Circular No. 44/2015/TT-BCT stipulates on the development of biomass power projects, Avoidable Cost Tariff Table, and Model Power Purchase Agreement applicable to biomass power projects.

CIRCULAR

Regulations on the development of projects, Avoidable Cost Schedule, and Model Power Purchase Agreement applicable to biomass power projects Based on the Electricity Lawi

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28/2004/QH11 dated December 3, 2004; the Law Amending and Supplementing Certain Provisions of the Electricity Lawlức sNo. Based on Decree No. 95/2012/NĐ-CP dated November 12, 2012 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade;No. Based on Decision No. 24/2014/QĐ-TTg dated March 24, 2014 of the Prime Minister on mechanisms to support the development of biomass power projects in Vietnam; lon the 20th day of November, 2012;

The Minister of Industry and Trade issues this Circular regulating the development of biomass power projects, the Avoidable Cost Schedule applicable to biomass power projects, and the Model Power Purchase Agreement for biomass power projects (hereinafter referred to as the Model Power Purchase Agreement).gThis Circular regulates the development of biomass power projects, the Avoidable Cost Schedule applicable to biomass power projects, and the Model Power Purchase Agreement for biomass power projects. 11 1. Project investors of biomass power projects.

2. Units managing and operating biomass power facilities.No.3. Power purchasing parties.

At the proposal of the Director General of the Energy Administration,

4. Organizations developing biomass power projects for electricity business operations.June 2024;5. Other organizations and individuals related to the matter.FUNCTIONS, DUTIES, POWERS, ORGANIZATIONAL STRUCTURE, OPERATIONAL REGULATIONS, AND RELATIONSHIPS OF MANAGEMENT BOARDS; DUTIES, POWERS OF THE CHAIRPERSON, VICE CHAIRPERSON (IF ANY), SECRETARY, AND MEMBERS OF MANAGEMENT BOARDSDEVELOPMENT OF BIOMASS POWER PROJECTS

PART I

GENERAL PROVISIONS

Article 3. Supplementing and adjusting biomass power projects into the planning for the development and utilization of biomass energy

Article 2. Applicability

This Circular applies to:

1. Investors of biomass power projects shall prepare project proposal documents in accordance with laws on investment and construction and submit them to the People's Committee of the province or centrally governed city (hereinafter referred to as the Provincial People's Committee) where the project is located. On the basis of the project proposals, the Provincial People's Committee shall prepare a supplementary planning proposal document (hereinafter referred to as the Supplementary Planning Proposal) in accordance with Clause 4 of this Circular and submit it to the Ministry of Industry and Trade.

2. In cases where the submitted documents are incomplete or invalid, within five working days from the date of receipt of the documents, the Ministry of Industry and Trade (General Department of Energy) shall issue a request for supplementation of the documents.

3. The General Department of Energy shall be responsible for organizing the review of the Supplementary Planning Proposal within thirty working days from the date of receipt of valid documents. If necessary, the General Department of Energy may engage consultants to assist in the review and provide counter opinions. Based on the review results, the General Department of Energy shall report to the Minister of Industry and Trade for consideration and approval or submit to the Prime Minister for approval.

The documents for supplementing projects into the planning for the development and utilization of biomass energy include:

Chapter II

1. A submission from the Chairman of the Provincial People's Committee proposing to supplement the project into the planning for the development and utilization of biomass energy.

3. Information about the proposed biomass power project

a) Type of biomass and supply capacity;

b) The necessity of investing in the project, favorable and unfavorable conditions, resource exploitation and utilization regime (if applicable);

d) Preliminary implementation solutions, including: technical and technological schemes and capacity; infrastructure connection plans; equipment installation plans; implementation schedule and project management form; general resettlement and infrastructure construction support plans (if applicable); cost plan;

đ) Environmental impact assessment, fire prevention and firefighting measures, and security and defense requirements;

e) Total project investment; capital arrangement capability, sources of capital, and capital provision capability according to the schedule; economic and financial effectiveness analysis and social benefits of the project.

4. Opinions of the Regional Electricity Corporation or transmission units (if connected to the transmission system) regarding the Supplementary Planning Proposal.

a) Type of biomass and supply capacity;

b) The necessity to invest in and construct the project, favorable and unfavorable conditions, exploitation and utilization regime for national resources (if applicable);

c) Project description: location, scale and area of construction works, components of the project; contents related to industry planning and local construction planning;

d) Preliminary implementation solutions, including: technical, technological and capacity schemes; infrastructure connection schemes; equipment installation schemes; implementation schedule and project management form; general resettlement compensation and infrastructure construction support schemes (if applicable); plan and cost schemes;

e) Environmental impact assessment, fire prevention and firefighting solutions, and security and defense requirements;

f) Total investment amount of the project; capital arrangement capability, sources of funds and funding capacity according to progress; economic and financial effectiveness analysis and social benefits evaluation of the project.

4. Opinion of the Regional Electricity Corporation or transmission unit (if connecting to the transmission power system) on the supplementary planning proposal dossier.

Article 5. Biomass power generation projects connected to the grid

3. The content of the biomass power generation project, in accordance with the laws on investment construction management, shall include the following main contents:

a) Assessment of the impact of the interconnection plan of the biomass power generation project on the regional power system;

b) Plan and cost, technical measures for dismantling and handling equipment of the biomass power plant after the completion of the project.

Article 6. Environmental protection requirements

Investment activities in developing biomass power generation projects must comply with the Law on Environmental Protection and other relevant legal documents.

1. Principles for considering support for biomass power generation projects not connected to the grid

a) Ensuring economic, social, and environmental efficiency;

b) Completion of the project and its operation;

c) Main input data for calculating electricity prices and support unit prices for biomass power generation projects shall be considered based on the following principles:

- In cases where the installed capacity of the project exceeds the actual required capacity of the regional power grid, the actual electricity production of the previous year and the forecasted electricity production in subsequent years shall be used as the basis for determining the support unit price. For other projects, the actual electricity production or the forecasted electricity production in the approved investment project shall be taken, using the larger number;

- The total investment amount of the project shall be taken from the total investment amount in the approved investment project;

- Depreciation costs according to current legal provisions.

2. Procedures for registering electricity price support for biomass power generation projects not connected to the grid

a) The investor of the biomass power generation project not connected to the grid shall prepare a proposal for electricity price support for the biomass power generation project not connected to the grid and submit it directly or through postal service to the General Department of Energy. The number of proposals required: ten (10) sets of documents and one (1) CD/DVD/USB containing the soft copy of the proposal for electricity price support and accompanying documents;

b) Within thirty (30) days from the date of receiving complete and valid documents, the General Department of Energy shall be responsible for organizing the review of the proposal for electricity price support and reporting to the Minister of Industry and Trade for consideration and approval by the Prime Minister. If necessary, the General Department of Energy may hire consultants for review and counter-arguments to serve the review process.

In case the documents are incomplete or invalid, within five (5) working days from the date of receipt of the proposal for electricity price support for biomass power generation projects not connected to the grid, the General Department of Energy must notify the investor in writing to request additional documents or resubmit the documents.

3. Documents for requesting electricity price support for biomass power generation projects not connected to the grid include:

a) A letter requesting electricity price support for biomass power generation projects not connected to the grid;

b) The investment project including explanations about the investor, the pricing plan, and the main contents regarding the necessity and effectiveness of the support plan;

c) Operation plans and business plans;

d) Plans and cost, technical measures for dismantling and handling equipment of the biomass power plant after the completion of the project;

đ) Opinions of the People's Committee of the province on the content of the proposal for electricity price support.

TABLE OF AVOIDED COST PRICES AND SAMPLE POWER PURCHASE CONTRACTS FOR BIOMASS POWER GENERATION PROJECTS CONNECTED TO THE GRID

1. Before October 31 each year, the System Operator and Electricity Market Unit shall be responsible for leading and coordinating with the Buyer, Seller, and other power plants to update the database and calculate the national electricity system's avoided cost (Avoided Cost) as stipulated in Decision No. 24/2014/QĐ-TTg dated March 24, 2014 of the Prime Minister on mechanisms to support the development of biomass power projects in Vietnam for the next year according to the method prescribed in Appendix II attached hereto, and submit it to the Electricity Regulatory Authority for review.

2. Before November 30 each year, the Electricity Regulatory Authority shall be responsible for leading and coordinating with the Energy General Department to verify the input parameters and annual avoided cost calculation results prepared by the System Operator and Electricity Market Unit for submission to the Minister of Industry and Trade for consideration and approval. If necessary, the Electricity Regulatory Authority may consult relevant organizations and individuals during the verification process.

3. Before December 20 each year, the Energy General Department shall be responsible for:

a) Studying and proposing to the Minister of Industry and Trade for consideration and issuance of the Avoided Cost Tariff (determining coefficients k1, k2 in Appendix I) applicable to biomass power projects at a reasonable level to encourage electricity production from biomass energy while ensuring compatibility with the country's economic and social conditions at each stage;

b) Within two days from the date the tariff for electricity projects is issued, the Energy General Department shall be responsible for announcing it for the following year on its official website and that of the Ministry of Industry and Trade.

5. In case the Avoided Cost Tariff for biomass power projects has not been announced, the previous year's tariff will temporarily apply until the new tariff is announced. The difference in payment between the old and new tariffs will be settled between the parties in the first payment when the new tariff is applied.

The Avoided Cost Tariff applies to grid-connected biomass power projects except for the following cases:

1. Combined heat and power projects.

2. Power generation projects using sugarcane bagasse with steam extraction for sugar factories.

Article 10. Application of Model Power Purchase Agreements for Grid-connected Biomass Power Projects

2. The contents of the Model Power Purchase Agreement for grid-connected biomass power projects are specified in Appendix III attached hereto.

3. The Seller and Buyer may supplement the contents of the Model Power Purchase Agreement to clarify the responsibilities and rights of the parties but must not alter the fundamental content of the Model Power Purchase Agreement.

Chapter IV

IMPLEMENTING PROVISIONS

1. Responsibilities of the Energy General Department:

a) Promoting, guiding, and inspecting the implementation of this Circular;

b) Supporting the Buyer and Seller in resolving issues related to the Model Power Purchase Agreement upon request of one or both parties.

2. The Electricity Regulatory Authority shall be responsible for directing and guiding the System Operator and Electricity Market Unit to calculate the Avoided Cost according to the provisions in Appendix II attached hereto.

3. The People's Committee of the province shall monitor and inspect the operation of biomass power project development in accordance with the approved biomass energy development and utilization plan, in compliance with the provisions of this Circular.

Article 12. Responsibilities of relevant organizations and individuals

1. The Vietnam Electricity Corporation shall be responsible for fully calculating the costs of purchasing electricity from biomass power generation projects and incorporating them into the input parameters in the annual electricity sales price plan of the Vietnam Electricity Corporation, to be submitted for approval by the competent authority.

2. The electricity seller (power generation units) shall be responsible for:

b) Installing meters in accordance with current regulations to measure the electricity consumption for payment purposes;

d) Submitting one copy of the signed purchase and sale contract to the Energy General Department within thirty days from the date of signing;

đ) Adhering to the system operation regulations, transmission system regulations, and distribution system regulations issued by the Ministry of Industry and Trade;

3. The buyer shall be responsible for:

b) Adhering to the system operation regulations, transmission system regulations, and distribution system regulations issued by the Ministry of Industry and Trade;

For purchase and sale contracts signed before the effective date of this Circular, both parties shall be responsible for agreeing and signing an amendment appendix in accordance with the provisions of this Circular.

Article 14. Effective Date

1. This Circular shall take effect from January 25, 2016.

2. During implementation, in case of any difficulties arising, organizations and individuals shall report to the Ministry of Industry and Trade for review and appropriate supplementation or modification./.