Circular No. 19/2023/TT-BCT stipulates the method for constructing the electricity generation pricing framework applicable to solar power plants and wind power plants.

 

CIRCULAR

Regulations on the method for establishing the electricity generation price framework

 applicable to solar power plants and wind power plants.

 

Based on 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;

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;

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

4. Supplement Clause 7 following Clause 6 Article 2 as follows: This Circular prescribes the method for establishing the annual electricity generation price framework applicable to solar power plants and wind power plants.

 

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. This Circular stipulates:

        a) The method for establishing the annual electricity generation price framework for ground-mounted solar power plants, floating solar power plants, onshore wind power plants, offshore wind power plants, and wind power plants located beyond the territorial waters;

        b) The procedures for establishing and promulgating the annual electricity generation price framework.

2. This Circular does not apply to solar power plants and wind power plants specified in point b, Clause 2, Article 1 of Circular No. 15/2022/TT-MCT dated October 03, 2022 of the Minister of Industry and Trade prescribing the method for establishing the electricity generation price framework for transitional solar power plants and wind power plants and those with power purchase agreements signed with Vietnam Electricity at effective electricity prices.

3. This Circular applies to the following entities:

a) Vietnam Electricity Corporation;

b) Organizations and individuals participating in the implementation of investment in solar power plants and wind power plants;

c) Other relevant organizations and individuals.

 

Article 2. Definitions

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

1. N |||Ground-mounted solar power plant chuẩn is a solar 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 ground-mounted solar power plants and floating solar power plants, and used for calculating the electricity generation price framework for such types of solar power plants.
2. Floating solar power plant is a grid-connected solar power plant with photovoltaic panels installed on a floating structure on water. Ground-mounted
3. Floating solar power plant is a grid-connected solar power plant, excluding those specified in Clause 2 of this Article. Wind power plant
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 is a grid-connected wind power plant with the center of the wind turbine foundation constructed and operated within the boundary defined by the lowest average low-water line of the mainland according to current regulations.
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. Offshore wind power plant
6. is a grid-connected wind power plant with wind turbines constructed outside the six-nautical-mile territorial sea of the mainland. Total project investment cost
7. is the total investment cost of the project determined in accordance with current laws, consistent with the basic design and other contents of the feasibility study report for investment construction. METHODS FOR DETERMINING THE ELECTRICITY GENERATION PRICE FRAMEWORK
8. 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

METHODS FOR DETERMINING THE FRAMEWORK PRICE FOR ELECTRICITY GENERATION

Article 3. Principles for Establishing the Power Generation Price Range

1. The power generation price range for ground-mounted solar power plants, floating solar power plants, onshore wind power plants, offshore wind power plants, and off-shore wind power plants is a range of values from the minimum value (0 VND/kWh) to the maximum value established and promulgated annually.

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

4. The power generation price range for ground-mounted solar power plants and floating solar power plants must be based on the average annual radiation intensity of the three regions: North, Central, and South.

        5. Select the standard solar power plant to establish the power generation price range according to the areas specified in Clause 4 of this Article.

Article 4.Method for Determining the Power Generation Price of For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.Ground-mounted solar power plant chuẩn

The power generation price (VND/kWh) of the standard power plant is determined according to the following formula:  (VND/kWh) of the standard solar power plant is determined by the following formula:

 = FC^MT + FOMC^MT

Where:

Article 5.Method for establishing the fixed average price of For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.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. Annual even conversion of investment capital cost of the standard solar power plant TC^MT (VND) is calculated by the following formula:

 

 Where:

3. Investment rate is the investment cost for 1 kWp installed capacity of the standard solar power plant (excluding investment costs for transmission lines and substations to the connection point, energy storage systems) determined based on the effective total investment amount, updated foreign currency exchange rates at the time of calculating the power generation price range, and references to data from consulting organizations (if necessary).

4. Financial discount rate i (%) applied to the weighted average cost of capital before tax of the standard solar power plant is determined by 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%;_{Average loan repayment period is 10 years;} re,pt: Post-tax return on equity is 12%;

Where:

5. Annual average electricity exchange volume  (kWh) of the standard solar power plant is determined by the following formula:

= A × r × H × PR

6. Parameters A, r, H, PR stipulated in Clause 5 of this Article are determined based on one of the following bases:

a) Feasibility study report or approved technical design of the standard solar power plant;

b) Data from consulting organizations.

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

        1. Fixed operation and maintenance cost price FOMC^MT (VND/kWh) of the standard solar power plant is a component for recovering major repair costs, labor costs, and other annual expenses, determined by the following formula:

Where:

 (VND) of the standard power plant is determined according to the following formula:  (VND) of the standard solar power plant is determined by the following formula:

Where:

Article 7.Method for Determining the Power Generation Price of For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.the Power Plant wind standard

The power generation price (VND/kWh) of the standard power plant is determined according to the following formula: (VND/kWh) of the standard wind power plant is determined by the following formula:

Where:

Article 8.Method for establishing the fixed average price of For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.power plant ; wind standard

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

Where:

2. The construction investment cost of the standard wind power plant is converted evenly each year TC^of (VND) is calculated by the following formula:

Where:

3. The investment rate is the investment cost for 01 kW of installed capacity of the standard wind power plant (excluding the cost of transmission lines and substations to the point of interconnection, energy storage systems), determined based on the effective total investment amount, updated foreign exchange rates at the time of calculating the electricity generation price framework, with reference to data from consulting organizations if necessary.

4. The financial discount rate i (%) applied to the weighted average cost of capital before tax of the standard wind 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%;_{Average loan repayment period is 10 years;} re,pt: Post-tax return on equity is 12%;

Where:

5. Annual average electricity exchange volume  (kWh) of the standard wind power plant is determined according to the following formula:

In this context:

       6. The expected average annual electricity generation and delivery capacity of 50% of the standard wind power plant is determined as follows (kWh):

In this context:

7. The parameters k_CF, k_bd stipulated in Clauses 5 and 6 of this Article are determined based on one of the following sources:

a) Feasibility study report or approved technical design of the standard wind power plant;

b) Data from consulting organizations.

Article 9.Method for establishing the fixed operation and maintenance cost price of For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.power plant ; wind standard

        1. The fixed operation and maintenance cost FOMC^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:

 (VND) of the standard power plant is determined according to the following formula:  (VND) of the standard wind power plant is determined according to the following formula:

In this context:

PART III

PROCEDURE FOR CONSTRUCTION AND ISSUANCE
PRICING FRAMEWORK

Article 10. Procedures for Establishing and Issuing the Generation Price Framework

1. By November 1st each year, the Vietnam Electricity Corporation shall be responsible for:

a) Proposing the selection of standard solar power plants and standard wind power plants to calculate the generation price framework.

b) Calculating or engaging consultants to select parameters and calculate the generation prices of standard solar power plants and standard wind power plants in accordance with the provisions of Chapter II of this Circular.

c) Preparing the calculation dossier for the generation price framework of ground-mounted solar power plants, floating solar power plants, onshore wind power plants, offshore wind power plants, and off-shore wind power plants for the following year in accordance with Article 11 of this Circular, and submitting it to the Electricity Regulatory Authority for review.

2. Within five working days from the date of receipt of the generation price framework calculation dossier as stipulated in Article 11 of this Circular, the Electricity Regulatory Authority shall be responsible for examining the detailed contents of the dossier, the completeness and validity of the dossier submitted for approval. If necessary, the Electricity Regulatory Authority may issue a document requesting the Vietnam Electricity Corporation to amend, supplement, or provide explanations clarifying the contents in the dossier. The Vietnam Electricity Corporation must submit a report explaining the contents in the dossier according to the request within the latest fifteen working days from the date of receipt of the amendment, supplementation, or clarification request from the Electricity Regulatory Authority.

3. Upon receiving a valid dossier and a report clarifying the contents in the dossier from the Vietnam Electricity Corporation, within twenty working days from the date of receipt of the dossier, the Electricity Regulatory Authority shall be responsible for organizing the review of the generation price framework proposed by the Vietnam Electricity Corporation.

If necessary, the Electricity Regulatory Authority may organize opinions on the generation price framework through the Advisory Board established by the Ministry of Industry and Trade or affected entities. The Advisory Board shall have a maximum of nine members, including one chairman, one vice-chairman, one secretary, and representatives of relevant units of the Ministry of Industry and Trade with appropriate expertise and deep understanding in the field of power generation.

4. Within the latest fifteen working days from the date of organizing the review of the generation price framework, the Electricity Regulatory Authority shall be responsible for submitting to the Minister of Industry and Trade for approval the generation price framework for ground-mounted solar power plants, floating solar power plants, onshore wind power plants, offshore wind power plants, and off-shore wind power plants for the following year, and publishing it on the Electricity Regulatory Authority's website. In case the generation price framework for the following year has not been published, the most recently effective generation price framework may be temporarily applied.

Article 11. Dossier for Approval of the Generation Price Framework

The dossier for approval of the generation price framework for ground-mounted solar power plants, floating solar power plants, onshore wind power plants, offshore wind power plants, and off-shore wind power plants includes:

1. A proposal from the Vietnam Electricity Corporation regarding the selection of parameters and the calculation of the generation price framework.

2. Tables of parameters and calculation documents for the generation prices of standard solar power plants and standard wind power plants in accordance with the provisions of Chapter II and the annexes issued together with this Circular.

3. Related documents concerning the parameters for calculating the electricity generation price.

Chapter IV

IMPLEMENTING PROVISIONS

Article 12. Implementation Organization

1. The Electricity Regulatory Authority shall be responsible for reviewing the annual power generation price framework and submitting it to the Minister of Industry and Trade for approval.

2. In cases where necessary, the Electricity Regulatory Authority shall reconstruct the table of parameters used to calculate the power generation price for standard solar power plants and standard wind power plants as specified in the Appendix of this Circular, and report to the Ministry of Industry and Trade for consideration and decision.

3. The Vietnam Electricity Group shall have the responsibility:

a) Selecting or hiring consultants to select standard solar power plants and standard wind power plants.

b) Calculating or hiring consultants to calculate the power generation price framework applicable to ground-mounted solar power plants, floating solar power plants, onshore wind power plants, offshore wind power plants, and offshore wind power plants.

c) Submitting to the Electricity Regulatory Authority the calculation dossier for the power generation price framework of ground-mounted solar power plants, floating solar power plants, onshore wind power plants, offshore wind power plants, and offshore wind power plants in accordance with Articles 10 and 11 of this Circular.

Article 13. Effective Date

1. This Circular shall take effect from December 19, 2023.
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./.