Reading Time: 3 minutes
According to Chairman of the Energy Association Tran Viet Ngai, the authorities should soon have a bidding mechanism to choose the best investor, to avoid massive development like the past.
At the workshop on mechanisms and solutions for sustainable energy development in Vietnam, Chairman of the Vietnam Energy Association (VEA) Tran Viet Ngai assessed that three factors affect the decision of an energy project, quality, capital, mechanisms, policies and direction from the central to local levels, investors, and contractors.
With renewable energy (solar power, wind power), the FIT price policy with the purchase price of 8.38-9.35 cents per kWh, according to Mr Ngai, is attractive and has attracted a large number of investors in this field. this area. By the end of 2021, the capacity of solar and wind power will be nearly 21,000 MW, accounting for about 27% of the total installed capacity of the entire power system.
“Investors see massively high prices to build wind power, solar power and rooftop solar power projects, adding capacity to Vietnam’s power system by about 27%,” the VEA Chairman commented.
Emphasizing that renewable energy is still the key to energy transformation, and achieving the goal of net zero emissions by 2050, Mr Ngai said, it is necessary to develop this type of energy. One of the solutions the VEA President mentioned is that the authorities should soon issue a bidding mechanism to select investors and “avoid the massive development of renewable energy like in the past”.
The fact that FIT will not continue the preferential price after the Government’s incentive mechanisms and policies expire and will switch to bidding is also highly appreciated by the leaders of the Electricity & Renewable Energy Department (Ministry of Industry and Trade). previously mentioned.
“The State’s support mechanism on prices for renewable energy is only applicable for a certain period of time. The extension of the FIT preferential price for renewable energy projects is no longer appropriate,” he said. Bui Quoc Hung, Deputy Director of the Electricity and Renewable Energy Department, said at the press conference of the Ministry of Industry and Trade on the afternoon of June 16.
Currently, the draft Circular on price brackets and bidding mechanisms for renewable energy projects is still being developed and consulted by the Ministry of Industry and Trade.
Bidding to select investors in the field of renewable energy has the advantage of being highly competitive, but according to experts, the difficulty is the way it is organized. Because if there is no specific process and regulation, it can cause consequences later.
Legally, the provisions are already in the Bidding Law and Investment Law, but the organization, development of processes and regulations for bidding in renewable energy have certain difficulties. Land planning and electricity planning need to be synchronized and revised accordingly.
Mr Le Duy Binh, Director of Economica Vietnam, also commented that localities need to participate and accompany in the bidding process to select investors. The Ministry of Industry and Trade can issue a request and plan for the procurement of electricity so that the provinces can prepare and annually announce the results. The next step is the work of investors, provinces and cities will prepare bidding documents.
In addition, investors are also interested in sustainability, and policy stability, not continuous mechanism changes. Therefore, the stability of the policy will ensure sustainability, calculating the investment rate and then pricing is no longer the most important factor.
Another issue that is of concern to experts is the mobilization of a large amount of capital for investment to ensure energy security coming here.
In the draft Power Plan, VIII being submitted to the Government, according to the high management plan towards energy conversion, the total investment capital from 2021-2030 is about 165.7 billion USD, of which the power source is 131.2 billion USD, and the electricity grid is about 34.5 billion USD. This number is one and a half times that of the revised Power Plan VII.