circular 19 does not apply to transitional power plants and solar and wind power plants operating under PPAs with Vietnam Electricity Group that have FiTs in effect.
Principles for building electricity generation price framework
In Article 3 of the Circular, there are 05 principles that need to be followed when building the electricity generation price frame. Specifically as follows:
Firstly, the power generation price range of ground-mounted solar power plants, floating solar power plants, inland wind power plants, offshore wind power plants, and offshore wind power plants is a range of values from the price Minimum value (0 VND/kWh) to maximum value is developed and issued annually.
Second, the maximum value applicable to a solar power plant is the electricity generation price of a standard solar power plant determined according to the following methods: Method for determining the electricity generation price of a standard solar power plant; Method to build the average fixed price of a standard solar power plant; Method for establishing fixed operating and maintenance prices of standard solar power plants.
Third, the maximum value applicable to wind power plants is the electricity generation price of a standard wind power plant determined according to the following methods: Method for determining the electricity generation price of a standard wind power plant; Method to build the average fixed price of a standard wind power plant; Method for establishing fixed operating and maintenance prices of standard wind power plants.
Fourth, the electricity generation price frame for ground-mounted solar power plants and floating solar power plants should be based on the average annual radiation intensity of the three regions North, Central and South.
Fifth, select a standard solar power plant to build a power generation price frame according to the North, Central and South regions.
In general, Circular 19/2023/TT-BCT has provided detailed and comprehensive methods to determine the range of tariffs for solar and wind power plants. These methods serve as a guiding financial framework for stakeholders involved in the renewable energy sector. Every year, based on the formula specified in the Circular, the Ministry of Industry and Trade will determine and issue ceiling levels for each type of technology. In general, the method used for solar and wind power plants of the same model is the standard power plant's electricity generation cost, which is calculated based on the formula stated in the Circular to establish the Ceiling Price Schedule. Basically, the Ceiling Price is determined by the total fixed costs and operating and maintenance costs of a Standard Power Plant.
Read more >> Overcoming Challenges for Offshore Wind Power Development in Vietnam
