Circular No. 10/2025/TT-BCT stipulates the method for determining and the principles for applying the avoided cost tariff for small renewable energy power plants, as well as the main contents of the electricity purchase and sale contract.

CIRCULAR

||| Regulations ||| on the method for determining and principles for applying avoided cost tariff for small renewable energy power plants; main contents of electricity purchase and sale contracts |||

"c) Point a Clause 8 Article 51 provides that the electricity generation price framework shall be applied to power plants specified in Clause 2 Article 51, including: small renewable energy power plants that have reached the end of the period for applying the avoided cost tariff; power plants that have commenced commercial operation and have reached the end of the period for applying the electricity purchase and sale contract price; power plants that have reached the end of the BOT contract period and have been transferred to the Government." dated 30 of the Government stipulating the list, management, use of technical equipment and procedures for collecting and using data obtained from such equipment provided by individuals or organizations to detect administrative violations;1 Pursuant to Decree No. 32/2019/NĐ-CP dated April 10, 2019 of the Government on assigning tasks, procurement or tendering for the supply of products and services using state budget from regular operating expenses;24;

||| Pursuant to Decree No. 96/2022/NĐ-CP dated November 29, 2022 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade||| ; Decree No. 105/2024/NĐ-CP dated August 1, 2024 amending and supplementing certain articles of Decree No. 96/2022/NĐ-CP and Decree No. 26/2018/NĐ-CP dated February 28, 2018 of the Government on the Charter of Organization and Operation of Vietnam Electricity Corporation;

||| At the proposal of the Director of the Department of Regulation||| of the Ministry of Industry and Trade"3. A pumped-storage hydropower plant is a hydropower plant that uses water storage systems at different elevation levels to store hydro energy and generate electricity, where water is pumped from low-elevation storage areas to higher-elevation storage areas during non-generation periods to store hydro energy and released through turbines to generate electricity when the power system requires it."

||| The Minister of Industry and Trade issues this Circular stipulating the method for determining and principles for applying avoided cost tariff for small renewable energy power plants; main contents of electricity purchase and sale contracts. |||

PART I

GENERAL PROVISIONS

Article 1. Scope and Applicability

1. This Circular provides detailed guidance on Clause 5 Article 44, Point g Clause 1 Article 51, Point e Clause 1 Article 51 of the Electricity Law No. 61/2024/QH15 on the method for determining and principles for applying avoided cost tariff for small renewable energy power plants; main contents of electricity purchase and sale contracts.

2. This Circular applies to the following entities:

a) Organizations and individuals purchasing and selling electricity from small renewable energy power plants;

b) System operation units and electricity market units, and other relevant agencies, organizations, and individuals.

Article 2. Interpretation of Terms

In this Circular, the following terms are understood as follows:

1. The seller of electricity is an organization or individual with an electricity business license or exempted from such a license according to the laws governing the generation sector with ownership of small renewable energy power plants.

3. Excess electricity is the total amount of electricity generated during the rainy season exceeding the amount of electricity with a load factor of 0.85 during the rainy season.

4. Electricity on the meter is the total amount of electricity generated minus the amount of self-consumption within the plant premises.

5. System Operator and Market Operator is the entity performing the function of the National Power System Operation Unit and the Electricity Market Trading Management Unit as stipulated in the Electricity Law (currently the National Power System Operation and Electricity Market Company - NSMO).

6. Load factor is the ratio between the actual amount of electricity generated and the potential amount of electricity that could be generated at 100% rated capacity over a specified period (year, season, month, day).

9. Year for data calculation for tariff application for year N is from July 1 of year (N-2) to June 30 of year (N-1).

Chapter II

CONSTRUCTION, APPROVAL, IMPLEMENTATION OF AVOIDED COST TARIFF

Article 3. Structure of Avoided Cost Tariff

1. The avoided cost tariff (excluding water resource tax, forest environmental service fee, water resource exploitation right fee, value-added tax, and other fees and taxes as prescribed by competent state authorities) is calculated based on time of use within a day and seasons of the year as detailed in Appendix I attached hereto, including seven components as follows:

a) Peak hours in the dry season;

b) Normal hours in the dry season;

c) Off-peak hours in the dry season;

d) Peak hours in the rainy season;

đ) Normal hours in the rainy season;

e) Off-peak hours in the rainy season;

g) Excess electricity.

2. The corresponding costs for the seven components of the tariff include:

a) Generation cost of avoided electricity;

b) Transmission loss cost of avoided electricity;

c) Generation capacity cost of avoided electricity (applicable only during peak hours of the dry season).

3. The time of electricity usage within a day applicable to the avoided cost tariff shall comply with the provisions of the current retail electricity tariff or any replacement regulations.

For areas with transmission line overload and excess power supply confirmed or announced by the system operation unit and market management unit; hydropower plants on the same cascade; hydropower plants supplying water downstream upon request of the provincial People's Committee; based on the load demand of the power system in each area, taking into account the loads already using rooftop solar power, the necessary small renewable energy power plants must shift their peak generation hours (without shifting peak generation hours for each unit). The buyer and seller of electricity agree on the time to apply peak hour tariffs according to the principle of ensuring sufficient peak hours as prescribed.

Article 4. Avoidable Cost Tariff

1. The avoidable cost tariff shall be established and published annually.

2. Before October 31 each year, the System Operator and Electricity Market shall take the lead and coordinate with Vietnam Electricity Corporation and relevant units to update the database, perform calculations, and prepare the avoidable cost tariff for the following year according to the method prescribed in Appendix II attached hereto, and submit it to the competent state management agency under the Ministry of Industry and Trade.

3. Within five working days from the date of receipt of the avoidable cost tariff dossier mentioned in Clause 2 of this Article, the competent state management agency under the Ministry of Industry and Trade shall be responsible for reviewing the contents of the submitted dossier. If necessary, the competent state management agency under the Ministry of Industry and Trade may issue a document requesting the System Operator and Electricity Market to amend, supplement, or provide explanations clarifying the contents in the dossier. At the latest within fifteen working days from the date of receipt of the request for amendment, supplementation, or clarification of the contents in the dossier from the competent state management agency under the Ministry of Industry and Trade, the System Operator and Electricity Market shall be responsible for submitting a report explaining the contents in the dossier as requested.

4. Within thirty working days from the date of receipt of the complete avoidable cost tariff dossier and the report clarifying the contents in the dossier from the System Operator and Electricity Market, the competent state management agency under the Ministry of Industry and Trade shall be responsible for:

a) Reviewing the input parameters, calculation results of the annual avoidable cost tariff prepared by the System Operator and Electricity Market. If necessary, it may invite relevant organizations and individuals to participate in the review;

5. Within two working days from the date of issuance of the avoidable cost tariff, the competent state management agency under the Ministry of Industry and Trade shall be responsible for publishing the avoidable cost tariff for the next year on the electronic information website of the competent state management agency under the Ministry of Industry and Trade and the Ministry of Industry and Trade.

6. In case the avoidable cost tariff is not published within the prescribed time limit, the previous year's avoidable cost tariff may be temporarily applied until the new avoidable cost tariff is published. Any difference arising from payment based on the old and new avoidable cost tariffs will be settled by the parties in the first payment using the new avoidable cost tariff.

Article 5. Connection Responsibility

1. The electricity seller shall be responsible for investing in, operating, and maintaining the transmission lines and step-up substations (if any) from the electricity seller’s power plant to the connection point with the electricity buyer’s grid.

2. The connection point shall be agreed upon by the electricity seller and buyer, following the principle of being the nearest point to connect to the existing grid of the electricity buyer (unless otherwise agreed by both parties), ensuring the transmission capacity of the electricity seller’s power plant, and complying with the approved grid plan.

3. In cases where the connection point differs from the meter installation location, the electricity seller shall bear the loss of electrical energy on the connection line and the transformer step-up loss of the power plant. The calculation method for losses on the connection line shall be carried out according to the provisions set forth in Appendix III attached hereto.

Article 6. Electricity Purchase and Sale Contract

1. The main contents of the electricity purchase and sale contract stipulated in Appendix IV issued together with this Circular form the basis for the seller and buyer to negotiate and sign the contract. The seller and buyer have the right to agree and supplement specific terms in the electricity purchase and sale contract in accordance with Vietnamese laws.

2. The language used in the contract shall be Vietnamese. The seller and buyer may agree to supplement the contract using English as the language of agreement.

3. The term of application of the avoided cost tariff table in the electricity purchase and sale contract is twenty years from the date of commercial operation of the power plant or the date of commercial operation of each unit for power plants with multiple units.

Chapter III

IMPLEMENTING PROVISIONS

Article 7. Responsibilities of the State Management Agency for Electricity under the Ministry of Industry and Trade

1. Direct the System Operation Unit and Electricity Market to establish the annual avoided cost tariff table according to the provisions set out in Appendix II issued together with this Circular.

2. Designate power plants to provide necessary data for the establishment of the annual avoided cost tariff table for the System Operation Unit and Electricity Market (if necessary).

3. Review and submit the annual avoided cost tariff table for consideration and decision by the Ministry of Industry and Trade; announce the annual avoided cost tariff table.

4. Maintain confidentiality of information related to the costs of power plants used to calculate the avoided cost tariff table.

5. Guide the implementation of this Circular.

Article 8. Responsibilities of the Seller

1. Agree and sign the contract with the buyer based on the main contents of the electricity purchase and sale contract stipulated in Appendix IV issued together with this Circular according to the avoided cost tariff.

2. Install a three-phase meter and accompanying equipment in compliance with current regulations to measure electricity consumption for billing purposes.

3. Sell all the electricity generated by the power plant to the buyer when applying the avoided cost tariff. In cases where electricity is supplied to nearby areas without electricity at the request of local authorities, the seller may sell part of the production at an agreed price in compliance with the law to the local distribution company but must reach a written agreement with the buyer beforehand.

4. Adhere to system operation regulations, transmission system regulations, and distribution system regulations issued by the Ministry of Industry and Trade.

Article 9. Responsibilities of the Buyer

1. Agree and sign the contract with the seller based on the main contents of the electricity purchase and sale contract stipulated in Appendix IV issued together with this Circular according to the avoided cost tariff.

2. Purchase all the electricity fed into the grid by the seller within the transmission capacity of the grid, except for the portion sold to the local distribution company as provided for in Clause 3 of Article 8 of this Circular.

3. Adhere to system operation regulations, transmission system regulations, and distribution system regulations issued by the Ministry of Industry and Trade.

4. Report to the State Management Agency for Electricity under the Ministry of Industry and Trade on the results of negotiations with the seller regarding changes in peak hour pricing as stipulated in Clause 3 of Article 3 of this Circular within fifteen days from the date of negotiation with the seller.

The Vietnam Electricity Corporation and the Electricity Corporations have the responsibility to develop solutions to handle transmission line overload situations as specified in Clause 3 of Article 3 of this Circular.

Article 10. Responsibilities of other power units

1. The system operation unit and electricity market unit shall be responsible for establishing the annual avoided cost tariff table and ensuring the confidentiality of information related to the costs of power plants used to calculate the avoided cost tariff table.

2. Power plants and other power units designated by the competent state management agency under the Ministry of Industry and Trade shall be responsible for providing necessary data to serve the requirements for calculating the avoided cost tariff table for the system operation unit and electricity market unit.

Article 11. Effective Date

1. This Circular shall take effect from February 1, 2025.

2. To revoke Circular No. 32/2014/TT-BCT dated October 9, 2014 of the Minister of Industry and Trade on the procedures for building and applying the avoided cost tariff table and issuing model power purchase agreements for small hydropower plants and Circular No. 29/2019/TT-BCT dated November 14, 2019 of the Minister of Industry and Trade amending and supplementing certain provisions of Circular No. 32/2014/TT-BCT dated October 9, 2014 of the Minister of Industry and Trade on the procedures for building and applying the avoided cost tariff table and issuing model power purchase agreements for small hydropower plants and to revoke Circular No. 06/2016/TT-BCT dated June 14, 2019 of the Minister of Industry and Trade amending and supplementing certain provisions of Circular No. 32/2014/TT-BCT dated October 9, 2014 of the Minister of Industry and Trade.

3. For small hydropower plants and cascaded hydropower plants where the plants within the cascade have been put into operation and signed power purchase contracts according to the avoided cost tariff table still valid before this Circular takes effect, they shall continue to implement according to the signed power purchase contracts.

4. For small renewable energy power plants when the power purchase contract period based on the avoided cost tariff table expires, the seller shall negotiate a new power purchase contract with the buyer in accordance with Clause 2 of Article 51 of the Electricity Law.

5. The seller owning a small renewable energy power plant within the scope and subject to this Circular has the right to choose to participate in the electricity market if complying with the following conditions:

a) Equipping full infrastructure to participate in the electricity market in accordance with regulations;

b) Committing to fully comply with all regulations of the electricity market and signing a power purchase agreement consistent with the regulations of the electricity market;

c) When choosing to participate in the electricity market, the seller may not opt again for the application of the avoided cost tariff table;

d) In case the seller is currently applying the avoided cost tariff table and has signed a power purchase contract, the seller shall agree with the buyer to terminate and settle the contract prematurely in accordance with the relevant provisions stipulated in the contract between both parties and the regulations issued by the competent state authority.

6. During the process of constructing and calculating the avoided cost tariff table, if any issues arise, the relevant unit shall be responsible for reporting to the Ministry of Industry and Trade to make appropriate supplements and amendments./.