Illustrative image (Photo: baodautu.vn) Hanoi (VNS/VNA) - TheMinistry of Industry and Trade (MoIT) has said that transferring allor part of a solar power project was normal according to market rules andthe Investment Law.
The MoIT was respondingafter concerns were raised that many solar power projects initiallyassigned to Vietnamese investors were being transferred to foreigninvestors.
Hoang Tien Dung, Director ofthe MoIT’s Electricity and Renewable Energy Authority, said: “The existingregulations allow the transfer of projects to eligible foreign investors.Transferring projects and changing shareholders need the approval of theMinistry of Planning and Investment or the Department of Planning andInvestment depending on project scale."
As of May 11, according to theDepartment of Electricity and Renewable Energy, Vietnam had 92 solar powerprojects and 10 wind power projects with a total capacity of nearly 6,000 MWin commercial operation.
A number of them have beentransferred partially or wholly to foreign investors by establishing jointventures or share sales, including investors from Thailand, the Philippines,China, Singapore and Saudi Arabia.
Coal and gas power projectsare invested under the business-operation-transfer (BOT) model witha Government guarantee during the projects' construction. However, atpresent, solar and wind power projects do not have Government guarantees.
"In the current context,domestic and foreign private investors developing power projects withouta Government guarantee is a positive point attracting investment to theelectricity industry," the MoIT representative said.
In addition, foreign investorsoften had more experience and ability in investing and managingplants. Foreign investors' participation in power projects would increaseinvestment efficiency and bring more benefits to investors and society.
Decision 11/2017/QD-TTg andDecision 13/2020/QD-TTg on incentives for solar power developmentwere aimed at those goals. Foreign investors are allowed to put investmentinto solar power projects according to regulations specified in thesedecisions as well as the laws on investment in general and foreign investmentin Vietnam in particular.
Feed-in tariffs (FIT) for solarpower in Vietnam were considered too high, so Dung said that domestic andforeign investors should only focus on projects that had investmentefficiency and benefits.
“The FIT for solar powerprojects are attractive but not high enough,” said Dung, adding that theFIT in the past 10 years had fallen quickly due to thedevelopment of science and technology from 9.35 US cents per kWh in 2017 to7.09 cents in 2019 for solar power projects on land.
According to the MoIT, the costof developing renewable energy used to be higher than for traditionalpower. Vietnam had applied the FIT mechanism to promote the development ofrenewable energy. This mechanism was an effective tool to promote the rapiddevelopment of renewable energy around the world, especially for newmarkets like Vietnam.
The development of renewableenergy had ensured enough power to supply the economy, reducingcostly oil-fired power and greenhouse gas emissions.
However, the FIT mechanism alsohad some limitations. The mechanism had attracted investmentin solar power projects focusing on areas with potential. Thathad led to grid overload in those areas and increased competitionfor land.
When Vietnam's renewable energymarket developed and there were more changes to renewable energytechnologies, Vietnam needed to change the FIT mechanism to solvethese limitations, Dung said./.
The MoIT was respondingafter concerns were raised that many solar power projects initiallyassigned to Vietnamese investors were being transferred to foreigninvestors.
Hoang Tien Dung, Director ofthe MoIT’s Electricity and Renewable Energy Authority, said: “The existingregulations allow the transfer of projects to eligible foreign investors.Transferring projects and changing shareholders need the approval of theMinistry of Planning and Investment or the Department of Planning andInvestment depending on project scale."
As of May 11, according to theDepartment of Electricity and Renewable Energy, Vietnam had 92 solar powerprojects and 10 wind power projects with a total capacity of nearly 6,000 MWin commercial operation.
A number of them have beentransferred partially or wholly to foreign investors by establishing jointventures or share sales, including investors from Thailand, the Philippines,China, Singapore and Saudi Arabia.
Coal and gas power projectsare invested under the business-operation-transfer (BOT) model witha Government guarantee during the projects' construction. However, atpresent, solar and wind power projects do not have Government guarantees.
"In the current context,domestic and foreign private investors developing power projects withouta Government guarantee is a positive point attracting investment to theelectricity industry," the MoIT representative said.
In addition, foreign investorsoften had more experience and ability in investing and managingplants. Foreign investors' participation in power projects would increaseinvestment efficiency and bring more benefits to investors and society.
Decision 11/2017/QD-TTg andDecision 13/2020/QD-TTg on incentives for solar power developmentwere aimed at those goals. Foreign investors are allowed to put investmentinto solar power projects according to regulations specified in thesedecisions as well as the laws on investment in general and foreign investmentin Vietnam in particular.
Feed-in tariffs (FIT) for solarpower in Vietnam were considered too high, so Dung said that domestic andforeign investors should only focus on projects that had investmentefficiency and benefits.
“The FIT for solar powerprojects are attractive but not high enough,” said Dung, adding that theFIT in the past 10 years had fallen quickly due to thedevelopment of science and technology from 9.35 US cents per kWh in 2017 to7.09 cents in 2019 for solar power projects on land.
According to the MoIT, the costof developing renewable energy used to be higher than for traditionalpower. Vietnam had applied the FIT mechanism to promote the development ofrenewable energy. This mechanism was an effective tool to promote the rapiddevelopment of renewable energy around the world, especially for newmarkets like Vietnam.
The development of renewableenergy had ensured enough power to supply the economy, reducingcostly oil-fired power and greenhouse gas emissions.
However, the FIT mechanism alsohad some limitations. The mechanism had attracted investmentin solar power projects focusing on areas with potential. Thathad led to grid overload in those areas and increased competitionfor land.
When Vietnam's renewable energymarket developed and there were more changes to renewable energytechnologies, Vietnam needed to change the FIT mechanism to solvethese limitations, Dung said./.
VNA
