This Circular stipulates the method for determining the price of power generation services, principles for calculating electricity prices to implement power projects, and the main contents of power purchase and sale contracts. It applies to new power plants and those already in commercial operation within the territory of Vietnam, excluding certain special types of power plants. This Circular takes effect from February 1, 2025.
적용 범위
Power plants operating within the territory of Vietnam connected to the national power grid; relevant agencies, organizations, and individuals.
핵심 사항
- New power plants → the price of power purchase and sale contracts is determined based on reasonable costs and an internal rate of return not exceeding 12%.
- The base price of power generation service PC = FC + FOMCb, where FC is the average fixed price, and FOMCb is the fixed operation and maintenance price.
- The variable price PBĐ of thermal power plants is determined based on the cost of primary fuel, secondary fuel, and transportation.
- Power plants already in commercial operation → the price of power generation service applied for subsequent years until the end of their economic life remains unchanged compared to the agreed price.
- The contract price at the time of payment PC,j,t = FCj + PBĐj,t, where FCj is the fixed price in year j, and PBĐj,t is the variable price in month t, year j.
🌐 이 문서의 사회적 영향
- Positive impact: Ensuring transparency and fairness in determining the price of power generation services, increasing the efficiency of state management in the power sector.
- Negative impact: May impose financial burdens on new power plants due to complex negotiation processes; affecting the profits of power plants already in commercial operation.
❓ 자주 묻는 질문
How is the price of power generation service determined?
The contract price is determined based on reasonable costs, an internal rate of return not exceeding 12%, and is established according to the method prescribed in Article 4 of this Circular.
Which power plants apply the price of power generation service?
Applies to new power plants and those already in commercial operation within the territory of Vietnam, excluding certain special types of power plants.
How is the variable price of thermal power plants calculated?
Variable price PBĐ = Component of variable price based on primary fuel cost + Component of variable price based on secondary fuel cost + Other component of variable price + Transportation cost of primary fuel.
What is the duration of the power purchase and sale contract for power plants that have reached the end of their economic life?
Determined by mutual agreement between the seller and buyer of electricity based on the major equipment overhaul cycle.
Does the price of power generation service change annually?
Annual fixed price is implemented according to the provisions of Article 16 of this Circular; no adjustment of annual fixed price for previous years before the date when the seller and buyer sign an amendment or supplementary contract for the power purchase and sale contract.
전문
CIRCULAR
Method for determining the price of power generation services; principles for calculating electricity prices to implement power projects; main contents of power purchase and sale contractscarrying out, if
Main contents of power purchase and sale contracts
Pursuant to the Electricity Law dated November 30, 2024;
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-CPdated August 1, 2024 amending and supplementing certain articles of Decree No.96/2022/NĐ-CP and Decree No. 26/2018/NĐ-CPdated 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 Electricity Regulatory Authority;
The Minister of Industry and Trade issues this Circular prescribing the method for determining the price of power generation services; principles for calculating electricity prices to implement power projects; main contents of power purchase and sale contracts.
PART I
GENERAL PROVISIONS
Article 1. Scope of Regulation and Applicability
1. This Circular provides detailed guidance on Clause 3 Article 12, Clause 5 Article 44, Point g Clause 1 Article 51 of the Law on Electricity No. 61/2024/QH15 regarding the method for determining the price of power generation services; principles for calculating electricity prices to implement power projects; main contents of power purchase and sale contracts.
2. This Circular applies to the following entities:
a) Power plants operating within the territory of the Socialist Republic of Vietnam connected to the national power grid;
b) Other relevant agencies, organizations, and individuals.
3. The contents regarding the method for determining the price of power generation services; principles for calculating electricity prices to implement power projects; main contents of power purchase and sale contracts prescribed in this Circular shall not apply to the following entities: strategic multi-purpose hydropower plants, small renewable energy plants applying the avoided cost tariff mechanism, independent power plants invested under the Build-Operate-Transfer (BOT) model, power plants and units providing ancillary services; power plants applying the purchase price mechanism as stipulated in relevant documents of competent authorities.
Article 2. Interpretation of Terms
In this Circular, the following terms shall be understood as follows:
1. The seller of electricity is the power generation unit owning the power plant.
2. The buyer of electricity These include Vietnam Electricity Corporation (or its representative units according to delegated authority), Northern Power Corporation, Central Power Corporation, Southern Power Corporation, Hanoi Power Corporation, Ho Chi Minh City Power Corporation, other bulk power purchasing units as regulated by the competitive electricity market.
3. Project sponsors is the entity, organization, or individual that owns capital, borrows capital, or is directly assigned to manage and use capital for implementing power project activities.
4. Electric energy delivery and receipt is the entire electric energy delivered by the seller to the buyer.
5. Power Generation Unit is the power unit owning one or more power plants.
6. System Operator and Market Operator is the State-owned Joint Stock Company for National Power System Operation and Electricity Market or another name depending on the level of competitive electricity market development.
7. Fuel purchase and sale contract These are agreements between power generation units and fuel trading units to supply fuel to power plants, signed in accordance with relevant laws, ensuring legitimate fuel sources, competitive and transparent pricing.
8. Fuel storage, regasification, and distribution contract These are agreements between power generation units or fuel trading units and liquefied natural gas storage, regasification, and distribution units to store, regasify, and supply natural gas fuel to power plants, signed in accordance with relevant laws, ensuring competitive and transparent pricing.
9. Fuel transportation contract These are agreements between power generation units or fuel trading units and fuel transportation units to transport fuel to power plants, signed in accordance with relevant laws, ensuring competitive and transparent pricing.
10. Base year is the total approved investment amount used to calculate the power generation service price.
11. New power plant is a newly constructed power plant or an expanded part of a power plant that has not yet signed its first power purchase agreement.
12. Net Heat Rate is the amount of heat consumed to produce one kWh of electric energy at the point of electric energy delivery (BTU/kWh or kJ/kWh or kCal/kWh).
13. Total investment cost is the total construction investment cost of the project determined according to relevant laws, consistent with the basic design and other contents of the feasibility study report for construction investment.
14. Adjusted total investment amount is the total investment amount adjusted according to the effective construction-related laws at the time of negotiating the power generation service price.
15. Final investment cost All lawful costs incurred during the investment process to put the project into operation. Lawful costs are those carried out within the scope of the project, design, and approved budget estimate; construction contracts signed in compliance with the law; including adjustments and supplements approved according to regulations and within the authorized limits. The final investment cost must be within the total investment ceiling approved (or adjusted) according to the law.
Chapter II
METHOD FOR DETERMINING THE PRICE OF POWER GENERATION SERVICES, PRINCIPLES
FOR CALCULATING ELECTRICITY PRICES TO IMPLEMENT POWER PROJECTS
Section 1
METHOD FOR DETERMINING THE PRICE OF POWER GENERATION SERVICES
FOR NEW POWER PLANTS
Article 3. Principles for Determining the Price of Generation Services
1. The price of power purchase and sale contracts for power plants shall be established based on:
a) Reasonable and legitimate costs of the project sponsor throughout the economic life of the project;
b) An internal rate of return (IRR) not exceeding 12%.
2. The price of power purchase and sale contracts is agreed upon by the seller and buyer of electricity and is established according to the method prescribed in Article 4 of this Circular.
3. The price of power purchase and sale contracts does not include value-added tax, water resource tax, water resource exploitation rights fee, forest environmental service fee, solid waste environmental protection fee, and industrial wastewater discharge fee (applicable to thermal power plants) and other taxes, fees, and monetary revenues as stipulated by competent state management agencies (excluding taxes and fees already included in the power generation service pricing scheme).
4. The price of power purchase and sale contracts shall be compared with the base year generation price framework:
a) The base year contract price for power purchase and sale shall not exceed the power generation price range issued by the Minister of Industry and Trade at the base year, where the contract price for power purchase and sale of the power plant is compared with the power generation price range based on corresponding cost components calculated for the power generation price range.
b) In cases where there is no power generation price range in the base year, the contract price for power purchase and sale is calculated by converting corresponding cost components to compare with the nearest power generation price range after the base year for that type of power plant.
Article 4. Method for Determining the Base Year Price of Power Purchase and Sale Contracts for Power Plants
The base year price of power purchase and sale contracts PC (VND/kWh) is determined according to the following formula:
"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:C x TCollege Degree + PBD
1. PCollege Degree (VND/kWh) is the fixed base year price, determined according to the following formula:
College Degree = FC + FOMCThe Standing Office of the Council for International Cooperation on Non-Governmental Organizations (Vietnam Friendship Association) is the agency responsible for receiving registration dossiers, leading, and coordinating with member agencies of the Council to examine dossiers and return results of reviews of registration dossiers of foreign non-governmental organizations in Vietnam.
Where:
FC: Average fixed price determined in accordance with Article 5 of this Circular (VND/kWh);
FOMCThe Standing Office of the Council for International Cooperation on Non-Governmental Organizations (Vietnam Friendship Association) is the agency responsible for receiving registration dossiers, leading, and coordinating with member agencies of the Council to examine dossiers and return results of reviews of registration dossiers of foreign non-governmental organizations in Vietnam.: Base year fixed operation and maintenance price determined in accordance with Article 6 of this Circular (VND/kWh).
2. PBD (VND/kWh) is the variable base year price, determined as follows:
a) For thermal power plants, PBĐ is determined according to the following formula:
Where:
: Adjustable cost component reflecting changes in the primary fuel cost of the power plant in the base year, determined according to the method prescribed in Clause 1 Article 7 of this Circular (VND/kWh);
: Adjustable cost component reflecting changes in the secondary fuel cost of the power plant in the base year, determined according to the method prescribed in Clause 2 Article 7 of this Circular (VND/kWh);
: Adjustable cost component reflecting other changes in the power plant in the base year, determined according to the method prescribed in Clause 3 Article 7 of this Circular (VND/kWh);
: Base year primary fuel transportation cost for power generation, determined according to the method prescribed in Clause 4 Article 7 of this Circular (VND/kWh).
b) For hydropower plants, solar power plants, and wind power plants: PBD equals 0 (zero).
3. Testing, trial run, and acceptance costs of the power plant: Payment for testing, trial run, and acceptance costs incurred before the commercial operation date shall be agreed upon by the seller and buyer of electricity to ensure they are not duplicated in the approved total project investment ceiling.
Article 5. Method for Determining the Average Fixed Price of Power Plants
1. The average fixed price of the power plant (FC) is determined based on financial analysis of the project according to Form 1 and Form 2 prescribed in Appendix II attached to this Circular. Input parameters for establishing the average fixed price of the power plant (FC) are determined in accordance with Clause 2 of this Article.
2. Main input parameters used in calculating the average fixed price of power plants (FC):
a) Investment costs: Investment costs are determined based on the total investment amount (or adjusted total investment amount) that is effective at the time of negotiating the power generation service price or the final investment cost for power plants negotiated in accordance with Article 15 of this Circular, which is used to calculate the power generation service price, including all investment costs under the responsibility of the electricity seller up to the point of interconnection of the power plant, comprising items such as: power plant; infrastructure and port facilities for the power plant, electricity storage system (if applicable for renewable energy plants), grid investment costs from the power plant to the point of interconnection, related costs, and costs allocated to the project (if any);
b) Economic life: Determined according to the provisions in Appendix I issued together with this Circular, except where there is a document from a competent state agency approving a different economic life for the project than that specified in this Circular, in which case it shall be applied according to that document (years);
c) Average annual power generation at the point of delivery (AGN) is calculated as follows:
Where:
ANM: The power generation output at the outlet of the power plant (excluding the electricity storage system) based on the effective basic design at the time of negotiation (kWh).
For thermal power plants specifically, ANM is calculated using the following formula:
ANM x Torganize credit institutions, foreign bank branches are responsible for organizing the implementation of this Circular. x (1 - kcs)max
"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:organize credit institutions, foreign bank branches are responsible for organizing the implementation of this Circular. : Rated capacity of the generator at approved design (kW);
d.1. Amount of taxable income in Vietnam:max : The average annual operating hours at maximum capacity of the power plant, applied according to the document from a competent state agency if there is a document from a competent state agency approving Tmax, or according to the provisions in Appendix I issued together with this Circular. For power plants not specified Tmax in Appendix I issued together with this Circular, this parameter is agreed upon between the electricity seller and buyer based on the approved basic design or technical documentation of the equipment manufacturer at the time of negotiation (if available) but not exceeding the value in the approved basic design (%) or applying according to the document from a competent authority (if available);
organize credit institutions, foreign bank branches are responsible for organizing the implementation of this Circular.td : The ratio of self-consumption and loss of the step-up transformer of the power plant, transmission line losses to the point of delivery with the national power grid (if any), agreed upon and determined by the electricity seller and buyer based on the approved basic design or technical documentation of the equipment manufacturer at the time of negotiation (if available);
kCS : The average reduction factor of capacity over the entire economic life of the thermal power plant (if any), agreed upon and determined by the electricity seller and buyer based on the approved basic design or technical documentation of the equipment manufacturer at the time of negotiation (if available).
In cases where AGN cannot be determined according to the above formula, the electricity seller and buyer determine it based on the effective basic design or technical design converted to the point of delivery at the time of negotiation (for wind power plants, both parties agree to determine the output based on the expected level P50). If it cannot be determined according to the technical design or approved basic design, it is determined according to the document from a competent state agency. If it cannot be determined according to the document from a competent state agency, AGN is agreed upon by the electricity seller and buyer.
d) Depreciation period for each main fixed asset group (years): Determined based on the depreciation period for each main fixed asset group according to the depreciation framework prescribed by relevant laws during each period or according to the document from a competent state agency allowing different depreciation periods (if any);
đ) Equity capital ratio, debt capital ratio, and phased investment capital in the total investment amount are determined according to the decision approving the investment project, the actual capital mobilization for the project at the time of negotiation, in compliance with regulations issued by a competent state agency. The minimum equity capital ratio is 15% of the total investment amount of the project;
e) The interest rate on borrowed capital and the repayment period during the operation period shall be determined based on the loan agreement, and relevant documents and materials between the investor and financial institutions, banks providing loans.
In cases where the total loan amount in loan contracts or legal documents between the project owner and financial institutions is lower than the loan amount in the calculation method for electricity prices, the shortfall in loan capital is agreed upon by the electricity seller and buyer based on the principle: the minimum loan repayment period is 10 years and the interest rate on borrowed capital is as follows:
e1) The interest rate on foreign currency loans is determined by adding 3% per annum to the average SOFR (Secured Overnight Financing Rate) for a term of 180 days (180 Days - Average) of the 36 consecutive months starting from the first day of March, June, September, or December of the negotiation year, published by the Federal Reserve (Website: www.newyorkfed.org);
e2) The interest rate on domestic currency loans is determined by adding 3% per annum to the average interest rate on VND deposits for a term of 12 months paid after maturity for individual customers of the four commercial banks (Vietnam Joint Stock Commercial Bank for Foreign Trade, Vietnam Joint Stock Commercial Bank for Industry and Trade, Vietnam Joint Stock Commercial Bank for Investment and Development, Agricultural Bank of Vietnam or their legitimate successors) for the 60 consecutive months prior to the first day of March, June, September, or December of the negotiation year;
g) Corporate income tax rates, other taxes, and fees: Shall be determined in accordance with relevant laws and regulations.
Article 6. Method for Determining Operating and Maintenance Costs of Power Plants
FOMC Base Year Operating and Maintenance Cost PriceThe Standing Office of the Council for International Cooperation on Non-Governmental Organizations (Vietnam Friendship Association) is the agency responsible for receiving registration dossiers, leading, and coordinating with member agencies of the Council to examine dossiers and return results of reviews of registration dossiers of foreign non-governmental organizations in Vietnam. (VND/kWh) is determined according to the following formula:
Where:
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Operating and maintenance costs based on major repair costs and other costs in the base year, are determined according to Clause 1 of this Article (VND/kWh); |
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Operating and maintenance cost price based on labor costs in the base year, as stipulated in Clause 2 of this Article (VND/kWh). |
1. Operating and maintenance cost price based on major repair costs and other expenses in the base year (VND/kWh) is determined according to the following formula:
(tonnes CO
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Applying the method to calculate total major repair costs and other costs TCscl in the base year according to the following formula: Economic life of the power plant as specified in the Appendix attached to this Circular (years).scl =VĐTXD+TB x ksclĐMTcdk |
Where:
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VĐTXD+TB: |
Total construction costs and equipment costs are determined based on the total investment amount stipulated in Point a, Clause 2, Article 5 of this Circular (VND); |
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kscl : |
The ratio of major repair costs and other costs (%) of the power plant is agreed upon by the electricity seller and buyer but does not exceed the provisions in Appendix I issued together with this Circular. For power plants not specified kscl in Appendix I issued together with this Circular, it will be agreed upon by the electricity seller and buyer; |
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Ccdk : |
The cost of dredging channels to the port, infrastructure fees, and other related costs shall be agreed upon between the seller and buyer of electricity (VND), if applicable. In cases where there is no data to calculate these costs for the base year, the seller and buyer of electricity shall agree on the total value of these costs at the time of negotiation and adjust them to the base year according to a rate of 2.5% per year (VND); |
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AGN : |
The average annual power generation at the point of electricity delivery between the seller and buyer of electricity (kWh) shall be determined in accordance with Point c, Clause 2, Article 5 of this Circular. |
2. Operating and maintenance costs based on the base year labor costs (VND/kWh) is determined according to the following formula:
Where:
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Economic life of the power plant as specified in the Appendix attached to this Circular (years).nc: |
Total labor costs in the base year include salary costs, social insurance costs, health insurance costs, unemployment insurance costs, trade union fees, and accompanying allowances (VND); Total labor costs TCnc base year shall be determined based on the total labor costs of the plant and converted to the base year as follows: In cases where the wage level applied to calculate labor costs of the power plant is equal to the regional minimum wage in the year of electricity price calculation: The conversion ratio to the base year shall be determined based on the regional minimum wage; In cases where the total labor costs cannot be determined according to the above case, the method of calculating total labor costs TCnc base year according to the following formula: Economic life of the power plant as specified in the Appendix attached to this Circular (years).nc =VĐTXD+TB x knc Where:
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Article 7. Method for determining the variable price of thermal power plants
The variable price of thermal power plants at the base year PBD (VND/kWh) shall be determined according to the following formula:
Where:
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The component of the variable price adjusted according to the fluctuation of the main fuel cost of the power plant at the base year, determined according to the method prescribed in Clause 1 of this Article (VND/kWh); |
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The component of the variable price adjusted according to the fluctuation of the auxiliary fuel cost of the power plant at the base year, determined according to the method prescribed in Clause 2 of this Article (VND/kWh); |
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The component of the variable price adjusted according to other fluctuations of the power plant at the base year, determined according to the method prescribed in Clause 3 of this Article (VND/kWh); |
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The transportation cost of the main fuel for power generation at the base year, determined according to the method prescribed in Clause 4 of this Article (VND/kWh). |
1. Variable price component adjusted according to fluctuations in the main fuel costs of the power plant in the base year, shall be determined according to the following formula:
Where:
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The average specific heat consumption of the power plant using the main fuel shall be agreed upon by the seller and buyer of electricity and shall not exceed the design capacity/design technical specifications corresponding to the investment amount used to calculate the electricity price or the equipment manufacturer's parameters, calculated in accordance with the load level specified in Appendix I issued together with this Circular (kcal/kWh or kJ/kWh or BTU/kWh or kg/kWh); |
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The main fuel price in the base year shall be calculated as the weighted average of the fuel purchase contracts or agreements (excluding VAT) (VND/kcal or VND/kJ or VND/BTU or VND/kg). |
2. Variable price component adjusted according to fluctuations in the auxiliary fuel costs of the power plant in the base yearshall be determined according to the following formula:
Where:
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The average specific fuel consumption of the power plant using auxiliary fuel agreed upon by the electricity seller and buyer (kg/kWh or kcal/kWh or kJ/kWh or BTU/kWh); |
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The auxiliary fuel price in the base year shall be the weighted average of the fuel purchase contracts or agreements (excluding VAT) (VND/kg or VND/kcal or VND/kJ or VND/BTU). |
3. Variable price component adjusted according to other fluctuations of the power plant in the base yearare determined according to the following formula:
Where:
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Cvlp: |
The total annual auxiliary material costs of the power plant shall be determined based on the quantity and unit prices of various auxiliary materials used for power generation in the base year (VND). In cases where there is no data to calculate the total annual auxiliary material costs in the base year, it is permissible to use these cost components at times when sufficient data is available and adjust them to the base year according to a rate of 2.5% per year; |
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Ckd: |
The start-up costs include fuel costs and other start-up costs (VND); the number of start-ups allowed shall be agreed upon by the seller and buyer of electricity based on the system's needs and the operational characteristics of the power plant. In cases where there is no data to calculate the total start-up costs in the base year, it is permissible to determine the total value of these costs at the time of negotiation and adjust them to the base year according to a rate of 2.5% per year; |
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Ck: |
Annual maintenance and repair costs include regular maintenance and repair costs calculated based on the total construction investment and equipment of the power plant, the regular maintenance cost ratio shall be agreed upon by the seller and buyer of electricity but shall not exceed the provisions set out in Appendix I issued together with this Circular; For power plants not specified in Appendix I issued together with this Circular, the seller and buyer of electricity shall agree upon it; |
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AGN: |
The average annual power generation at the point of electricity delivery between the seller and buyer of electricity shall be calculated in accordance with Point c, Clause 2, Article 5 of this Circular (kWh). |
4. Main fuel transportation costs of the power plant in the base year shall be determined according to the following formula:
Where:
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The average specific heat consumption of the power plant is determined according to the provisions of Clause 1 of this Article; |
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The main fuel transportation cost for power generation at the base year (excluding VAT) (VND/kcal or VND/kJ or VND/BTU or VND/kg) and is determined as follows: For coal-fired thermal power plants: the weighted average of coal transportation contracts or agreements; For natural gas-fired thermal power plants: the weighted average of pipeline gas transportation service prices approved by competent authorities in accordance with the Price Law and other relevant laws; For liquefied natural gas (LNG)-fired thermal power plants: the weighted average of LNG storage, regasification, transportation, and distribution service prices approved by competent authorities in accordance with the Price Law and other relevant laws; For waste-to-energy, biomass, and new energy power plants: agreed upon by the electricity seller and buyer based on the actual conditions of the power plant; For thermal power plants using a combination of multiple fuels: agreed upon by the electricity seller and buyer based on the actual conditions of the power plant; For fuel purchase contracts where the main fuel price |
Article 8. Power plants without regulations on methods for determining the price of power generation services
In cases where the power plant has not yet established a method for determining the power generation service price or a pricing framework, the buyer and seller of electricity shall agree on the establishment of a suitable method for determining the power generation service price that fits the actual conditions of the power plant, report to the Ministry of Industry and Trade for review and guidance.
Article 9. Temporary Price
In cases where the parties cannot agree on the contract price for electricity purchase and sale, both the seller and buyer of electricity may agree on a temporary price to apply until they reach an agreement on the formal price.
Article 10. Method for determining the price of power generation services for solar and wind power plants that have signed power purchase agreements with Vietnam Electricity but do not fully meet the conditions for applying electricity prices as stipulated in Prime Minister's Decisions.
The method for determining the price of power generation services for solar and wind power plants that have signed power purchase agreements with Vietnam Electricity but do not meet the conditions for applying electricity purchase prices as specified in Prime Minister's Decisions No. 11/2017/QĐ-TTg dated April 11, 2017, Decision No. 13/2020/QĐ-TTg dated April 6, 2020, Decision No. 37/2011/QĐ-TTg dated June 26, 2011, and Decision No. 39/2018/QĐ-TTg dated September 10, 2018 is as follows:
1. The seller and buyer of electricity shall base their determination of the price of power generation services on the principles set forth in this Circular and develop a pricing plan for the power generation services of the power plant:
a) The basis year for negotiating the price of power generation services is the commercial operation year of the power plant;
b) For parts of the power plant without a determined price for power generation services, the price of power generation services shall be determined based on the input parameters of the entire power plant.
2. Annual average power delivery volume shall be determined as follows:
a) Based on the basic design (or technical design if the basic design cannot be determined) reviewed by the competent state agency (for wind power plants where both parties agree to determine production based on the expected level P50).
b) In cases where it cannot be determined according to the provisions of point a of this clause, the seller and buyer of electricity shall reach an agreement based on technical parameters in the basic design or technical design documents used in the notification of the review results by the competent state agency. If annual power delivery volume is determined based on the basic design, the total investment cost according to the basic design shall be used; if annual power delivery volume is determined based on the technical design, the corresponding total investment cost according to the technical design shall be used.
3. Operating and Maintenance Costs of the Basis Year of the Power Plant FOMCThe Standing Office of the Council for International Cooperation on Non-Governmental Organizations (Vietnam Friendship Association) is the agency responsible for receiving registration dossiers, leading, and coordinating with member agencies of the Council to examine dossiers and return results of reviews of registration dossiers of foreign non-governmental organizations in Vietnam. shall be determined as follows:
Where:
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TC: |
The operating and maintenance costs of the power plant shall be determined according to the following formula: TC = VĐT x k |
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Where: |
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VĐT: |
Investment cost of the power plant (in dong); |
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c) Selling bonds above or below face value: |
The percentage of operating and maintenance costs of the power plant shall be agreed upon by the seller and buyer of electricity but shall not exceed the provisions set out in Appendix I issued together with this Circular. |
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4. Other parameters for calculating the price of power generation services, methods for determining the contract price of power purchase, and principles for determining the fixed annual price of the power purchase contract shall be agreed upon by the seller and buyer of electricity based on the provisions of Chapter II of this Circular.
5. Documents for negotiating power purchase contracts shall be carried out in accordance with Clause 1, Article 19 of this Circular.
Article 11. Principles for Determining the Sale Price of Electricity in Tender Selection of Power Project Investors
In cases where organizations conduct bidding to select investors for power projects as stipulated in Clause 1, Article 19 of the Electricity Law, the electricity price in the tender documents shall be established according to the principles set out in Chapter II of this Circular. The set of data for calculating the proposed electricity price shall be based on the tender documents and consulting units.
Section 2
METHOD FOR DETERMINING THE PRICE OF POWER GENERATION SERVICES OF
OPERATING POWER PLANTS
Article 12. Method for Determining the Price of Generation Services for Power Plants Where the Power Purchase Contract Has Expired but the Economic Life of the Plant Has Not Ended
For power plants (which have conducted negotiations and signed power purchase agreements in accordance with Circulars No. 41/2010/TT-BCT, No. 56/2014/TT-BCT, No. 57/2020/TT-BCT, and No. 07/2024/TT-BCT), where the power purchase contract has expired but the power plant has not yet reached its economic life, the seller and buyer of electricity shall agree on the price of power generation services applicable for subsequent years until the end of the economic life, ensuring that the average fixed price does not change from the previously agreed price.
Article 13. Method for Determining the Price of Generation Services for Power Plants That Have Reached the End of Their Economic Life
1. The fixed price of a power plant that has reached the end of its economic life shall be determined based on the principle of ensuring that the power plant recovers all costs related to power production and business activities. The pricing period shall be agreed upon by both parties or follow the major equipment overhaul cycle and reasonable profit levels. In cases where there is a document from a competent state agency approving the pricing period, such document shall be applied.
2. The variable price of a thermal power plant that has reached the end of its economic life shall be determined based on the provisions of Article 7 of this Circular, taking into account factors consistent with actual operation.
3. Average generation capacity shall be determined based on the approved power plant capacity and Tmax as specified in Appendix I issued together with this Circular. For power plants without Tmax specified in Appendix I issued together with this Circular, the average power generation shall be determined based on the most recent statistical data of the relevant cycle consistent with the next pricing cycle.
4. In cases where a power plant has reached the end of its economic life and has undergone upgrades, the seller and buyer of electricity shall negotiate and discuss the power purchase contract price of the power plant in accordance with Articles 4, 5, 6, and 7 of this Circular, and in line with the depreciation period of the upgraded main equipment.
5. The term of the power purchase contract for power plants that have reached the end of their economic life shall be agreed upon by the seller and buyer of electricity based on the major equipment overhaul cycle.
Article 14. Method for determining the price of power generation services for power plants with valid power purchase contracts but the price of power generation services has expired or the power plant has completed its BOT contract term and been handed over to the Government or the power plant applies the pricing mechanism stipulated in the competent authority's documents and the power plant has commenced commercial operation but the power purchase contract has expired.
1. The generation service price shall be determined based on the principle of ensuring that the plant recovers all investment costs (if any), production and business costs, and reasonable profit levels.
2. The pricing period for the generation service price shall be based on the remaining economic life of the power plant or the remaining term of the power purchase contract or agreed upon by both parties.
3. The average generation volume is determined based on the approved design capacity of the power plant and Tmax specified in Appendix I issued together with this Circular. For power plants not specifying Tmax as per Appendix I issued together with this Circular, the average electricity volume is determined based on the actual statistical data of the most recent cycle that matches the time period for the next pricing cycle.
4. The fluctuating price of thermal power plants is determined based on the provisions of Article 7 of this Circular, taking into account factors suitable for operational reality.
5. Operation and maintenance costs shall be agreed upon by the seller and buyer of electricity.
6. The investment cost for calculating the price of power generation services is determined based on the residual value of the asset at the time when the price of power generation services expires or the power purchase contract expires, plus any costs for renovation and upgrading (if any).
Article 15. Method for determining the price of power generation services for renegotiated power plants based on final investment cost
For power plants renegotiating the price of power generation services based on the final settled investment capital as stipulated in Clause 1 and Clause 2, Article 27 of this Circular:
1. After determining the final investment cost, the seller of electricity shall be responsible for sending to the buyer of electricity related documents concerning the final investment cost.
2. The seller of electricity and the buyer of electricity shall renegotiate the electricity price according to the following principles:
a) The method for determining the price of the power purchase contract as prescribed in Article 4 of this Circular;
b) The parameters for calculating the price of the power purchase contract as prescribed in Article 4 of this Circular and updated to match the input parameters at the time of determining the final settled investment capital;
c) The contract price for the purchase and sale of electricity must not exceed the power generation price range of the entire power plant's year of commercial operation;
d) The price of power generation services applied from the date of the power plant's commercial operation, fixed annually according to the provisions of Article 16 of this Circular, without adjusting the fixed annual prices of previous years before the seller and buyer sign the amended and supplemented power purchase contract based on the price determined on the basis of the final settled investment capital;
e) The base year for power plants that renegotiate the power generation service price based on the final investment cost is the year of commercial operation of the entire power plant.
Section 3
METHOD FOR DETERMINING THE PRICE OF POWER PURCHASE CONTRACT
YEAR-BY-YEAR IN THE POWER PURCHASE CONTRACT
Article 16. Principles for determining the fixed annual price of the purchase and sale contract
1. The seller and buyer have the right to apply the agreed-upon average fixed price for each year during the contract period. In case the seller and buyer agree to convert the agreed-upon average fixed price into an annual fixed price, the determination of these fixed prices must comply with the principles stipulated in Clause 2 of this Article.
2. Based on the actual borrowing conditions and the project's financial capability, the seller and buyer negotiate the average fixed price of the power plant into an annual fixed price (FC).9. Travel distance is the distance traveled without using mechanical means (cars, motorcycles, motorboats) to reach locations for implementing technical forest management measures and patrolling to protect forests. Year j price) with the condition that the average fixed price does not change compared to the agreed price level and complies with the following principles:
a) The discount rate used to calculate the annual fixed price shall be agreed upon by the seller of electricity and the buyer of electricity and shall be equal to the internal rate of return (IRR) of the power plant;
b) The investor shall fulfill the obligation to repay loans for power plant construction according to the loan repayment period.
Article 17. Principles for adjusting the annual power generation service price in the purchase and sale contract
1. The components of the operating and maintenance costs of the power plant shall be adjusted according to the following principles:
a) The operating and maintenance component price based on major repair costs and other costs is adjusted according to the average cost inflation rate specified in Appendix I issued together with this Circular. The seller and buyer consider negotiating and agreeing on the adjustment mechanism for the operating and maintenance component price based on major repair costs and other costs for items with foreign currency origins;
b) The operating and maintenance component price based on labor costs is adjusted according to changes in the minimum regional wage at the payment time or according to the Consumer Price Index (CPI) published by the Central Statistical Agency but not exceeding 2.5% per year.
2. Annually, based on the total foreign currency loan capital, the plan for repaying foreign currency loans, actual principal repayment figures, the agreed exchange rate for converting the power generation service price scheme, and the actual exchange rate implemented in the preceding year, the seller and buyer calculate and negotiate the settlement plan for exchange rate differences. The exchange rate difference FED (USD) is calculated using the following formula:
Where:
Article 18. Method for Determining the Price of Power Purchase and Sale Contracts of Power Plants at the Time of Payment
The price of power purchase and sale contracts of power plants at the time of payment for electricity month t, year j PC,j,t (VND/kWh) is determined according to the following formula:
Where:
|
|
The fixed price for year j is determined according to the provisions of Article 16 of this Circular (VND/kWh); |
|
|
The operating and maintenance cost price for month t, year j is determined according to the provisions of Clause 1 of this Article (VND/kWh); |
|
|
The fluctuating price for month t, year j is determined according to Clause 2 of this Article (VND/kWh). |
1. The operating and maintenance cost price for month t, year j is determined according to the following formula:
Where:
|
|
The operating and maintenance component price based on major repair costs and other costs for year j is determined according to the provisions of point a of this Clause (VND/kWh); |
|
|
The component of the operating and maintenance cost price based on labor costs for month t, year j is determined according to the provisions of point b of this clause (VND/kWh). |
a) The operating and maintenance component price based on major repair costs and other costsare determined according to the following formula:
Where:
|
|
The operating and maintenance price based on major repair costs and other costs for the base year is determined according to the method prescribed in Clause 1, Article 6 of this Circular; |
|
× (n − n |
The inflation rate of the operating and maintenance component price based on major repair costs and other costs is specified in Appendix I issued together with this Circular; |
|
l: |
The number of payment years counted from the Base Year (for the Base Yearl=1). |
b) The operating and maintenance component price based on labor costs for month t, year j ( 
) determined as follows:
If the wage level calculated in the electricity price scheme equals the minimum regional wage, then the operating and maintenance component price based on labor costs is determined according to the following formula:
Where:
In cases where the total labor costs TCncif calculated based on the ratio of construction and equipment investment capital, the operating and maintenance component price based on labor costs is determined according to the following formula (VND/kWh):
Where:
|
|
The operating and maintenance price based on labor costs for the base year is determined according to the method prescribed in Clause 2, Article 6 of this Circular; |
|
|
The inflation rate of the operating and maintenance component price based on labor costs is determined according to the Consumer Price Index (CPI) ratio of year (j-1) compared to year (j-2) published by the Central Statistical Agency in December of year (j-1) but not exceeding 2.5% per year; |
|
l: |
The number of payment years counted from the Base Year (for the Base Yearl= 1, i1 = 0). |
2. The fluctuating price of the thermal power plant for month t, year j (VND/kWh) is determined according to the following formula:
Where:
|
|
The component of the variable price adjusted for fluctuations in the main fuel costs of power plants for month t, year j, is determined according to point a of this clause (VND/kWh); |
|
|
The component of the variable price adjusted for fluctuations in the auxiliary fuel costs of power plants for month t, year j, is determined according to point b of this clause (VND/kWh); |
|
|
The component of the variable price adjusted for other fluctuations of power plants for year j, is determined according to point c of this clause (VND/kWh); |
|
|
The transportation cost of the main fuel of power plants for month t, year j, is determined according to point d of this clause (VND/kWh). |
a) The fluctuating component price adjusted according to the variation of the main fuel cost of the power plant for month t, year jis determined according to the following formula:
Where:
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|
The average heat consumption rate is determined according to Clause 1, Article 7 of this Circular; |
|
kHR: |
The adjustment factor for average thermal consumption rate based on actual operating conditions according to water cooling temperature, ambient temperature, humidity, and load level agreed upon by the electricity seller and buyer or based on actual conditions for each operational cycle; |
|
kHS: |
The efficiency decline rate for year j (%); |
|
l: |
The order of the year of commercial operation of the plant; |
|
|
The price of primary fuel for power generation at the time of payment for month t, year j, is calculated as the weighted average based on volume from invoices under fuel purchase contracts within the period agreed upon by the electricity seller and buyer; |
b) The variable price component adjusted for changes in secondary fuel costs of the power plant in month t, year j;are determined according to the following formula:
Where:
|
|
The variable price component adjusted for changes in secondary fuel costs of the power plant in the base year is determined in Clause 2, Article 7 of this Circular; |
|
kHS: |
The efficiency decline rate for year j (%); |
|
l: |
The order of the year of commercial operation of the plant; |
|
|
The price of secondary fuel for power generation at the time of payment for month t, year j is calculated as the weighted average based on volume from invoices under fuel purchase contracts within the period agreed upon by the electricity seller and buyer; |
|
|
The price of secondary fuel for power generation in the base year is determined in Clause 2, Article 7 of this Circular; |
c) The variable price component adjusted for other changes in the power plant in year j;are determined according to the following formula:
Where:
|
|
The variable price component adjusted for other changes in the power plant in the base year is determined in Clause 3, Article 7 of this Circular; |
|
× (n − n |
The inflation rate of the variable price component adjusted for other changes is set according to Appendix I issued together with this Circular; |
|
kHS: |
The efficiency decline rate for year j (%); |
|
l: |
The order of commercial operation years of the power plant (counting from the date of commercial operation of the power plant, the first commercial operation year of the power plant is counted from the date of commercial operation of the first unit);l=1); |
|
Granite, gabbro, decorative stone...: |
The order number of payment years counting from the base year (for the base year);Granite, gabbro, decorative stone...=1). |
d) The fuel transportation cost for primary fuel of the power plant in month t, year j;(VND/kWh) is determined according to the following formula:
Where:
|
|
The average heat consumption rate is determined according to Clause 1, Article 7 of this Circular; |
|
kHR: |
The adjustment factor for average thermal consumption rate based on actual operating conditions according to water cooling temperature, ambient temperature, humidity, and load level agreed upon by the electricity seller and buyer or based on actual conditions for each operational cycle; |
|
kHS: |
The efficiency decline rate for year j (%); |
|
l: |
The order of the year of commercial operation of the plant; |
|
|
The fuel transportation cost for primary fuel at the time of payment for month t, year j is calculated as the weighted average based on volume from invoices under fuel transportation contracts and LNG storage, gas re-gasification, and gas distribution contracts (excluding VAT), specifically as follows: For coal-fired thermal power plants: the weighted average of coal transportation contracts or agreements; For natural gas-fired thermal power plants: the weighted average of pipeline gas transportation service prices for power generation approved by competent authorities in accordance with the Law on Prices and relevant laws; For liquefied natural gas (LNG)-fired thermal power plants: the weighted average of LNG storage, re-gasification, transportation, and distribution service prices for power generation approved by competent authorities in accordance with the Law on Prices and relevant laws; For waste-to-energy, biomass, and new energy power plants: agreed upon by the electricity seller and buyer based on the actual conditions of the power plant; For thermal power plants using a combination of multiple fuels: agreed upon by the electricity seller and buyer based on the actual conditions of the power plant; For fuel purchase contracts that include the primary fuel transportation cost, the fuel transportation cost component; |
3. Total start-up costs in month t of the thermal power plant;(VND), is determined according to the following formula:
Where:
|
u: |
Order of the power generation unit of the power plant; |
|
U: |
Number of power generation units of the power plant; |
|
f: |
Type of fuel (for main fuel f = 1; auxiliary fuel f = 2); |
|
s: |
Start-up status of the power generation unit; |
|
S: |
Number of start-up statuses of the power generation unit; |
|
pu,f,s: |
Number of times the power generation unit u starts up using fuel f at start-up status s in the month; |
|
Briefly describe technical improvements, production processes, raw materials, designs; new technology applications such as automation, digitalization, clean technology; management, marketing, distribution solutions; products winning awards or certifications related to innovation…):…u,f,s: |
Quantity of fuel consumed (in kg) or amount of heat consumed of gas (in BTU) for one start-up of the power generation unit u using fuel f at start-up status s; |
|
Du,f,s: |
Fuel price for one start-up of the power generation unit u using fuel f at start-up status s, calculated in VND/kg and VND/BTU; |
|
|
Other total costs for one start-up, calculated in VND. |
4. Provisions on payment of start-up costs:
a) For thermal power plants: implemented according to the competitive electricity market regulations issued by the Ministry of Industry and Trade;
b) For waste-to-energy, biomass, and new energy power plants: agreed upon between the seller and buyer of electricity.
Chapter III
ELECTRICITY PURCHASE AND SALE CONTRACT
Article 19. Main contents of the electricity purchase and sale contract
1. The main contents of the electricity purchase and sale contract stipulated in Appendix III issued together with this Circular serve as the basis for the electricity seller and buyer to negotiate and sign the contract. The electricity seller and buyer have the right to agree and supplement specific terms in the electricity purchase and sale contract in accordance with Vietnamese law;
2. The language used is Vietnamese. In cases where the seller has foreign investors, the seller and buyer of electricity may agree to use an additional contract in English.
Article 20. Documents for negotiating the electricity purchase and sale contract between the seller and buyer of electricity
1. Documents proposed for negotiating the electricity purchase and sale contract for new power plants include:
a) Draft of the electricity purchase and sale contract according to the main contents stipulated in Appendix III promulgated together with this Circular;
b) Approval of investment orientation or decision on investment orientation or certificate of investment registration of the project;
c) Decision on construction investment project attached with explanation and project evaluation report by independent consultants, and accompanying documents;
d) The decision approving the initial total investment amount of the project or the adjusted total investment amount of the project effective at the time of negotiating the power generation service price and the main contents of the basic design related to negotiating the electricity purchase and sale contract, the report on the review of the basic design, and the notification of the results of the basic design review and the total investment review by the competent state management agency (if applicable);
đ) Agreement on connecting the power plant to the national grid accompanied by the connection plan of the power plant;
e) Loan contract or documents and materials between the investor and lenders, plans or actual disbursement of loan funds;
g) Fuel supply contracts for the power plant, clearly specifying the fuel price for power generation, fuel transportation price, LNG storage price, gas re-gasification and distribution price, additional fees, fuel delivery points, and fuel supply deadlines;
h) Documentation calculating power loss and energy loss of transformers, transmission lines from high-voltage transformers to the point of connection with the national power grid, and documentation calculating self-consumption electricity in the power plant;
i) Documents calculating the specific fuel consumption rate for thermal power plants;
k) Pricing scheme for electricity sales determined according to the methods prescribed in Section 1 and Section 3 Chapter II of this Circular;
l) Other relevant documents (if any).
2. Documents for negotiating the electricity purchase and sale contract for operational power plants include:
a) Draft of the electricity purchase and sale contract according to the main contents stipulated in Appendix III promulgated together with this Circular;
b) Existing electricity purchase and sale contracts;
c) Technical files of the power plant, technical data of the SCADA/EMS system, relay protection and automation systems, P-Q operating characteristics of units up to the current date;
d) Fuel supply contract for the power plant;
đ) Pricing scheme for electricity sales of the power plant determined according to the provisions of Chapter II of this Circular;
e) Financial reports or related documents of the power plant for the most recent years up to the date of negotiating the electricity purchase and sale contract;
g) Other relevant documents (if any).
Chapter IV
IMPLEMENTING PROVISIONS
Article 21. Responsibilities of the State Management Agency for Electricity under the Ministry of Industry and Trade
Guide and inspect the implementation of the provisions of this Circular. In necessary cases, propose amendments and supplements to the Circular to meet practical needs and ensure consistency with relevant laws.
Article 22. Responsibilities of Vietnam Electricity Corporation
1. Take the lead and coordinate with electricity buyers and sellers to calculate and agree on the exchange rate differential settlement plan in implementing the electricity purchase and sale contracts as stipulated in this Circular.
2. To take the lead and coordinate with the electricity buyer and seller to examine and consolidate electricity purchase and sale contracts to align with the actual operations of the power generation unit, enhance operational efficiency, and reduce overall costs of the national power system when requested by the electricity seller or buyer.
Article 23. Responsibilities of the Electricity Purchaser
1. Negotiate electricity purchase and sale contracts with electricity sellers according to this Circular; be responsible for ensuring the accuracy, reasonableness, and validity of provided data and documents.
2. Coordinate with the electricity seller to calculate and agree on exchange rate differences in the implementation of the electricity purchase and sale contract according to the provisions of this Circular, and provide such information to Vietnam Electricity for consideration of payment methods.
Article 24. Responsibilities of Electricity Sellers
1. Negotiate electricity purchase and sale contracts with electricity buyers according to the stipulations; be responsible for ensuring the accuracy, reasonableness, and validity of provided data and documents.
2. Provide complete information, be responsible for ensuring the accuracy, reasonableness, and legality of the data and documents provided to relevant units and agencies during the negotiation and inspection of the electricity purchase and sale contract.
3. The electricity seller shall organize the selection of fuel supply units, fuel transportation units, and sign contracts for fuel purchase and transportation in compliance with the law, ensuring fairness, competition, and transparency.
4. Electricity sellers are responsible for controlling supply and transportation contracts to ensure the legal origin of fuel, competitive prices, and transparency as required by relevant laws.
5. Coordinate with electricity buyers to calculate the exchange rate differential in annual implementation of electricity purchase and sale contracts as stipulated in this Circular, and submit to Vietnam Electricity Corporation for consideration of payment plans.
Article 25. Responsibilities of Fuel Suppliers and Transporters
Implement framework agreements, fuel supply contracts, fuel transportation contracts, and other related fuel contracts in accordance with the law, ensuring fairness, competition, and transparency.
Article 26. Adjustment of Power Generation Service Prices
Electricity sellers and buyers shall renegotiate power generation service prices in existing electricity purchase and sale contracts according to Clause 4 of Article 52 of the Electricity Law.
Article 27. Transitional Provisions
1. For power plants that have signed electricity purchase and sale contracts under the method prescribed in Circular No. 57/2020/TT-BCT, Circular No. 56/2014/TT-BCT, Circular No. 51/2015/TT-BCT, and new power projects initiated before September 19, 2017, when the final investment cost has been settled, both the electricity seller and purchaser may request to recalculate the electricity service generation price based on the approved final investment cost in accordance with Article 15 of this Circular.
2. For power plants that have signed electricity purchase and sale contracts under the method prescribed in Circular No. 41/2010/TT-BCT, upon receiving the competent authority's opinion regarding renegotiating the electricity price based on the final investment cost, both the electricity seller and purchaser shall recalculate the electricity service generation price based on the approved final investment cost in accordance with Article 15 of this Circular.
3. For power plants that have signed electricity purchase and sale contracts, electricity sellers and buyers have the right to negotiate and agree to amend electricity purchase and sale contracts according to this Circular.
4. For each phase of the competitive electricity market, the electricity seller and purchaser shall be responsible for amending and supplementing the terms of the electricity purchase and sale contract to comply with the regulations of each level of the competitive electricity market.
5. For exchange rate differences without a settlement plan prior to the effective date of Circular No. 07/2024/TT-BCT, the electricity seller and purchaser shall calculate and agree on the exchange rate difference settlement plan for this period in accordance with Circular No. 07/2024/TT-BCT.
6. For power projects with special grid connection components invested before the effective date of this Circular, the special grid connection price determination method in Circular No. 07/2024/TT-BCT shall continue to apply.
Article 28. Effective Date
1. This Circular takes effect from February 1, 2025.
2. Repeal Circular No. 07/2024/TT-BCT dated April 12, 2024, issued by the Minister of Industry and Trade, prescribing the method for determining power generation prices and electricity purchase and sale contracts.
3. Repeal Article 4 of Circular No. 13/2017/TT-BCT dated August 3, 2017 issued by the Minister of Industry and Trade amending and supplementing certain articles of Circular No. 57/2014/TT-BCT dated December 19, 2014 issued by the Minister of Industry and Trade on the method and procedure for establishing and promulgating the electricity generation price framework.
4. During implementation, if any difficulties arise, organizations and individuals are responsible for reporting to the Ministry of Industry and Trade for examination, amendment, and supplementation as appropriate./.
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