A wind farm in the central province of Ninh Thuan (Photo: VNA)Earlier, a number of renewable energy projects demanded the ministry to extendthe October deadline, a prerequisite to qualify for feed-in tariff (FIT), whichpays small renewable energy suppliers at an above-market price, citing numerouschallenges during the pandemic and prolonged social distancing periods lastyear.
However, MoIT has repeatedly rejected such demands. The ministry's proposalsuggests instead said projects' investors may negotiate prices directly withVietnam Electricity (EVN), the country's sole energy distributor.
The ministry said renewable energy has become more affordable and supplycompetitive in recent years. Therefore, it has voiced objections against Vietnam'scurrent preferential policies reserved for renewable energy developmentincluding FIT, saying it's time for the country to adopt a more market-orientedapproach.
MoIT said previously signed 20-year contracts were no longer a suitable timeframe as the cost to produce renewable energy has been steadily declining.Also, pegging renewable energy prices to the US dollar was also no longerappropriate under Vietnam's legal framework on foreign exchange.
According to a recent report by the ministry, renewable energy, mostlyconsisting of wind and solar, accounted for 26 percent of the country's totaloutput. Contractual obligations to purchase said output has created an unfairplayground for other energy suppliers. In the long term, it may even have anegative impact on the country's energy security.
According to EVN, by October 31 there were 84 wind farms that reached thecommercial operation date with a total output of 3,980.27 MW.
Energy auctions are also known as “demand auctions” or “procurement auctions”,whereby the Government issues a call for tenders to install a certain capacityof renewable energy-based electricity. Project developers who participate inthe auction submit a bid with a price per unit of electricity at which they areable to realise the project. The Government evaluates the offers on the basisof the price and other criteria and signs a power purchasing agreement with thesuccessful bidder.
Since 2019, Vietnam has emerged as the leader in solar and wind electricityadoption in the ASEAN area. The country overtook Thailand and had the largestinstalled solar and wind capacity in 2019./.
VNA
