Decision No. 13/2020/QD-TTg On Mechanism to Encourage the Development of Solar Power in Vietnam

                             

Pursuant to …;

On Mechanism to Encourage the Development of Solar Power in Vietnam

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||| Pursuant to the Law on Organization of the Government dated June 19, 2015;

Pursuant to the Electricity Law dated December 3, 2004; and the Law Amending and Supplementing Certain Provisions of the Electricity Law dated November 20, 2012;

Pursuant to the Investment Law on November 26, 2014; the Law Amending and Supplementing the Investment Law on November 22, 2016;

Pursuant to the Law on Construction promulgated on June 18, 2014;

Implementing Resolution No. 115/NQ-CP dated August 31, 2018 of the Government on implementing certain special mechanisms and policies to support the development of the economy and society, stabilize production, and people's livelihood in Ninh Thuan Province for the period of 2018-2023;

At the proposal of the Minister of Industry and Trade;

The Prime Minister issues this Decision on the mechanism to encourage the development of solar power in Vietnam.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decision stipulates the mechanism to encourage the development of solar power in Vietnam.

Article 2. Applicability

The subjects to which this Decision applies include organizations and individuals participating in the development of solar power in Vietnam and other organizations and individuals related thereto.

Article 3. Explanation of Terms

In this Decision, the following terms shall be understood as follows:

1. Purchaser of electricity is the Vietnam Electricity Corporation or its member units authorized by the Vietnam Electricity Corporation or other organizations or individuals purchasing electricity from the Seller of electricity or organizations assuming the rights and obligations of the aforementioned organizations in accordance with the provisions of the law.

2. Seller of electricity is an organization or individual participating in activities in the field of generating electricity from solar power plants or systems or an organization or individual assuming the rights and obligations of the aforementioned organizations or individuals in accordance with the provisions of the law.

3. Non-Vietnam Electricity Corporation electricity distribution and retail unit is an electricity unit not belonging to the Vietnam Electricity Corporation that has been granted a license to operate in the fields of electricity distribution and retail, purchasing wholesale electricity from electricity distributors to sell retail electricity to electricity consumers.

4. Solar power is electricity produced from photovoltaic panels according to the principle of converting light energy into electric energy.

5. Rooftop solar power system is a solar power system with photovoltaic panels installed on the roof of a construction project and having a capacity not exceeding 01 MW, directly or indirectly connected to the grid with voltage levels up to 35 kV of the Purchaser of electricity.

6. Grid-connected solar power project is a solar power project directly connected to the national grid except as provided in Clause 5 of this Article.

7. Floating solar power project is a grid-connected solar power project with photovoltaic panels installed on floating structures on water surfaces.

8. Ground-mounted solar power project is a grid-connected solar power project except for projects specified in Clause 7 of this Article.

Commercial Operation Date of a grid-connected solar power project or part thereof is the date when the entire or part of the solar power facility is ready to sell electricity to the Purchaser of electricity and meets the following conditions:

a) Completion of initial tests for the entire or part of the facility in accordance with regulations;

b) Having been granted a license to operate in the field of power generation by the competent authority;

c) The Seller of electricity and the Purchaser of electricity have agreed on meter readings to commence payment.

Chapter II

GRID-CONNECTED SOLAR POWER

Article 4. Obligation to Purchase Electricity from Grid-Connected Solar Power Projects

1. The Purchaser of electricity shall be responsible for purchasing all electricity generated from grid-connected solar power projects fed into the national grid in compliance with the regulations on system operation and technical standards and specifications of the power industry; priority dispatch to fully utilize the capacity and electricity generated by grid-connected solar power projects.

2. The use of model power purchase agreements for grid-connected solar power projects is mandatory in the sale and purchase of electricity between the Seller of electricity and the Purchaser of electricity being the Vietnam Electricity Corporation or its member units authorized by the Vietnam Electricity Corporation.

3. The term of the power purchase agreement for grid-connected solar power projects is twenty years from the commercial operation date. After this period, extension of the agreement term or signing a new agreement shall be carried out in accordance with the laws at the time of extension or signing a new agreement.

Article 5. Purchase price for solar power grid-connected projects

1. Solar power grid-connected projects that have been decided on investment orientation by competent authorities before November 23, 2019, and whose project commercial operation date or part thereof falls within the period from July 1, 2019 to December 31, 2020 shall apply the purchase electricity tariff for solar power grid-connected projects at the point of delivery as specified in the Appendix of this Decision.

2. The purchase electricity tariff in the purchase electricity tariff does not include value-added tax and will be adjusted according to fluctuations in the exchange rate of the Vietnamese dong against the US dollar (equivalent to US cents/kWh). The applicable exchange rate is the central exchange rate of the Vietnamese dong against the US dollar published by the State Bank of Vietnam on the day the electricity seller issues the payment invoice. This purchase electricity tariff will be applied for 20 years from the date of commercial operation.

3. For Ninh Thuan Province, the purchase electricity tariff from solar power grid-connected projects included in the power development plan at all levels and with a commercial operation date before January 1, 2021, with an accumulated total capacity not exceeding 2,000 MW is VND 2,086/kWh (excluding value-added tax, equivalent to 9.35 US cents/kWh based on the central exchange rate of the Vietnamese dong against the US dollar published by the State Bank of Vietnam on April 10, 2017, which is VND 22,316/USD). This tariff will be applied for 20 years from the date of commercial operation. The purchase electricity tariff will be adjusted according to fluctuations in the exchange rate of the Vietnamese dong against the US dollar. The applicable exchange rate is the central exchange rate of the Vietnamese dong against the US dollar published by the State Bank of Vietnam on the day the electricity seller issues the payment invoice.

4. The purchase electricity tariff from solar power grid-connected projects that do not meet the conditions stipulated in Clause 1 and Clause 3 of this Article shall be determined through competitive mechanisms.

5. The purchase electricity tariff stipulated in Clause 1 and Clause 3 of this Article shall be applied to projects with photovoltaic cell efficiency greater than 16% or module efficiency greater than 15%.

6. The cost of purchasing electricity from solar power grid-connected projects as stipulated in Clause 1 and Clause 3 of this Article shall be recorded and fully reflected in the input parameters of the annual wholesale and retail electricity pricing schemes of the Vietnam Electricity Corporation.

Article 6. Development of solar power grid-connected projects

1. Main equipment of solar power grid-connected projects must comply with Vietnamese technical standards and regulations or international standards (IEC) or equivalent standards. The quality of electricity from solar power grid-connected projects must meet technical requirements regarding voltage, frequency, and system operation requirements according to current regulations.

2. Investment construction of solar power grid-connected projects shall be carried out in accordance with laws on investment, construction, electrical safety, land, fire prevention and fighting, environmental protection, and other relevant laws.

3. Tax incentives, land use rights, and water surface use for solar power grid-connected projects shall be implemented in accordance with current relevant laws.

Article 7. Grid connection of solar power grid-connected projects

1. The electricity seller is responsible for investing in, installing, operating, and maintaining electricity metering equipment, transmission lines, and step-up substations (if any) from the electricity seller's power plant to the grid connection point with the electricity buyer's grid; organizing metrological inspection, calibration, and testing of electricity metering equipment in accordance with current laws on measurement.

2. The grid connection point shall be agreed upon by the electricity seller and the electricity buyer in accordance with approved planning. In cases where the grid connection point differs from the location of the metering equipment, the electricity seller shall bear the loss of electricity on the grid connection lines and the transformer step-up loss of the power plant.

Chapter III

HOUSEHOLD SOLAR POWER SYSTEM

Article 8. Purchase Price for Electricity and Model Power Purchase Agreement

1. Rooftop solar power systems are permitted to sell part or all of the electricity generated to the Buyer, which is the Vietnam Electricity Corporation or other organizations and individuals when not using the Vietnam Electricity Corporation's grid.

2. The Vietnam Electricity Corporation or authorized units shall settle the amount of electricity fed into the national grid from rooftop solar power systems at the purchase price specified in the Purchase Price Table for rooftop solar power systems in the Appendix of this Decision. This purchase price does not include value-added tax and is adjusted according to fluctuations in the exchange rate between the Vietnamese dong and the US dollar (equivalent to US cents/kWh). The applicable exchange rate is the central exchange rate of the Vietnamese dong against the US dollar published by the State Bank of Vietnam on the last day of the previous year for calculating the electricity payment for the following year. The Parties are responsible for complying with current laws regarding taxes and fees.

3. In cases where the electricity buyer is not the Vietnam Electricity Corporation or an authorized unit, the purchase price and power purchase agreement shall be agreed upon by the parties in accordance with current legal regulations.

4. The purchase price stipulated in Clause 2 of this Article applies to rooftop solar power systems that have been put into operation and confirmed their meter readings during the period from July 1, 2019 to December 31, 2020, and will be applied for 20 years from the date of operation. The cost of purchasing electricity from rooftop solar power projects as specified in Clause 2 of this Article must be fully accounted for and included in the input parameters of the annual wholesale and retail electricity pricing plans of the Vietnam Electricity Corporation. Payment invoices are based on separate volumes of delivered and received electricity.

5. The power purchase agreement where the electricity buyer is the Vietnam Electricity Corporation or an authorized unit of the Vietnam Electricity Corporation must follow the Model Power Purchase Agreement. The term of the power purchase agreement for rooftop solar power systems is a maximum of 20 years from the date of operation. After this period, the extension of the contract term or signing a new contract shall be carried out in accordance with current legal regulations.

Article 9. Development of Rooftop Solar Power Systems, Grid Connection, and Metering

1. Rooftop solar power systems directly or indirectly connected to the national grid shall be developed after registering for grid connection with the Vietnam Electricity Corporation or authorized units of the Vietnam Electricity Corporation.

2. The Vietnam Electricity Corporation shall invest in, install, and maintain metering equipment for rooftop solar power systems that have signed power purchase agreements with the Vietnam Electricity Corporation or authorized units of the Vietnam Electricity Corporation.

3. The photovoltaic cell efficiency of rooftop solar power systems must be greater than 16%, or the module efficiency must be greater than 15%.

4. Organizations and individuals investing in and installing rooftop solar power systems must ensure compliance with current requirements for electrical safety, construction safety, environmental protection, and fire prevention.

Chapter IV

IMPLEMENTING PROVISIONS

Article 10. Responsibilities of State Management Agencies

1. Ministry of Industry and Trade

a) Take the lead and coordinate with the People's Committee of Ninh Thuan Province and Vietnam Electricity Corporation to monitor solar power grid-connected projects that meet the requirements for enjoying the electricity purchase support price as stipulated in Clause 3, Article 5 of this Decision and comply with Resolution No. 115/NQ-CP dated August 31, 2018 of the Government on implementing certain special mechanisms and policies to support Ninh Thuan Province in economic and social development, production stability, and people's livelihoods during the period from 2018 to 2023;

b) Organize, guide, and coordinate with the People's Committees of provinces and centrally governed cities to inspect and supervise the implementation of this Decision;

c) Issue model Power Purchase Agreements applicable to solar power grid-connected projects and model Power Purchase Agreements applicable to rooftop solar systems where the electricity buyer is Vietnam Electricity Corporation or its authorized units;

d) Issue regulations on metering, recording of electricity generation, and payment for rooftop solar systems involving participation of electricity distribution and retail units not belonging to Vietnam Electricity Corporation;

đ) Coordinate with ministries, sectors, and localities to mobilize resources to promote the development of rooftop solar programs;

e) Study and complete bidding mechanisms for solar power projects, implementation timelines, and report to the Prime Minister for approval to implement nationwide.

2. People's Committees of provinces and centrally governed cities

a) Coordinate and assist investors in land compensation, clearance, infrastructure, human resources to invest in, implement, and develop solar power projects within their jurisdictions;

b) Monitor and inspect the implementation of solar power projects in their localities within their authority;

c) Carry out state management tasks related to solar power activities in their localities in accordance with current laws;

d) Report to the Ministry of Industry and Trade on the situation of registration, investment, and development of solar power projects within their jurisdictions.

Article 11. Vietnam Electricity Corporation

1. Vietnam Electricity Corporation shall be responsible for fully accounting for the costs of purchasing electricity from solar power projects that have signed Power Purchase Agreements with Vietnam Electricity Corporation or its authorized units and incorporating these costs into the input parameters for the annual wholesale and retail electricity pricing schemes of Vietnam Electricity Corporation.

2. Study and invest in solutions for electricity storage to ensure stable operation of the power system when integrating renewable energy sources.

3. Develop an information management system for the development of grid-connected solar power and rooftop solar systems nationwide.

4. Review the progress of grid projects to ensure capacity absorption of grid-connected solar power projects and rooftop solar systems without overloading the national power system.

5. Regularly report annually to the Ministry of Industry and Trade on the status of solar power grid connection, total installed capacity, and electricity purchased from grid-connected solar power projects and rooftop solar systems.

Article 12. Effective Date

1. This Decision takes effect from May 22, 2020.

2. Ministers, heads of ministerial-level agencies, heads of government agencies, Chairmen of provincial and centrally governed city People's Committees; heads of agencies, units, and organizations involved in the development of solar power projects in Vietnam are responsible for implementing this Decision./.