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From the results of the international conference “Policies for developing the wind, solar and gas power projects in Vietnam” organized by the Department of Electricity and Renewable Energy – Ministry of Industry and Trade, Scientific Council of Vietnam Energy Magazine at the end of August 2022 in Ho Chi Minh City, the Conference Organizing Committee has reported to the Prime Minister and the Central Economic Commission on mechanisms and policies for developing these power projects in coming time.
The proposals for the policies on developing the wind, solar and gas power projects in Vietnam are:
I. The presentations focused on the following main contents:
(i) The domestic gas and imported LNG power projects should be the indispensable transition stage in the process to net zero carbon emissions. The advantages of the gas power projects are reducing CO2 emissions and pollutants, and the ability to quickly change the load capacity to respond to regulation and system operation when the rate of renewable energy is high.
(ii) Despite there were the strong development steps, the wind, solar and gas power projects faced great difficulties and challenges as the management of the planning was not effective and not synchronized, the site clearance and compensation were always the large challenges for the projects. The strong development of wind and solar power projects led to unbalance between supply and demand. The financial risks depend on the price mechanism and operational management capacity.
(iii) In three years (2019 – 2021) the installed capacity of the power system increased strongly (18%/year), mainly by the wind and solar power projects. The high rate of renewable energy (RE) created challenges for the stability of the power grid with the low system inertia, transmission line congestion, renewable energy redundancy, large false prediction error, risk of Fault Ride Through (FRT) and reduction short circuit currence ratio (SCR) causes instability.
(iv) Regarding rooftop solar power projects, at present, there are no national technical standards for rooftop solar power system equipment and no regulations on supervision and control of the rooftop solar systems, so the dispatching level cannot command operation. There is no unity on guidelines for fire prevention and fighting, land use, construction safety, environmental impact, and business registration. The impacts of the rooftop solar system on the electricity quality (voltage, harmonics, voltage flickers) should be studied and overcome. The mechanisms on the solar and wind power projects expired, but there is no replacement and transitional new pricing mechanism.
II. Outstanding issues interested at the conference:
The presentations and discussions at the conference highlighted a number of challenges related to mechanisms and policies for developing wind, solar and gas power projects in Vietnam, including :
1. Challenges in the wind and solar power development:
The FIT rates for the solar power projects (Decision 13/2020/QD-TTg) and wind power projects (Decision 39/2018/QD-TTg) are expired. It is necessary to make the new electricity price framework for renewable energy as soon as possible.
The technical obstacles in operating the power system with high RE projects lead to unstable factors that require to increase of flexible standby projects such as gas power plants and power storage elements.
III. A number of proposals and recommendations for developing the solar, wind and gas power projects:
Based on the discussions and proposals at the conference, the Scientific Council of the Vietnam Energy Magazine proposes a number of the following commendations:
For wind and solar power projects:
a. It is necessary to have an electricity buying framework for the solar and wind power projects to replace the FIT as soon as possible, many enterprises completed RE projects without selling electricity in the case that the power system faces a risk of power shortage in the near future but the new enterprises do not dare to invest. The price policy must be long-term and adjusted to the market so that the investors can calculate the risks in advance.
In the immediate future, it is proposed to urgently issue a pilot mechanism for the Direct Power Purchase Agreement (DPPA) and a mechanism to select project developers on the basis of promulgating the framework for buying the electricity for the solar and wind power projects as the basis for EVN and investors to negotiate PPAs.
b. Continuing to allow developing the rooftop solar power projects with the self-use purpose, not generating electricity (not selling electricity) to the national grid. However, the Government and the Ministry of Industry and Trade need to issue technical regulations for the self-use rooftop solar power projects so that these projects do not affect the power grid.
c. offshore wind power projects require a very long time for development time. Therefore, in order to get 7 GW of offshore wind power projects by 2030 as shown in the draft Power Development Planning VIII, it is necessary to make a national marine spatial planning, with clear legal regulations on surveying and handing over the sea surface to the investors and centralized planning on the transmission grid for offshore wind power.
Regarding other contents related to wind, solar and gas power projects:
a. The site clearance is always difficult for the gas, wind and solar power projects. It is necessary to improve the policies, on land including a clear, transparent and acceptable process for both investors and land users and which may distinguish the compensation for permanent land after drowning, compensation with support for land use restrictions and temporary compensation during construction.
b. It is necessary to balance developing the different power source projects. Currently, the high rate of RE creates challenges for the stability of the power grid. The regulations on auxiliary grid services are needed to encourage investment in services such as pumped storage hydropower projects, storage batteries, upgrading the power grid and encouraging the transport sector to use electric vehicles and battery charging stations for increasing the RE rate and efficiency of RE projects.
c. It is necessary to develop a mechanism, or put in place binding conditions for project developers on the requirements to encourage the localization of products and services, and to encourage cooperation between the domestic suppliers and the foreign project developers.