Circular 15/2022/TT-BCT on the method for establishing the framework price for power generation from solar and wind power plants transitioning to new regulations

CIRCULAR

Article specifies the method for constructing the pricing framework for solar power plants and wind power plants transitioning to operation.

solar and wind power plants for transitional purposes

 

Pursuant to the Electricity Law dated December 3, 2004;

Pursuant to the Law Amending and Supplementing Certain Provisions of the Electricity Law on November 20, 2012;

Pursuant to the Law Amending and Supplementing Certain Provisions of the Public Investment Law, the Law on Investment under the Public-Private Partnership Model, the Investment Law, the Housing Law, the Bidding Law, the Electricity Law, the Enterprise Law, the Special Consumption Tax Law, and the Civil Execution Law on January 11, 2022;

Pursuant to Decree No. 98/2017/NĐ-CP dated August 18, 2017, of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade;

Based on Decree No. 137/2013/NĐ-CP dated October 21, 2013, issued by the Government, detailing the implementation of certain provisions of the Electricity Law and the Law Amending and Supplementing Certain Provisions of the Electricity Law;

Pursuant to Decision No. 13/2020/QD-TTg dated April 6, 2020 of the Government stipulating the incentive mechanism for promoting solar power in Vietnam;

Pursuant to Decision No. 37/2011/QD-TTg dated June 26, 2011 of the Government stipulating the incentive mechanism for promoting wind power in Vietnam;

Pursuant to Decision No. 39/2018/QD-TTg dated September 10, 2018 of the Government amending and supplementing certain provisions of Decision No. 37/2011/QD-TTg;

At the proposal of the Director of the Electricity Regulatory Authority;

4. Supplement Clause 7 following Clause 6 Article 2 as follows: Article specifies the method for constructing the pricing framework for solar power plants and wind power plants transitioning to operation.

 

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. This Circular stipulates the method, procedure for constructing and promulgating the pricing framework for ground-mounted solar power plants, floating solar power plants, onshore wind power plants, and offshore wind power plants.

2. This Circular applies to the following entities:

a) Vietnam Electricity Corporation;

b) Organizations and individuals participating in implementing investment in solar power plants that have signed power purchase agreements with Vietnam Electricity before January 1, 2021, and wind power plants that have signed power purchase agreements with Vietnam Electricity before November 1, 2021 but do not meet the conditions for applying the electricity purchase price prescribed in Clause 1 and Clause 3, Article 5 of Decision No. 13/2020/QD-TTg dated April 6, 2020 of the Government stipulating the incentive mechanism for promoting solar power in Vietnam and Clause 7, Article 1 of Decision No. 39/2018/QD-TTg dated September 10, 2018 of the Government amending and supplementing certain provisions of Decision No. 37/2011/QD-TTg dated June 26, 2011 of the Government stipulating the incentive mechanism for promoting wind power in Vietnam.

These power plants must strictly comply with all legal regulations on investment and construction, closely align with the national power system's absorption capacity and grid capacity to accommodate power generation; comply with the electricity pricing mechanism at the time of operation, bear full responsibility for the project's effectiveness according to the approved mechanism. In case of violations detected by inspection and supervision agencies, they will be dealt with strictly in accordance with the law. In cases of serious violations, competent authorities may revoke the investment permit and suspend the project in accordance with the laws on investment and construction.

Article 2. Definitions

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

1. N |||Ground-mounted solar power plant chuẩn refers to the solar power plant selected for calculating the pricing framework for ground-mounted solar power plants and floating solar power plants with installed capacity of 50 MWp.
2. Floating solar power plant is a grid-connected solar power plant where photovoltaic panels are installed on floating structures on water surfaces.
3. Ground-mounted solar power plant refers to grid-connected solar power plants excluding those specified in Clause 2 of this Article.
4. N |||is a wind power plant that has been selected as an investor based on the implementation of the National Power Development Plan, with a common capacity scale, without having signed a power purchase agreement, representing onshore wind power plants, offshore wind power plants, and wind power plants located beyond the territorial waters, and used for calculating the electricity generation price framework for such types of wind power plants. of state agencies Onshore wind power plant chuẩn refers to the wind power plant selected for calculating the pricing framework for onshore wind power plants and offshore wind power plants with installed capacity of 50 MW.
5. Offshore wind power plant is a grid-connected wind power plant with the center of the wind turbine foundation constructed and operated within the boundary between the lowest average low-water line of the mainland according to current regulations and a distance of six nautical miles from the lowest average low-water line of the mainland. refers to grid-connected wind power plants with wind turbines constructed and operated on land and coastal areas within the boundary defined by the lowest average annual mean low water line (18.6 years).
6. is a grid-connected wind power plant with wind turbines constructed outside the six-nautical-mile territorial sea of the mainland. refers to grid-connected wind power plants with wind turbines constructed and operated outside the lowest average annual mean low water line (18.6 years) offshore.
7. Total investment cost is the total construction investment cost of the project determined in accordance with the current laws, consistent with the basic design and other contents of the feasibility study report for investment and construction.

 

Chapter II

DETERMINATION CONSTRUCTION PRICING FRAMEWORK

Article 3. Principles for Establishing the Power Generation Price Range

1. The pricing framework for ground-mounted solar power plants, floating solar power plants, onshore wind power plants, and offshore wind power plants is a range of values from the minimum value (0 VND/kWh) to the maximum value.

2. The maximum value applicable to solar power plants is the electricity generation price of the standard solar power plant determined according to the methods prescribed in Articles 4, 5, and 6 of this Circular.

3. The maximum value applicable to wind power plants is the electricity generation price of the standard wind power plant determined according to the methods prescribed in Articles 7, 8, and 9 of this Circular.

Article 4.Method for Determining the Power Generation Price of N |||Ground-mounted solar power plant chuẩn

The electricity generation price P^MT (VND/kWh) of the standard solar power plant is determined by the following formula:

"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:^MT = FC^MT + FOMC^MT

Where:

Article 5.Method for establishing the fixed average price of N |||Ground-mounted solar power plant chuẩn

1. Fixed average price FC^MT (VND/kWh) of the standard solar power plant is a component for recovering investment costs, determined by the following formula:

 

Where:

2. Annualized investment capital cost of the standard solar power plant TC^MT (VND) is calculated by the following formula:

 

 

 Where:

3. The investment rate is the investment cost for 1 kWp of installed capacity of the standard solar power plant, determined based on the total investment of solar power plants:

a) That have signed power purchase agreements with Vietnam Electricity or are invested in by Vietnam Electricity before January 1, 2021;

b) Refer to data from consulting organizations.

4. The financial discount rate i (%) applied to the pre-tax weighted average cost of capital for the standard solar power plant is determined according to the following formula:

 

 

Where:

The interest rate on foreign currency borrowed capital is determined by adding the average SOFR (Secured Overnight Financing Rate) for a term of 180 days (180 Days - Average) of the 36 consecutive months ending in the nearest March, June, September, or December of the year of contract negotiation published by the Fed (Website: www.newyorkfed.org) to the average annual fee for arranging loans by banks at 3%/year;_{For coal-fired thermal power plants where the enterprise holds 100% of the registered capital and uses 100% of its own capital to invest in the project approved by the competent authority, E is determined as 100%;} is determined based on the total investment amount and the capital structure of the project according to the project approval decision of the competent state agency;

F_{For coal-fired thermal power plants where the enterprise holds 100% of the registered capital and uses 100% of its own capital to invest in the project approved by the competent authority, E is determined as 100%;} Proportion of domestic currency (Vietnamese Dong) loan capital in total loan capital as specified in the Appendix attached to this Circular (%);_F × r_d,F + D_{Domestic air passenger transport service on regular basic economy class} × r_d,D

In this context:

Post-tax return on equity (%), determined as 12%;_e,pt re,pt: Post-tax return on equity is 12%;

 

Where:

5. The average annual electricity delivered and received (kWh) of the standard solar power plant is determined according to the following formula:

= A × r × H × PR

6. The total installed photovoltaic panel area (m²) is calculated as follows:²);

 

In which:

7. The parameters P, r, H, PR specified in Clause 5 and Clause 6 of this Article are determined based on:^TP/H^TPa) Feasibility study reports and technical design documents reviewed by solar power plants that have signed power purchase agreements before January 1, 2021;

b) Reference data from consulting organizations.

Fixed operation and maintenance cost FOMC

Article 6.Method for establishing the fixed operation and maintenance cost price of N |||Ground-mounted solar power plant chuẩn

(VND/kWh) of the standard solar power plant is a component for recovering major repair costs, labor costs, and other annual expenses, determined according to the following formula:^MT Total fixed operation and maintenance costs of the standard solar power plant are determined according to the provisions of Clause 2 of this Article (VND);

 

Where:

The investment cost per unit of capacity of the standard solar power plant is determined according to the provisions of Clause 3 of Article 5 of this Circular (VND/kWp);

 

Where:

Article 7.Method for Determining the Power Generation Price of N |||the Power Plant wind standard

The electricity generation price P^of The average fixed price of the standard wind power plant is determined according to the provisions of Article 8 of this Circular (VND/kWh);

 

Where:

Article 8.Method for establishing the fixed average price of N |||power plant ; wind standard

1. Fixed average price FC^of The construction investment cost of the standard wind power plant (excluding value-added tax) is evenly converted annually according to the provisions of Clause 2 of this Article (VND);

 

Where:

The investment cost per unit of capacity of the standard wind power plant is determined according to the provisions of Clause 3 of this Article (VND/kW);^of (VND) is calculated by the following formula:

 

Where:

a) That have signed power purchase agreements with Vietnam Electricity Corporation before November 1, 2021;

4. The financial discount rate i (%) applied to the pre-tax weighted average cost of capital for the standard wind power plant is determined according to the following formula:

Fixed operation and maintenance cost FOMC

The proportion of debt in the total approved investment is prescribed in the Appendix attached to this Circular (%);

 

Where:

The interest rate on foreign currency borrowed capital is determined by adding the average SOFR (Secured Overnight Financing Rate) for a term of 180 days (180 Days - Average) of the 36 consecutive months ending in the nearest March, June, September, or December of the year of contract negotiation published by the Fed (Website: www.newyorkfed.org) to the average annual fee for arranging loans by banks at 3%/year;_{For coal-fired thermal power plants where the enterprise holds 100% of the registered capital and uses 100% of its own capital to invest in the project approved by the competent authority, E is determined as 100%;} is determined based on the total investment amount and the capital structure of the project according to the project approval decision of the competent state agency;

F_{For coal-fired thermal power plants where the enterprise holds 100% of the registered capital and uses 100% of its own capital to invest in the project approved by the competent authority, E is determined as 100%;} Proportion of domestic currency (Vietnamese Dong) loan capital in total loan capital as specified in the Appendix attached to this Circular (%);_F × r_d,F + D_{Domestic air passenger transport service on regular basic economy class} × r_d,D

In this context:

Post-tax return on equity (%), determined as 12%;_e,pt re,pt: Post-tax return on equity is 12%;

 

Where:

In which:

 

The expected average annual electricity delivered and received is 50% of the standard wind power plant is determined according to the provisions of Clause 6 of this Article (kWh);

       6. The long-term average electricity exchange volume expected for a standard wind power plant is determined as follows (kWh):

 

In this context:

7. The parameters k_CF, k_bd is determined based on the provisions of Clause 5 and Clause 6 of this Article;

a) Feasibility study reports and technical design documents that have been reviewed for wind power plants which signed power purchase agreements before November 1, 2021;

Fixed operation and maintenance cost FOMC

Article 9.Method for establishing the fixed operation and maintenance cost price of N |||power plant ; wind standard

(VND/kWh) of the standard solar power plant is a component for recovering major repair costs, labor costs, and other annual expenses, determined according to the following formula:^of (VND/kWh) of the standard wind power plant is a component for recovering major repair costs, labor costs, and other annual expenses, determined according to the following formula:

 

Where:

2. The total fixed operation and maintenance costs (VND) of the standard wind power plant are determined according to the following formula:

 

In this context:

 

PART III

PROCEDURES FOR CONSTRUCTION, REVIEW AND ISSUANCEREVIEW AND ISSUE FRAMEWORK PRICING CALCULATION
PRICING FRAMEWORK

Article 10. Procedures for construction, review, and issuance of the pricing framework for power generation

1. Within 15 days from the date this Circular takes effect, the project investors of ground-mounted solar power plants, floating solar power plants that signed power purchase agreements before January 1, 2021, and onshore wind power plants, offshore wind power plants that signed power purchase agreements before November 1, 2021 shall be responsible for providing feasibility study reports or technical design documents to the Vietnam Electricity Corporation.

2. Based on the documents stipulated in Clause 1 of this Article, the Vietnam Electricity Corporation has the right to hire consultants to select sets of parameters, perform calculations, and develop the pricing framework for power generation of the standard solar power plant according to the provisions of Articles 4, 5, and 6 of this Circular, and the standard wind power plant according to the provisions of Articles 7, 8, and 9 of this Circular.

3. Within 45 days from the date this Circular takes effect, the Vietnam Electricity Corporation shall be responsible for developing the pricing framework for power generation of ground-mounted solar power plants, floating solar power plants, onshore wind power plants, and offshore wind power plants according to the provisions of Article 11 of this Circular and submit it to the Electricity Regulatory Authority for review.

4. Procedures for reviewing the pricing framework for power generation:

a) Within five working days from the date of receipt of the calculation documents for the pricing framework for power generation as stipulated in Article 11 of this Circular, the Electricity Regulatory Authority shall be responsible for checking the detailed contents of the documents, the completeness, and validity of the submitted documents.

b) In case the documents are incomplete or invalid, the Electricity Regulatory Authority shall be responsible for sending a letter requesting the Vietnam Electricity Corporation to supplement, amend, or clarify the contents in the submitted documents.

c) Within 45 days from the date of receipt of valid calculation documents for the pricing framework for power generation, the Electricity Regulatory Authority shall be responsible for reviewing the pricing framework for power generation according to the methods prescribed in this Circular.

d) If necessary, the Electricity Regulatory Authority may organize consultations with independent experts or seek opinions on the pricing framework through an Advisory Board established by the Ministry of Industry and Trade.

The Advisory Board shall consist of a maximum of nine members, including one chairman, one vice-chairman, one secretary, representatives of relevant units of the Ministry of Industry and Trade with appropriate expertise and deep understanding in the field of power generation.

5. Not later than ten working days from the date of completion of the review of the pricing framework for power generation as stipulated in Clause 4 of this Article, the Electricity Regulatory Authority shall be responsible for completing the documents to submit to the Minister of Industry and Trade for approval of the pricing framework for power generation applicable to the aforementioned types of power plants and implementing the announcement procedures on the websites of the Ministry of Industry and Trade and the Electricity Regulatory Authority.

Article 11. Dossier for Approval of the Generation Price Framework

The application documents for approval of the pricing framework for power generation of ground-mounted solar power plants, floating solar power plants, onshore wind power plants, and offshore wind power plants as stipulated in Clause 2 of Article 1 of this Circular include:

1. The Vietnam Electricity Corporation's report and calculations regarding the power generation prices of standard solar power plants and standard wind power plants.

2. Tables of parameters and calculation documents for the power generation prices of standard solar power plants and standard wind power plants as stipulated in Article 4, Article 7, and the Appendix issued together with this Circular.

3. Documents related to the parameters for calculating the power generation prices of ground-mounted solar power plants, floating solar power plants, onshore wind power plants, and offshore wind power plants.

 

Chapter IV

IMPLEMENTING PROVISIONS

Article 12. Responsibilities of the Ministry of Industry and Trade

1. Appoint independent experts or establish advisory boards to participate in the review of the electricity generation price framework as stipulated in Point d, Clause 4, Article 10 of this Circular. In cases where necessary, the Ministry of Industry and Trade shall organize the collection of opinions from relevant ministries and agencies regarding this electricity generation price framework.

2. Issue the electricity generation price framework for ground-mounted solar power plants, floating solar power plants, onshore wind power plants, and offshore wind power plants after completing the review.

Article 13. Responsibilities of the Electricity Regulatory Authority

1. Lead and coordinate with the appointed independent experts or advisory board as stipulated in Point d, Clause 4, Article 10 of this Circular to review the calculation results of the electricity generation price framework.

2. Submit the electricity generation price framework for approval and issuance by the Minister of Industry and Trade according to this Circular.

Article 14. Responsibilities of Vietnam Electricity Corporation

1. Issue documents to be signed by investors of ground-mounted solar power plants, floating solar power plants before January 1, 2021, and onshore wind power plants, offshore wind power plants before November 1, 2021, concerning the provision of feasibility study reports and technical design reports that have been reviewed.

2. Submit the calculation files of the electricity generation price framework for ground-mounted solar power plants, floating solar power plants, onshore wind power plants, and offshore wind power plants to the Electricity Regulatory Authority as stipulated in Articles 10 and 11 of this Circular.

Article 15. Effective Date

1. This Circular takes effect from November 25, 2022.
2. In cases where the referenced documents in this Circular are amended, supplemented, or replaced, they shall be implemented according to the amended, supplemented, or replacement documents.
3. During implementation, if any difficulties arise, organizations and individuals are responsible for reporting to the Ministry of Industry and Trade for appropriate supplementation and amendment./.